Court Opinion

ID: 5422173
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:31:40.420754+00
Date Added: 2024-06-11T08:31:17.453687
License: Public Domain

Levy, J. (concurring).
While I concur in the result reached by my associates, my inability to accept either opinion in its entirety constrains me to make independent expression on the subject. To rest the decision upon the view that jurisdiction of the person is involved is to base it upon what seems to me a legal fiction designed to create a vehicle to preserve the rights of the plaintiff and to vindicate the interests of justice. Laudable though the object may be, it cannot be logically defended.
Section 225 of the General Corporation Law, in so far as it is germane, provides that “An action against a foreign corporation may be maintained by another foreign corporation, or by a nonresident, in one of the following cases only:
“ 4. Where a foreign corporation is doing business within this state.”
The limitations upon the right of action contained in the statute now embodied in section 225 have been said to go to the jurisdiction of the subject-matter. (Robinson v. Oceanic Steam Navigation Co., 112 N. Y. 315.) If, therefore, we yield to what is sometimes said to be the inflexible rule that lack of jurisdiction of the subject-matter, notwithstanding that it may arise only from special circumstances of the case, automatically bars the court from further consideration of the cause, we must at once dismiss the action; and this, regardless of the fact that defendant, by lulling the plaintiff into a false sense of security, in previously submitting to the jurisdiction, has barred it from prosecuting its action in any other forum, by reason of the Statute of Limitations. I believe that a formal syllogistic application of the principle that a court must, in the given case, dismiss for lack of jurisdiction of the subject-matter, leads to confusion and injustice.
*236It is true that such jurisdiction implies in the generality of the concept a want of authority to hear and determine, which even a consent of the parties will not cure (Chemung Canal Bank v. Judson, 8 N. Y. 254) and which may be raised for the first time on appeal.' (Fiester v. Shepard, 92 N. Y. 251; Matter of Walker, 136 id. 20.) And where, as a matter of fact, a court is unqualifiedly without jurisdiction to entertain the subject-matter, no waiver of the right by the parties to raise this question will confer such authority, the proceedings, notwithstanding, being absolutely coram non judice. (Matter of McIntyre, 124 App. Div. 66.) On the other hand, when a party pleads that the court is without jurisdiction of the subject-matter, such objection cannot always be disposed of on the mere plea and without an inquiry into the facts. Frequently, indeed, the absence of such jurisdiction appears on the face of the pleading, as where, for example, the aid of the Municipal Court is sought to be invoked in an action in equity. But often the want of jurisdiction can only be determined after the presentation of specific facts in affidavits or by oral proofs as provided in rule 107, subdivision 2, of the Rules of Civil Practice. (See, also, Louisville Trust Co. v. Comingor, infra.)
In Hunt v. Hunt (72 N. Y. 217, 230) jurisdiction of the subject-matter is defined as “ the power to act upon the general, and so to speak, the abstract question, and to determine and adjudge whether the particular facts presented call for the exercise of the abstract power.” Here, the right to the exercise of this power, So far as the nature of the subject-matter generally and the amount in controversy are concerned, is unquestioned. But since the parties are foreign corporations, a further prerequisite is to inquire whether they have brought themselves within the provisions of section 225 of the General Corporation Law of 1929, and more specifically whether the defendant is engaged in business here. (Hartstein v. Seidenbach’s, Inc., 129 Misc. 687.) Upon the ordinary service of process on a foreign corporation by a resident, the voluntary appearance of the latter may be said to be a waiver of the right to object to the service. That situation, obviously, involves only jurisdiction of the person. In the instant case the defendant appeared voluntarily, and unless its appearance was collusive and with the connivance of the non-resident plaintiff, it should be deemed under the facts in the situation an estoppel of the defendant to dispute the claim that it is doing business here. We should not permit a corporation, which apparently is engaged in business with an office and an agent in this jurisdiction, to deny such fact, more particularly after it has interposed a general appearance and proceeded with the litigation on the merits. The general appear*237anee, together with the presence of certain indicia which are connected with engaging in business here, should bar a corporation thereafter, in the discretion of the court, from questioning the fact that it is doing business here, especially if by its conduct it has destroyed the rights of its adversary.
