Childs v. Harris Manufacturing Co. — 5 N.Y. St. Rep. 734

Majority

p. 734

Orlando J. Childs, et al., Resp’ts, v. The Harris Manufacturing Co., Appl’t.^[1]

(Court of Appeals,

Filed March 1, 1887.)

Headnote

1. Pbactice — Summons — Service ot upon a foreign CORPORATION.— Code Civ. Pro., § 432, subd. 3.

The defendant, a foreign corporation, sold to these plaintiffs harrows manufactured by them and upon a sufficient consideration by a writing executed in the state of its incorporation, guaranteed the plaintiffs the right to purchase, sell and deal in its harrows and to indemnify them from all prosecution for so doing, by any person claiming it to be an infringement upon any patent, provided notice should be given of such proceeding and it be allowed to take charge of the case. An action was commenced for this alleged cause against these plaintiffs and they at once notified the defendant. The guarantor failed to take charge of the defense and judgment was entered against these plaintiffs and payment thereof enforced by execution. They thereupon issued a summons as in the supreme court of this state and served it within the state upon a director of the company.

Held, that this was sufficient service upon the corporation if the cause of action arose in this state and the party served was in fact one of the defendant’s directors. Code Civ. Pro., § 432, subd. 3.

3. Contract to indemnity — Action tor breach op — Where cause op ACTION ARISES.

Held, that it was immaterial that the contact to indemnify was made without the state, its obligation was to be discharged wherever the plaintiffs were vexed by litigation. And the cause of action arose when for want of a defense judgment went against them and at the place where that judgment was recovered.

Appeal from an order of the supreme court, general term, fourth department, affirming an order made at the special term of Onondaga county, denying a motion to set aside the service of a summons in an action against a foreign corporation.

The opinion states the case.

Louis Marshall, for appl’t; H. J. Cookingham, for resp’t.

The facts presented by this appeal are as follows : The defendant, a corporation created under the laws of Wisconsin, has its office in that State, where it is engaged in the manufacture and sale of harrows, some of which were bought by plaintiffs, who are dealers in agricultural implements.

Some question arose as to whether the machine was an infringement upon letters patent issued to other parties, and upon a consideration deemed sufficient, the defendant, in a writing executed in Wisconsin, guaranteed to the plaintiffs the right to purchase, sell and deal in its harrows, and to indemnify them from all prosecutions for so doing, by any person claiming it to be an infringement upon any patent, provided .notice be given of such proceeding and it to be allowed to take charge of the case.

An action was commenced for this alleged cause against these plaintiffs, and they at once notified the defendant and required

p. 735

it to take charge of its defense. The guarantor failed to do so, and judgment went against these plaintiffs for $8,154.45, payment of which was enforced by execution. They thereupon issued a summons as in the supreme court of this State, and served it upon one Crosby, in the city of New York, upon the assumption that he was director of the corporation.

The defendant moved the court to set it aside upon the grounds : 1. That the defendant is a foreign corporation, and the service was not upon the president, treasurer or secretary of the defendant, or otherwise its representative for that purpose. 2. That the corporation has no property within this State ; and 8, that the plaintiffs’ alleged cause of action did not arise within it. The motion was denied at special and general terms and this appeal taken. We think it must fail.

It is enough if the cause of action arose in this State, and Crosby was, in fact, one of defendant’s directors. Code, § 432, subd. 3.

As to the cause of action, it accrued when the defendant failed to perform its contract, and by reason of its failure the plaintiffs sustained a loss. These events occurred in this State. The plaintiffs were sued in this State, and here, if anywhere, the defendants were required to defend. It is immaterial that the contract to indemnify was made in Wisconsin ; its obligation was to be discharged wherever the plaintiffs were vexed by litigation. It is true, as the appellant contends, that this obligation could only arise upon notice to the corporation of the impending suit, and that such notice was given in Wisconsin.

The plaintiffs were bound to perform this condition where they could find the defendant, and when performed it became a fact in the case, but itself gave no cause of action, nor did one then exist. Its object was to set the defendant in motion. Except for it there could have been no default. But the notice called for performance; that was regulated by the proceedings in this State where the plaintiffs were sued. The defendants’ undertaking was to defend them in that suit, and the cause of action arose when for want of a defense, judgment went against them, and it arose at the place where that judgment was recovered. Performance at no other time or place was possible. We think the summons was well served. The evidence tended to show that Crosby was a director by election, and for aught that appeared it might reasonably be held that he was one in fact. The records of the defendant so declare, and for the purposes of the motion now made by it that declaration is sufficient.

It follows that the order appealed from should be affirmed, with costs.

All concur, except Ktjgek, Ch. J., not voting.