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Mayflower Industries v. Thor Corp.

Decided: March 26, 1953.

MAYFLOWER INDUSTRIES, A NEW JERSEY CORPORATION, PLAINTIFF,
v.
THOR CORPORATION, AN ILLINOIS CORPORATION, DEFENDANT-RESPONDENT, AND TELDISCO, INC., A NEW JERSEY CORPORATION, DEFENDANT, AND MORRIS S. SEGAL CORPORATION, DEFENDANT-APPELLANT, AND MORRIS S. SEGAL AND SEAMARK REALTY COMPANY, ADDITIONAL DEFENDANTS ON COUNTERCLAIMS OF THOR CORPORATION



Eastwood, Francis and Jayne. The opinion of the court was delivered by Eastwood, S.j.a.d.

Eastwood

[25 NJSuper Page 249] Prior to March 1950 Mayflower Corporation was a distributor of Thor products in the State of New Jersey. The Morris S. Segal Corporation, incorporated in New York, was its sole sales agent for Thor products and other appliances and furniture sold by Mayflower in the State of New Jersey. The Mayflower Corporation having instituted its action in the Chancery Division to restrain the Thor Corporation from terminating its franchise, obtained an ex parte restraint on March 20, 1950. With the consent

of Mayflower, the restraint was vacated in May 1951. Mayflower's motion to dismiss the Thor Corporation's counterclaim for malicious prosecution was denied. Thereafter, Mayflower sought unsuccessfully to reinstate its complaint. Mayflower Industries v. Thor Corp. , 17 N.J. Super. 505 (Ch. Div. 1952), affirmed 20 N.J. Super. 39 (App. Div. 1952), appeal dismissed (Sup. Ct. Sept. 30, 1952).

Subsequently, the Thor Corporation was granted leave to file supplemental counterclaims, thereby making the Segal Corporation, Morris S. Segal, individually, and Seamark Realty Company, a New Jersey corporation, additional parties defendants. Thor's supplemental counterclaim against Segal Corporation is grounded in tort, charging malicious prosecution based upon acts and conduct of the Segal Corporation during a period of time when it was assertedly doing business in New Jersey.

On June 27, 1952 a summons and supplemental counterclaims were served upon Segal Corporation by making service thereof on Morris S. Segal, its president, at his home in Deal, New Jersey. Incidentally, Mr. Segal was also president of Mayflower Corporation.

Segal Corporation moved to dismiss the counterclaim for insufficiency of service of process and lack of jurisdiction over it. Following a hearing at which the parties submitted their respective affidavits on the question of whether the Segal Corporation had been or was doing business in New Jersey and the oral testimony of a witness for the Thor Corporation, the Chancery Division concluded "that the Morris S. Segal Corporation is doing business within the State, and that service of process upon its president was legal and proper service" and found that the corporation "was present in the State at the time the cause of action arose." The Segal Corporation appealed from the ensuing order.

In its motion for dismissal of the counterclaim, the Segal Corporation relied upon the affidavit of Morris S. Segal, who stated in substance that the Segal Corporation had never qualified nor was it authorized to do business in New Jersey;

that the corporation acted as sales agent for other companies and all orders solicited for them in New Jersey were subject to acceptance by the principal, outside the State.

Owen G. Nugent, vice-president of Thor Corporation, stated by affidavit and in oral testimony that Morris S. Segal owned the Segal Corporation; that Segal Corporation was the exclusive sales agent of Mayflower Corporation and conducted its business from offices in Newark, New Jersey; that since Mayflower Corporation was a New Jersey corporation, any orders solicited for it by Segal Corporation were accepted here; that numerous salesmen reported for work with the Segal Corporation at the Newark office, and that on occasions Mr. Segal held meetings with Thor representatives in the Newark office; that as of February 7, 1952 it had its name on the door at 317 Halsey Street, Newark, New Jersey, as evidenced by a photograph thereof, where Mayflower also had its offices; that it had a telephone in Newark which was listed in the Newark telephone directory; that it maintained a bank account in Newark, New Jersey, and introduced a letter he received from Segal Corporation signed by Morris S. Segal, referring to the "New Jersey Division" of Segal Corporation.

The Segal Corporation contends that it was not doing business in this State on June 24, 1952 when Thor filed its supplemental counterclaim, and, therefore, being a foreign corporation, it was not amenable to process in New Jersey.

The issue here is whether a foreign corporation must be doing business in this State at the time the action is instituted in order to subject it to the jurisdiction of the courts of this State, or whether -- assuming that service may be made upon its representative -- the test of proper service is that the corporation was doing business in New Jersey when the cause of action arose and that it arose out of the actions of the foreign corporation while so engaged in business in this State.

Notwithstanding the fact that Segal Corporation was not registered as a foreign corporation authorized to do business in New Jersey, the ...


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