Case Summary: Telephone Secretarial Service v. S.R. Sherman

Supreme Court, Appellate Term, Second Department — November 9, 1966 (Per Curiam)

Factual and Procedural Background

The appeal arises from an action concerning a contract for telephone service that included an automatic renewal clause. The Appellant is Telephone Secretarial Service and the Respondent is S.R. Sherman. The appeal is from a decision of the District Court of Nassau County (Henderson W. Morrison, J.). The trial court had entered judgment and an order granting summary judgment dismissing the complaint. The Appellate Term issued a per curiam opinion affirming that judgment and order and awarded $10 costs.

Counsel of record as shown in the opinion: Richard B. Schwartz and Sol S. Zuckerman for appellant; Broder Feinberg Charles (Alfred W. Charles of counsel) for respondent.

Legal Issues Presented

1. Whether the automatic renewal clause in the telephone service contract is governed by section 5-903 of the General Obligations Law and therefore inoperative in the absence of a prior notice to the subscriber calling attention to the clause.
2. Whether a contract for telephone service falls within the statute's coverage of contracts "for service, maintenance or repair to or for any real or personal property."
3. Whether a service is properly regarded as rendered "for" property when it is rendered "in connection with" property, specifically where use of telephone equipment is indispensable to the rendition of the service.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's analysis is concise and proceeds from statutory interpretation and application to the contract at issue:

1. The court identified the controlling statute as section 5-903 of the General Obligations Law, which governs automatic renewal clauses in contracts for "service, maintenance or repair to or for any real or personal property."
2. The court held that a contract to furnish telephone service is implicitly an agreement that includes an obligation to service the equipment used to provide that telephone service. The court therefore concluded the contract falls within the statutory language covering services rendered to or for property.
3. The opinion states it is immaterial whether the servicing of equipment is performed by the promisor itself or by another acting on its behalf; the statute's coverage is not restricted by who performs the servicing.
4. The court rejected any requirement that the "service to property" be the exclusive service for which a client pays; it saw no policy reason to construe the remedial statute narrowly. The statute was characterized as aimed at remedying a widespread abuse.
5. The court further reasoned that a service may be regarded as rendered "for" property when it is rendered "in connection with" property; applying that principle, the court found that the use of telephone equipment is indispensable to the rendition of telephone service, and thus the statutory term "for" property is satisfied here.
6. Because the automatic renewal clause fell within section 5-903's coverage, the clause was inoperative in the absence of a prior notice to the subscriber calling attention to the clause.

Holding and Implications

Holding: The court affirmed the judgment and order granting summary judgment dismissing the complaint, concluding that the automatic renewal clause was governed by General Obligations Law § 5-903 and was inoperative in the absence of the statutorily required prior notice. The judgment and order were unanimously affirmed, with $10 costs.

Implications: The direct effect of the decision is the invalidation, for lack of prior notice, of the automatic renewal clause in the telephone service contract at issue and the affirmation of the dismissal of the complaint. The opinion does not set forth or announce any broader or separate precedential holdings beyond application of the statute to the facts presented.

Per Curiam. Concurrence noted by DI GIOVANNA, GULOTTA and BAKER, JJ.