Case Name: First National Bank of Albany, N. Y., Respondent, v. General Construction Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1917-12-28
Citations: 180 A.D. 743
Docket Number: 
Parties: First National Bank of Albany, N. Y., Respondent, v. General Construction Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 180
Pages: 743–749

Head Matter:
First National Bank of Albany, N. Y., Respondent, v. General Construction Company, Appellant.
Third Department,
December 28, 1917.
Corporations — foreign corporation — service of process on “ managing agent.”
One who has carried on all the business of a foreign corporation performing a construction contract in this State, who has signed its name to notes by himself as attorney, and in that manner financed the work, and to whom the corporation has assigned all moneys due or to become due under its contract, is a “ managing agent,” within the meaning of subdivision 3 of section 432 of the Code of Civil Procedure, upon whom process may be served, said corporation not having designated a person upon whom service can be made, and there being no pretense that any officer of the company is within the State.
Woodward and Cochrane, JJ., dissented, with opinion.
Appeal by the defendant, General Construction Company, from an order of the Supreme Court, made at the Albany Special Term and entered in the office of the clerk of the county of Albany on the 8th day of January, 1917, denying its motion to vacate and set aside the service of the summons and complaint herein.
John C. Wait, for the appellant.
Tracey, Cooper & Townsend [B. Jermain Savage of counsel], for the respondent.

Opinion:
Kellogg, P. J.:
There is something of mystery in this case. The defendant, and those acting with it, could clear the matter up, but prefer to withhold important facts, leaving the court in a way to decide the case from inferences to be drawn from the few facts shown. It is apparent that by the conduct of the defendant and those acting with it, the State is paying substantially two prices for the work done, and that the plaintiff, who furnished the money to finance it, may not receive anything.
The defendant moved to set aside the service of the summons alleged to have been made upon it by serving it upon one Aderente, and bases its motion upon the ground that he was not an officer of the company at the time. It also claims that Aderente at the time was privileged' from service because he was in the State as a witness. This point need not be considered, as it is plain that he was a resident of and doing business in New York city.
One Di Martino and his partner put in a bid to perform certain work for the State at $69,000, and was the lowest bidder. The General Construction Company bid $106,000 for the same work. Thereupon the Di Martino bid was withdrawn, the contract awarded to the construction company, and it assigned all moneys due or to become due thereon to Aderente and gave him a power of attorney by which he, on behalf of the company, was authorized to demand, receive, sue for, recover and receipt for said moneys. Aderente was a mural painter of New York city, without financial means, and the son-in-law of Di Martino. Di Martino actually carried on the work under the contract. Aderente, however, opened a bank account in the name of the construction company, signed its name to notes by himself as attorney, and in that manner financed the work, and this action is brought to recover upon the notes so given. In the notes the company assigns the final estimate on said contract to the bank as collateral.
It does not appear that the defendant ever had any other business in the State, and apparently no*one here has carried on any business for it except Aderente and the attorney who appeared for it in the Court of Claims and upon this motion. The basis for the motion is that Aderente was not an officer of the company and, therefore, service could not be made upon him, overlooking subdivision 3 of section 432 of the Code of Civil Procedure which permits service upon a foreign corporation by serving the cashier, a director or a managing agent of the corporation within the State if it has not designated a person upon whom service can be made and if none of its officers mentioned can be found with due diligence within the State and the corporation has property within the State or the cause of action arose therein. It has not designated a person upon whom service can be made; there is no pretense that any such officer was within the State. We are satisfied that the Special Term properly determined that Aderente was a managing agent of the corporation within this State.
It is difficult to understand the position of the defendant upon the facts. The papers used in the Court of Claims indicate that the parties interested in the contract were the plaintiff, the Acme Road Machinery Company and Aderente. However, at the close of' the proceeding, the defendant's attorney, who is also the attorney here, took the ground that the check issued upon an award must be made to the construction company, or to him as its attorney. There was considerable discussion between the attorney for the defendant and the attorney for the bank with reference to the fifing of the claim with the Court of Claims. He took the position at first that Di Martino and the Acme Road Machinery Company, the assignees, were the parties principally interested; later he took the position in his letter of November 17, 1916, that his contract with reference to the Court of Claims matter is with the construction company only; that Di Martino and Aderente had no money; that he would be glad to have the bank's attorney assist him in the court, but cannot charge the case with any additional expense without the consent of the company, Di Martino and Mr. Cook, the representative of the Acme Road Machinery Company. In another letter he states that if there is any balance after paying the bank and the road machiúery company " it is to go to the General Construction Co. or Mr. Di Martino," and in another letter he states: " I feel quite confident that Mr. Aderente is a poor man and acted in this matter solely as the agent of the General Construction Co. and without any interest whatever in the contract or the claim, but only as an attorney in fact and it is my understanding that the General Construction Co. is not looking for and does not expect to have or receive anything but the surplus after the bank and Mr. Cook have been paid in full."
It is apparent that Aderente had no interest in this contract for himself. It is a fair inference that Di Martino withdrew his bid under the agreement with the construction company by which the moneys under the contract were to be paid to his son-in-law, probably in some way to be apportioned between Di Martino and the construction company. There is no suggestion in the record that Aderente was guilty of wrong in making the notes in suit or in opening and carrying on a bank account in the name of the defendant. We must conclude that with knowledge of all the facts it recognized the validity of the assignment by him as its agent in the Court of Claims and the validity of the notes, the proceeds of which were used to finance this contract. Upon the facts the conclusion is irresistible that the defendant and Di Martino are interested in this contract and that Aderente was acting as the managing agent of the defendant in its business in this State with reference to this contract, apparently its only business in the State. I, therefore, favor an affirmance of the order.
All concurred, except Woodward, J., dissenting in an opinion, in which Cochrane, J., concurred, j