Lopinsky v. Hertz Drive-Ur-Self Systems, Inc. ( 1951 )

PER'CURIAM.

The appellant initiated the present action dm the District Uotint fer the Southern District of New York against the Hertz Drive-Ur-Self System, Inc. (hereinafter called “Hertz”), Edward J. O’Brien, and Charles A. Harrison administrator of the estate of Walter Benedict Baer. Briefly, the complaint alleges that the plaintiff’s intestate was killed on May 29, 1950, in an automobile collision on Route 22 in the State of New York;, that the automobile which caused the death of the deceased was operated by Walter Benedict Baer, was owned by the defendant Edward J. O’Brien, and was rented by Walter Benedict Baer from Edward J. O’Brien; that Edward J. O’Brien rented the automobile to Walter Benedict Baer as a licensee of and on behalf of Hertz, and that the licensee, Edward J. O’Brien, conducted his business in East Norwalk, Conn. Service upon the defendant Hertz was made through a United States Marshal by leaving a copy of the summons and complaint with George R. Gannon, assistant comptroller of the Carey Driveurself System, Inc. (hereinafter called “Carey”), a New York corporation. On the motion of Hertz, Judge Ryan, on the ground that the court lacked jurisdiction over Hertz, vacated the service of the summons and complaint and entered judgment in favor of Hertz. The questions arising on this appeal are whether Hertz is jurisdictionally present in the State of New York, and if so, whether service was properly made. Since we agree with the conclusion reached by the district judge that the court lacked jurisdiction over Hertz, it is unnecessary to decide the latter question.

The jurisdictional presence of a foreign corporation depends on whether the corporation is doing business within the state. People’s Tobacco Co. v. American-Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587. From the affidavits it appears-that Hertz maintains no offices of its own and does not directly conduct any business, in New York. However, the appellant contends that Carey was in fact acting as the agent of Hertz in the business transacted by Carey in New York. This contention is based on the following facts: Hertz devised a plan or system of renting automobiles to customers who drive the automobiles themselves, the system being known under the trade-name of Hertz Drive-Ur-Self System. In order to effectuate the system on a national scale, Hertz licenses hundreds of local individuals and corporations throughout the United States and Canada to use its system and the trade-name. Carey Driveurself, Inc., a New York corporation, is such a Hertz licensee, but independent and locally owned. The license agreement between Hertz and Carey provides, inter alia, for the payment of specified fees by the licensee for each car maintained by Carey in its Driveurself business. The licensee is required to use the Hertz standard form of rental agreement and to permit the licensor to inspect its premises, automobiles and records and accounts. Hertz’s obligations are limited to assisting the licensee in procuring the various materials used in the Driveurself business and to help in locating automobiles which may have been stolen from the licensee.

This license agreement cannot be described as a subterfuge to avoid local jurisdiction, see Bach v. Friden Calculating Machine Co., 6 Cir., 167 F.2d 679, and does not constitute an appointment by Hertz of Carey as its agent for the purpose of renting automobiles in New York. Echeverry v. Kellogg Switchboard & Supply Co., 2 Cir., 175 F.2d 900. The appellant makes much of the fact that the Manhattan Telephone Directory lists Carey’s address and telephone number under the name of Hertz Drive-Ur-Self System and that an advertisement in the Classified Directory features the name “Hertz” rather than that of Carey. However, it appears that the advertisement is paid for by Carey, and the featuring of the Hertz name is simply a means of directing potential customers to a place which rents automobiles since the Hertz name would in all likelihood be more familiar than that of Carey. In our opinion Carey was not an agent of Hertz to do business in New York but a mere licensee.

For the foregoing reasons, the judgment is affirmed.