Court Opinion

ID: 6889835
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:38:27.079788+00
Date Added: 2024-06-11T08:51:02.125165
License: Public Domain

L. HAND, Circuit Judge
(dissenting).
We have here a state statute to construe (§ 229-b of the New York Civil Practice Act); a statute narrower in scope than the full power of the state. I say this because it is now settled that a state may subject a non-resident to the jurisdiction of its courts without personal service, if the action be based upon an act of the non-resident while personally within the state. Kane v. New Jersey, 242 U.S. 160, 37 S.Ct. 30, 61 L.Ed. 222; Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091; Henry L. Doherty & Co. v. Goodman, 294 U.S. 623, 55 S.Ct. 553, 79 L.Ed. 1097. It seems to me therefore that New York has' power to say, if it chooses, that, when an individual sends agents into the state, or employs persons already in the state, continuously to solicit orders, he subjects himself to service by notice alone in any action upon a contract which results from such an order, even though the contract was completed by acceptance of the order outside the state. That is quite different from saying that the maintenance of such solicitors will subject a corporation — or an individual — to service by notice in actions based upon other claims; as a corporation is so subject when it does enough business to be “present” in a state. The Court of Appeals of New York in Tauza v. Susquehanna Coal Company, 220 N.Y. 259, 115 N.E. 915, held that a corporation was “present” for service by notice in an action upon any claim, if it maintained a regular staff of solicitors in the state. I shall assume for the purposes of this appeal that that went further than the decisions of the Supreme Court warrant: i.e. that my brothers are right, if the question to be decided were merely whether the defendants were “present” within the state in the sense that the Constitution demands.
But the question now being only one of the interpretation of a New York statute, I think that an action upon a contract made by the acceptance, outside the state, of an offer made within the state “arises out of” the offer and it only remains to decide whether, again as a matter of interpretation of the statute, the continued making of such offers, is “engaging in business”. To decide that, I think it proper to look to the state decisions construing the same language, even though they were interpreting the Constitution and did so erroneously. All of this is a somewhat roundabout way of saying that we should here accept as the test of “engaging in business” what was said in Tauza v. Susquehanna Coal Co., supra. It is quite true that the defendant in that case had a more extensive establishment of solicitors in New York — more in number, more elaborate in organization; nevertheless, the defendants at bar had a continuous business in New York. Epstein was authorized to go out and bring in all the customers he could; and I am disposed to say that one agent, authorized by a standing agreement to procure all the business he can, is not substantially different from a staff of such agents. Indeed, Epstein’s powers were broader than those of the agents there, be*204cause, although he could not accept cash, he could accept cheques and drafts to the defendants’ order.
I have treated the decision in Tauza v. Susquehanna Coal Co., supra, as though it represented the present law of New York, although it has not remained altogether untouched. In reading the cases, care must be taken to distinguish between what will support service, from what will be a defense on the merits, when a non-resident plaintiff has not obtained a local license. The defendants do not so discriminate; for example, they cite International Text Book Co. v. Tone, 220 N.Y. 313, 115 N.E. 914, — decided the same day as Tauza v. Susquehanna Coal Co., supra, — as though it were in point. And even when the question was of service, the decisions are not easy to reconcile. Hall v. Weil-Kalter Manufacturing Co., 199 App.Div. 592, 191 N.Y.S. 884, was close to the case at bar on the facts, and so was Lillibridge v. Johnson Bronze Co., 220 App.Div. 573, 222 N.Y.S. 130; yet the service was held good in the first, and bad in the second by a vote of three to two; and the Court of Appeals affirmed the second in 247 N.Y. 548, 161 N. E. 177. In the Appellate Division Finch, J., said in Lillibridge v.- Johnson Bronze Co., supra, that, upon the point before them, the state courts must follow the federal decisions; and I quite agree, but when, as here, the question is of the meaning of a state statute, that is of course not so.