Rath v. Ohio German Fire Insurance , 117 N.Y.S. 382 ( 1909 )

Clarke, J.:

On the 27th of November, 1908, a warrant of attachment was issued against the property of the defendant Ohio German Fire Insurance Company. On the same day the sheriff attached property belonging to the defendant in the possession or control of Newman & MacBain by delivering to and leaving with William C. Newman, a member of the firm, a copy of the summons, complaint, warrant of attachment and the papers upon which said warrant ivas granted. Thereafter on December 19, 1908, plaintiff entered judgment against the defendant by default for $1,119.85. Attached to the judgment roll is a certificate of the sheriff of the county of New York that he served the defendant with the summons and complaint in this action on November 27, 1908, by delivering copies thereof to William 0. Newman, “ managing agent of the said defendant personally.”

The defendant, appearing specially, moved to vacate the judgment and warrant of attachment upon the ground that at the time of the service of the summons and complaint upon William C. Newman neither he nor the firm of Newman & MacBain were agents or had any authority to act or receive service of any papers for the defendant, and that said judgment was void for lack of jurisdiction and for the failure of the plaintiff to serve the defendant with the summons as required by the Code of Civil Procedure, and' should be vacated and set aside. The motion having been granted, plaintiff appeals.

The affidavit of William C. Newman states that the firm of Newman & MacBain were, prior to the 10th day of November, 1908, the metropolitan agents of the defendant Ohio German Fire Insurance Company. Section 432 of the Code of Civil Procedure provides that “ personal service of the summons upon a defendant, being a foreign corporation, must be made by delivering a copy thereof within the State as follows: 1. To the president, vice-president, treasurer, assistant treasurer, secretary or assistant secretary, or, if the corporation lacks either of those officers, to the officer performing corresponding functions under another name.” Subdivision 2 provides for a designation in writing of a person to receive service ; and for service upon such person ; and subdivision 3 provides : “ If such a designation is not in force, or if neither the person designated nor an officer specified in subdivision first of this section can be found with due diligence, and the corporation has property within the State, or the cause of action arose therein, to the cashier, a director, or a managing agent of the .corporation, within the State.”

It is conceded that up to November 10, 1908, service upon Newman would have been good, as, being the metropolitan agént for the defendant, he came within the'provision a managing agent of the corporation within the State.' But it is claimed that on said date he resigned and thereafter ceased'to be a managing agent, and was not .such on the twenty-seventh of November, and that,, therefore, service upon him was ineffectual to hind the corporation-; and he seeks to support that claim by a copy of the letter sent to the defendant upon that date, as follows: “ With surprise1 and regret we have recently received numerous letters from you requesting cancellations * * * or reductions on lines of certain business we have written for .your company. We most respectfully decline •to accede to your numerous requests and reinclose the said letters to you herewith. As this indicates that there is a lack of confidence in our relationship, we hereby give you. notice of the termination of the agreement or contract existing between your company and this agency, which provides in paragraph six that ‘it (the contract) may be terminated at any time by either party, hereto giving written notice to the other.’ In taking this action we wish to express our kindly feelings toward the management and our desire to be of any assistance possible to it; and when our successor to the Metropolitan District Agency is appointed we will do evertliing we can to facilitate the transfer of such records as may be of assistance to him: We will forward you daily reports on business in process in our office and final account and supplies as ■soon as practicable.”

We are of opinion that that.letter in and of itself was insufficient to destroy the relation of agency, and that, therefore, the said Newman still remained at the time of the summons herein a managing agent of the defendant, upon whom process could properly be served to charge the defendant under section 432 of the Code of Civil Procedure. The purpose of permitting service upon officers or agents of foreign corporations doing business within this State is .to secure the rights of citizens of the State doing business with said corporations upon the one hand, and upon tlxe other to secure the service of process upon such persons as will be likely to bring home to the corporation the fact of the service in order that it may protect itself by a proper appearance and defense.

It will be noted that in the letter relied upon Newman spoke of his desire to be of any assistance possible to the management, and “ when our successor to the Metropolitan District Agency is appointed we will do everything we can to facilitate the transfer of such records as may be of assistance to him. We will forward you daily reports on business in process in our office and final account and supplies as soon as practicable.” It does not appear, nor is it claimed, that any successor to the metropolitan district agency had •been appointed, nor that the records in possession of Newman had been transferred to him or to any one else. It does appear that there remained business in process in the office, of which he promised to forward daily reports and thereafter to finally account. It is not to be doubted that his relations to the company upon such matters remained of a fiduciary character.

We hold, under the circumstances disclosed, and notwithstanding his letter, not acted-upon by the defendant, that Newman remained its agent as still in possession of its property, effects and business, and that from his promise of daily reports there can be no doubt of the transmissal by him of information to the company of the service of process, one of the objects sought to be secured by the provisions of the Code. It follows, therefore, that the service was good and that the order appealed from should be reversed, with ten dollars costs and disbursements and the motion denied and the judgment and attachment reinstated, with ten dollars costs.

Ingraham, McLaughlin, Houghton and Scott, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, and judgment and attachment reinstated.