Court Opinion

ID: 5300203
Source: CourtListenerOpinion
Date Created: 2022-01-08 03:05:31.093608+00
Date Added: 2024-06-11T08:29:03.945100
License: Public Domain

Finch, J.
(dissenting). The defendants appeal from orders denying their motions to vacate service of process upon the grounds that the defendants were foreign corporations not doing business in this State and that the persons upon whom service was made were not proper persons to receive such service. The matter was referred to a referee to hear the parties upon the issues of fact involved and the referee reported that the defendants were in fact doing business within the State and that the process was duly served upon persons who were managing agents of the corporations and hence the service was valid. These findings are supported by the facts appearing in the record. These facts show that the defendant corporations were actively engaged in the transaction of their business in this State through a corporation which will be referred to hereafter as the marketing corporation. The marketing corporation was appointed the general purchasing and sales agent of the defendants, sold for them their product, and purchased for them their supplies, paying for the latter out of the proceeds of the sales of the defendants' product. The expenses of the defendants for labor, etc., in connection with production operations were paid by drawing upon the marketing corporation in New York. The latter made monthly reports to the defendants of its receipts and expenditures. The defendants in turn rendered to the marketing corporation accounts as to the debits and credits to which they were entitled. From the accounts so rendered the marketing corporation would ascertain and charge against each of the defendants its proportionate share of the New York office expenses, salaries, etc., of the marketing corporation. After the receivership of the marketing corporation, the receivers continued *352conducting the business of the defendants in the same manner as above stated, and have at all times dictated the policy of such business, deciding questions relating to the drilling of new wells, the payment of taxes, the prosecution and settlement of claims of the defendants against the Mexican government, etc Under these facts and circumstances the defendant corporations clearly were doing business within the State.
So, also, under the facts above set forth, it cannot seriously be questioned that service upon the marketing corporation through its president and its receiver satisfies the statutory requirement of making service upon a managing agent of the defendants. (See Civ. Prac. Act, § 229.) There is no statutory definition of what shall constitute a managing agent. The authorities, however, are in accord that the requirement of the statute is fulfilled where service is made upon one whose position in relation to his agency for the defendant is such as fairly to create a presumption that notice to him will be notice to the principal. In addition to service upon the receiver of the marketing corporation and upon its president, service also was made upon one who concededly is the attorney in fact of the defendants, and who, as such, has executed in New York on behalf of the defendants contracts involving millions of barrels of oil, and who was expressly authorized on behalf of the defendants among other things to “ initiate and prosecute before the local and Federal tribunals the respective suits, civil or criminal, with that authority which, conforming to the law, is inherent to the quality of a general representative, and without the necessity of any special mention of express authority to take part in the suit, to institute actions. * *
It is true that the earlier and later authorities upon what constitutes doing business within a State (compare Ultramar Co., Ltd., v. Minerals Separation, Ltd., 236 N. Y. 647, with Grant v. Cananea Consol. Copper Co., 189 id. 241) cannot be reconciled and that the later authorities have been much more tender to the concerns which seek to obtain the advantages flow ng from doing business in the foreign State, than to those residents of the State who find it necessary to resort to the courts to protect their rights. No decisions, however, have gone to the length of holding that a concern which does a continuous business in the foreign State through agents is not within the foreign State. If this were not so, the economic and social aspects of driving all suitors to the courts of the home State, in the case at bar, Mexico, would soon cause a reconsideration. A corporation must always act through agents. Of course, where an agency does not exist, but the control is merely through a stock ownership in an otherwise independent *353corporation, a different situation arises. (Cannon Mfg. Co. v. Cudahy Packing Co., 267 U. S. 333.) In the case at bar, however, there are sufficient facts and reasonable inferences from these facts to establish an agency by the defendant corporations for doing business in this State.
It follows that the orders appealed from should be affirmed.
Merrell, J., concurs.
In each case: Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.