Hollywood Garment Corp. v. J. Beckerman, Inc.

California Court of Appeal Dec 9, 1943 No. Civ. 14197Published

Before: Wood (w.J.)

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Holding. The court held that a foreign corporation may directly attack a default judgment by showing it was not doing business in the state, thereby depriving the court of personal jurisdiction. Because the defendant successfully refuted the allegation of doing business and moved to vacate within a reasonable time, the trial court's order setting aside the judgment was proper.

Issues

Whether a foreign corporation may directly attack a default judgment on the grounds that it was not doing business in the state.
Whether a defendant must show a meritorious defense when challenging a judgment for lack of personal jurisdiction.
Whether the motion to vacate was made within a reasonable time.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The process of the court of another state cannot reach a New York corporation so long as it confines the exercise of its corporate business within the state of New York.”

“Defendant made a direct attack upon the judgment and the trial court properly received its affidavit in support of the motion to vacate.”

“It was not necessary for defendant to state in its affidavit that it had a meritorious defense, for, the courts of California not having jurisdiction to enter the judgment, defendant could not be compelled to make a defense on the merits.”

WOOD (W.J.), J.

Plaintiff has appealed from an order setting aside a default judgment against defendant.

It is alleged in the complaint, filed on October 27, 1941, in which a cause of action is set forth for the alleged breach of a written contract to deliver merchandise, that defendant is a foreign corporation and that at all times mentioned in the complaint it “did business in the State of California.” An affidavit was filed on August 28, 1942, by plaintiff’s attorney in support of an application for an order for service of summons under section 406a of the Civil Code. In this affidavit it is stated that defendant is a foreign corporation with its principal offices at 152 Madison Avenue, New York City, that no agent had been designated upon whom process could be served and that after due search no agent or other officer of defendant corporation could be found in California. Thereupon an order was made by the superior court authorizing service of summons upon the secretary of state in accordance with the terms of section 406a of the Civil Code. The default of defendant was entered on October 27, 1942, and on the same date judgment was entered in favor of plain

[660]

tiff in the sum of $10,000. On March 11, 1943, defendant gave notice that it would on March 19, 1943, appear specially and move for an order to vacate and set aside the default and the default judgment upon the grounds that the court had no jurisdiction over defendant and that defendant was a foreign corporation which had not at any time done business in the State of California. An affidavit of the president of defendant corporation was filed with the notice of motion. The motion of defendant was granted on April 23, 1943.

A corporation is a resident of the state in which it is created. The process of the court of another state cannot reach a New York corporation so long as it confines the exercise of its corporate business within the state of New York. But it is generally provided by statute that when a corporation conducts business in a state other than that of its creation it is amenable to the process of the courts in the states where it conducts business.

(Jameson

Hollywood Garment Corp. v. J. Beckerman, Inc.

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WOOD (W.J.), J.

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