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Malavasi v. Villavecchia

Decided: July 22, 1960.


Rosen, J.c.c. (temporarily assigned).


This is an application by defendant Lincoln Manufacturing Company, Incorporated (hereinafter referred to as Lincoln), for an order dismissing the action, or in lieu thereof, to quash the return of summons on the ground that the said defendant is a Maryland corporation and is not subject to the jurisdiction of the courts of this State.

Plaintiff Peter Malavasi instituted this action in negligence against the moving party, defendant Lincoln, and

also against defendant Alfred Villavecchia, individually and trading as A. Villavecchia & Sons.

Plaintiff, who is an electrician, alleges that on August 4, 1958 he was repairing a light in the store of defendant Villavecchia, 1206 Summit Avenue, Union City, New Jersey, and in connection with the said work defendant Villavecchia supplied him with a ladder which was defective. Plaintiff contends defendant Villavecchia was negligent in supplying said ladder to him in that this defendant failed and neglected to warn plaintiff of the condition of the said ladder, represented to plaintiff that the ladder was new, and created an additional hazard by having the floor of the store premises waxed. Plaintiff further alleges the ladder was manufactured by Lincoln in a defective manner, that the ladder broke, and as a result plaintiff fell and suffered personal injuries.

Defendant Lincoln was served with summons and complaint on May 11, 1960 at its principal office, 70 West Main Street, Westminster, Maryland, by registered mail, return receipt requested, in accordance with R.R. 4:4-4(d). In support of its application, the affidavit of Lincoln's sales manager alleges that Lincoln is a corporation of the State of Maryland, and is not incorporated in or licensed to do business within the State of New Jersey; Lincoln does not maintain a district office within the State of New Jersey as an agent of said corporation in order to sell its products; it does not employ local distributors to promote or sell the products of its manufacture, or employ any agents or maintain any offices within this State; nor does it employ agents to sell its products within this State. Apparently Lincoln solicits the sale of its products outside of the State of Maryland by the use of commissioned representatives who are paid on a commission basis; said representatives are not employees or agents of Lincoln, and are not paid on a regular salary basis; Lincoln does not deduct Social Security payments from the commissions forwarded to them; said representatives do not maintain an office

within this State, and no offers made for the purchase of products manufactured by Lincoln are accepted within this State.

Plaintiff's affidavit answers Lincoln by stating the ladder which was used by him was manufactured by Lincoln and was purchased by defendant Villavecchia from Sears Roebuck & Co. in Union City, New Jersey, a short time prior to the alleged accident. The ladder bore a label on it having the designation "Lincoln Manufacturing Co., Inc." and "Tested by United States Testing Co., Inc." Subsequent to August 4, 1958 plaintiff purchased a similar ladder from Sears and the ladder bore the same type of label as previously described. Plaintiff has also visited the Sears store in Union City and saw ladders in the display rack which were similar to the one which caused his injuries. These ladders also bore the same label. Sears, in its catalogue, which is openly displayed on the counter in its store, has a description of the ladder which bears a catalogue number. The catalogue number, when checked with Sears records, disclosed the name "Lincoln Manufacturing Co., Inc., New Windsor, Maryland." The affidavit further states that during the latter part of 1958 Lincoln authorized United States Testing Co., Inc., of Hoboken, New Jersey, to perform a test of its ladders, and that the testing company had received payment for said tests from Lincoln. U.S. Testing Company never did approve the ladders manufactured by Lincoln.

Lincoln submitted an additional affidavit wherein it is stated that no payment was ever made for the placement of the advertisements of its products in the Sears catalogue. It admits that prior to the institution of this action it had occasion to request Sears, in its own behalf, to enlarge the advertisement of the Lincoln products in the catalogue, for which Lincoln would pay a consideration. This request was refused by Sears, as Sears exercises absolute control over the manner and presentation of advertisements in its catalogue.

Apparently it is not disputed that Sears Roebuck and United States Testing Co., Inc., are either incorporated or are authorized to do business in the State of New Jersey.

At oral argument the court was informed that Lincoln was incorporated in New Jersey on November 7, 1946 and did business in New Jersey until February 26, 1952, when its charter was forfeited for nonpayment of taxes. Its registered agent and principal place of business was in West New York, New Jersey. The proclamation of the Governor which forfeited Lincoln's charter did not destroy Lincoln as a corporation but merely suspended it until it complied with the statute permitting it to be reinstated upon payment of delinquent taxes. It has been uniformly held that a reinstatement of a repealed charter relates back to the date of the proclamation of the repeal and validates corporate action in the interim. R.S. 54:11-2, 3, 5 to 8; J.B. Wolfe, Inc. v. Salkind , 3 N.J. 312 (1949).

The question to be decided is whether Lincoln was "doing business" within the State of New Jersey and amenable to service of process in this action.

In determining whether defendant was "doing business" in New Jersey a distinction must be made between the cases which deny a foreign corporation access to its courts and the cases which hold that a foreign corporation may be doing business within the State so as to be subject to the jurisdiction of its courts and amenable to service of process.

The distinction is well articulated in 23 Am. Jur., Foreign Corporations , ยง 362, pp. 339, 340:

"If the question relates to the right to subject a foreign corporation to the jurisdiction of the courts in the state through service of process, the point presented is different from the one presented where it relates to the power of the state to impose conditions, ...

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