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December 2, 1957


The opinion of the court was delivered by: BRYAN

Defendant, appearing specially, has moved to quash the service of the summons and dismiss the action for want of jurisdiction of the person upon the grounds that it was not subject to service of process within the Southern District of New York and that service was made upon a person who was not at the time of service authorized to receive service on its behalf.

The complaint seeks damages in the sum of $ 73,740 for breach of written contracts, made in New York, whereby defendant agreed to deliver two cargoes of bunker C oil to plaintiff in Venezuela. It is alleged that defendant failed to deliver the oil at the time and place fixed in the contracts though plaintiff had delivered to defendant in New York, and defendant had accepted there, plaintiff's letter of credit in the sum of $ 199,200 on account of the purchase price. The complaint also sets forth a third cause of action alleging that defendant had no reasonable cause to believe that it could acquire the oil it agreed to deliver to the plaintiff and that defendant's representations that it could and would deliver such oil were untrue and a fraud upon the plaintiff to the plaintiff's additional substantial damage.

 Plaintiff has taken the depositions of various persons on the facts involved on this motion and relies largely on such depositions to establish that service was properly made. However, plaintiff was unable to take the deposition of defendant's president, Buffum, since Buffum refused to appear for examination here.

 Defendant, incorporated in Illinois, is engaged in the production and marketing of oil. Its principal place of business is in Bartlesville, Oklahoma. It is not licensed to do business in New York. It pays no taxes in this State. Its name does not appear in telephone books or directories. it does not have its name on any office door, nor is it listed in any building directory.

 The summons and complaint were served on May 14, 1957 upon one Ben Dundee at his home in Larchmont, N.Y. Dundee had, on March 14, 1957, been elected 'Executive Vice President' of the defendant 'with full signatory powers to contract sale of oil and financing'. Dundee was a consulting engineer who specialized in the marketing of natural resource products. He had been introduced to defendant's president, Buffum, by a Mrs. Howard who had previously sought to sell or market some of defendant's products in the New York area.

 In late February or early March 1957 Dundee, together with two partners of Dormand & Company, with offices at 509 Fifth Avenue, New York, conferred with Buffum in New York concerning Dundee's representation of defendant in the solicitation of oil business here. The Dormand partners were known to Buffum, and it may be fairly inferred that arrangements were then confirmed for Dundee to occupy an office with Dormand & Company for the purpose of carrying on this business. Shortly prior to Dundee's election as executive vice president of the defendant on March 14 he moved into an office at Dormand & Company, and for some two months was engaged in solicitation of business and negotiations on behalf of the defendant for the sale of oil in New York from that office.

 In his capacity as 'Executive Vice President with full signatory powers,' Dundee solicited orders for oil on defendant's behalf from a number of New York brokers and engaged in other business transactions in furtherance of defendant's interests. One of the brokers with whom he was in contact put him in touch with plaintiff's attorney Benton, with whom he negotiated the contracts in suit in New York and signed the offers and confirmed the acceptances of such contracts as defendant's executive vice president here. The letter of credit delivered by plaintiff, pursuant to one of these contracts, was delivered to Dundee in New York and accepted by him as defendant's executive vice president. Another letter of credit under these contract was also tendered to him here.

 The negotiations which Dundee conducted involved substantial sums, and, indeed, the contracts which he signed with plaintiff involved some $ 400,000. Dundee was in almost daily telephone communication with Buffum in the southwest. He carried on regular correspondence from his New York office on defendant's behalf with respect to defendant's business. It is plain that he was conducting business here on defendant's behalf in his capacity as its executive vice president from a New York office with defendant's full knowledge and approval.

 On May 9, 1957 Buffum wrote to Dundee at the New York office advising him that there were difficulties in obtaining the bunker oil which had been contracted for delivery to plaintiff, and indicating that it was unlikely that timely delivery could be made. In the course of this letter Buffum also said:

 'I do not know what repercussions will be attempted by Neris (the plaintiff) and/or Benton (its attorney). However, in order to prevent your becoming involved in any litigation or place Benton in position of serving you as an officer of this company with a service we have cancelled your appointment as Executive Vice President until this matter is clarified. So that if any attempt is made to involve you that you may so state and refuse service. If that is what they have threatened and might attempt purely on a nuisance basis as they would not stand a ghost of a show in court but might put is to a lot of trouble and expense if we would have to come to New York to fight them.'

 Dundee was ill at the time this letter was received at his office but was informed of its contents. When plaintiff's attorney, Benton, served the summons and complaint upon Dundee in Larchmont on May 14, pursuant to an order of the clerk of this court permitting service by him in lieu of service by the United States Marshal, Dundee informed Benton that he was no longer an officer of the company and that the papers were served 'on the wrong party.' He also advised Benton the next day that he had 'tossed the papers away' for that reason. No attempt had been made to inform plaintiff or its attorney of the removal of Dundee as an officer of the company prior to the time when service was made.

 Plaintiff sent copies of the summons and complaint to defendant by registered mail at its main office in Bartlesville, Oklahoma.

 On May 15, 1957, the day after service was made, the papers served were forwarded by Dundee to the defendant's president in Oklahoma with ...

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