The result of this reasoning is that section 225 of the General Corporation Law, while prescribing rules of jurisdiction of the subject-matter, may nevertheless, at least so far as subdivision 4 is concerned, not be invoked by defendant in this situation, to defeat the jurisdiction of the court. This may seem an anomalous conclusion, but it is entirely in accord with the expression in Sentenis v. Ladew (140 N. Y. 463, 466) where it is said: “ But a party may waive a rule of law or a statute, or even a constitutional provision enacted for his benefit or protection, where it is exclusively a matter of private right, and no considerations of public policy or morals are involved, and having once done so he cannot subsequently invoke its protection. * * * It might be differ-
ent if the court was one whose jurisdiction was expressly limited by statute, or there was some statutory inhibition of jurisdiction in a given case or class of cases. Then consent even might not confer jurisdiction.”
The prosecution of this action involves no consideration of public policy or morals; it does not impose burdens upon foreign commerce generally, and if it might be said, theoretically, to impose a private burden upon the particular defendant, the conduct of the latter in continuing with the litigation negatives any such practical conclusion.
Again, while there seems to be no general statutory inhibition of jurisdiction in this case, it is urged that to permit this action to continue would constitute an undue burden upon interstate or foreign commerce, in violation of the commerce clause of the Federal Constitution. It is true that the transaction in suit, involving as it did a contract for carriage between two foreign countries, does not come strictly within the definition of interstate or foreign commerce. But the reasoning which protects interstate carriers from the necessity of defending suits in jurisdictions remote from that in which the cause of action arose, is predicated upon the fact that it entails absence of employees from their customary occupations with the resultant impairment of efficiency in operation. (Davis v. Farmers Co-operative Co., 262 U. S. 312, 315.) In this view the same protection is accorded the interstate carrier, even though the transaction involves carriage between two foreign countries, which is not within the purview of the commerce clause. On the other hand, the protection of the interstate carrier from *238undue burdens must yield to the requirements of the orderly and effective administration of justice. The law will permit a burden to be imposed upon interstate commerce, if it is reasonably required for the protection of the public. (Kane v. New Jersey, 242 U. S. 160, as explained in Davis v. Farmers Co-operative Co., supra.)
The mere submission here of a controversy between non-residents involving foreign commerce and not founded upon a cause arising in this State, does not automatically disqualify our courts from acting. There is no inflexible rule which prohibits the court from entertaining actions involving interstate commerce. In fact, our State courts are daily passing upon such questions in controversies in which one or more of our citizens tenders the issue. But even where non-residents are litigating, our courts should not rigidly decline to entertain the litigation merely because a burden upon interstate commerce is involved. Only if an inquiry into the facts should reveal that an undue burden would be imposed upon such commerce by keeping the controversy here, should the court bar jurisdiction. If, therefore, a defendant’s objection is raised promptly, it may well be that the courts will be justified (as in N. V. Brood en Beschuitfabriek, etc., v. Aluminum Co., 231 App. Div. 693), without extended examination into the merits, save perhaps an examination of mere affidavits under Rules of Civil Practice, rule 107, in refusing to entertain jurisdiction. But where, as in the case at bar, the litigation has continued for years and the Statute of Limitations will doubtlessly bar the plaintiff from bringing a new action, it becomes just and pertinent to inquire thoroughly into the merits of the objection of undue burden upon interstate commerce. As is said in Louisville Trust Co. v. Cominger (184 U. S. 18, 26): “ In many cases jurisdiction may depend on the ascertainment of facts involving the merits, and in that sense the court exercises jurisdiction in disposing of the preliminary inquiry, although the result may be that it finds that it cannot go farther.”
Section 279 of the Civil Practice Act, providing that the objection as to the jurisdiction of the Subject-matter is not waived by failure to raise it in time, does not lay down any positive requirement upon the court to decline to entertain jurisdiction merely because defendant has labeled the action as one imposing an undue burden upon interstate commerce. The section merely permits the question of jurisdiction of the subject-matter to be raised at any time. When the question is raised, as here, the court may then inquire whether in the specific case an undue burden has been imposed, and whether the burden, theoretically present, but practically non-existent, must not yield to paramount rights of other parties.
*239The inquiry into the course of conduct of the defendant evinces the fact that no burden has thus far been imposed by this litigation upon its foreign commerce activities; and even if a further consideration of the case might constitute a slight burden, it is far more important, in the interest of substantial justice, to preserve the rights of the plaintiff from the utter destruction which would result from the dismissal of the action.
My conclusion, therefore, is that the case does not involve such an absolute bar to the jurisdiction of the subject-matter as would impel the court to take adverse notice upon its own motion. The defect might well compel the court to take notice if the objection is timely invoked by the party, and it would certainly permit the court, in its sound discretion, to take notice of the lack of jurisdiction, even when not timely invoked. In the exercise of such discretion the motion to dismiss was properly denied below, and the order should be affirmed.