TACA Int'l Airlines v. Rolls-Royce of England, Ltd.

204 N.E.2d 329, 256 N.Y.S.2d 129, 15 N.Y.2d 97 (1965)

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TACA Int'l Airlines v. Rolls-Royce of England, Ltd.

New York Court of Appeals
204 N.E.2d 329, 256 N.Y.S.2d 129, 15 N.Y.2d 97 (1965)

Facts

TACA International Airlines (TACA) (plaintiff), a Salvadorian company, sued England-based Rolls-Royce of England, Ltd (Ltd.) (defendant) in New York for damages sustained to TACA’s airplane in Nicaragua. Ltd. did not have an office or officers in New York, nor was it authorized to do business there. TACA served the summons on an officer of Rolls-Royce, Inc. (Inc.), which was a Delaware corporation with an office and officers in New York. Ltd. challenged the validity of the service of summons because it was served on an officer of Inc. instead of Ltd. The entities Inc. and Ltd. were intertwined in many ways, including (1) Inc. was a wholly owned subsidiary of Ltd., (2) Inc.’s sole business was selling and servicing products manufactured by Ltd., (3) the companies shared directors and some of the key executives, (4) Ltd. provided all technical training to Inc. employees in England, (5) Ltd. authored and published all of the sales literature used by Inc., and importantly, (6) Inc.’s operations were reported on Ltd.’s consolidated earnings statements. Upon Ltd.’s motion, the lower court set aside the service of the summons. The Appellate Division reversed, finding that Inc. merely functioned as a department of Ltd. and that service on an officer of Inc. was valid service on Ltd. Subsequently, Ltd. appealed the Appellate Division’s reversal.

Rule of Law

Issue

Holding and Reasoning (Desmond, C.J.)

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