Chassis-Trak, Inc. v. Federated Purchaser, Inc.

• Decision Date: 07 January 1960
• Docket Number: Civ. A. No. 812-58.
• Citation: 179 F. Supp. 780
• Parties: CHASSIS-TRAK, INC., Plaintiff, v. FEDERATED PURCHASER, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

179 F. Supp. 780

CHASSIS-TRAK, INC., Plaintiff, v. FEDERATED PURCHASER, INC., Defendant.

Civ. A. No. 812-58.

United States District Court D. New Jersey.

January 7, 1960.

COPYRIGHT MATERIAL OMITTED

McCarter & English, by Verling C. Enteman, Newark, N. J., for plaintiff.

Charles M. Grosman, Newark N. J., and Copal Mintz, New York City, for defendant.

WORTENDYKE, District Judge.

Plaintiff here, a corporation of Indiana, sues upon a judgment recovered by it against the defendant, a corporation of New York, on March 10, 1958, in the Marion County Circuit Court of Marion County, Indiana, for $11,592.15, and costs.

The defendant here has moved for summary judgment, pursuant to the provisions of F.R.Civ.P. 56, 28 U.S.C.A., upon the ground that the Indiana court lacked jurisdiction over defendant, and both parties have stipulated, in open court, upon the return of notice of that motion, that upon the pleadings, depositions and admissions on file, together with the affidavits and other documents submitted for the purposes of this motion, there exists no genuine issue as to any material fact.

At the outset it should be noted that although the complaint alleges that the defendant is a corporation of New Jersey, that allegation was denied in the answer, and the Court has been furnished with documentary evidence from which it appears that the defendant is a corporation organized and existing under the laws of the State of New York; its present name having been adopted, on February 4, 1932, being changed from that of Federated Purchasing Service Corp. under which it was originally incorporated on May 3, 1928. The certificate of incorporation of Federated Purchasing Service Corp. provided that its principal place of business should be in the City of New York. On November 28, 1934 there was filed in the office of the Secretary of State of the State of New York, in behalf of the defendant, a certificate pursuant to Section 24 of the Stock Corporation Law of that State, designating the Secretary of State of New York as the agent upon whom process in any action against the corporation within that State might be served, and directing that a copy of any process so served be mailed to the defendant at 25 Park Place, New York City.¹ On November 5, 1954, Federated Purchaser, Inc. was duly authorized by the Secretary of State of New Jersey to transact business in New Jersey. This authorization to do business was still effective on the date upon which the pending motion was noticed.

In support of its present motion defendant contends that the Indiana judgment here sued upon is invalid for lack of jurisdiction in the Indiana Court over the defendant, because (1) the Indiana statute under which the purported service of process upon the defendant in the action there was not in accord with the due process requirement of the Fourteenth Amendment to the United States Constitution, and (2) there was a failure of compliance with the requirements of the Indiana statute, even assuming its constitutionality. The present motion has been duly argued; briefs having been submitted in behalf of the respective parties upon the questions presented thereby.

On April 24, 1957 defendant's manager of sales and purchases telephoned from defendant's New Jersey place of business at No. 1021 U. S. Route 22 in Mountainside, to plaintiff's representative in Indianapolis, Indiana, advising that defendant was in the market for 501 pairs of Chassis-Trak slides, Catalogue No. RLR 68 and inquiring respecting price and delivery dates therefor. The conversation resulted in an order which was confirmed by defendant's printed purchase order of the same date. This order form bore defendant's address and telephone number at 1021 U. S. Rte. 22, Mountainside, New Jersey, called for the merchandise discussed in the quantities and at the price orally agreed upon by telephone. The order expressly confirmed that telephone order, prescribed price and delivery terms, and bore the following directive: "If you issue statements or if you find it necessary to write us concerning a shipment which has been invoiced previously, such statements or correspondence should be addressed to our office at 1021 U. S. Route 22, Mountainside, New Jersey." This purchase order was acknowledged in writing by Chassis-Trak, Inc. upon its printed form dated April 26, 1957, forwarded and addressed to and received by Federated Purchaser, Inc. at the address directed by the latter's purchase order. Thus came into existence a contract between the parties which plaintiff proceeded to perform in Indiana, in accordance with its terms.

From time to time thereafter the respective representatives of the parties were in contact by mail and telephone concerning the merchandise which was the subject of the agreement, and these communications were at all times between the plaintiff's place of business in Indianapolis and the defendant's place of business in Montainside, New Jersey, and all shipping documents in connection therewith were so addressed.² After the plaintiff had completed its performance of the contract between the parties, plaintiff forwarded its bill to the defendant, at the Mountainside, New Jersey address, as directed in defendant's purchase order. Failing to receive payment thereof in due course, plaintiff, on July 8, 1957, sent its representative to defendant's place of business in Mountainside, New Jersey, where he met Mr. Kornhauser, the representative of defendant who had placed the order for slides, and made demand upon him for payment of the amount due under the contract, viz., $11,097.15. To this demand Kornhauser responded that defendant was prepared to pay the amount stated and that payment had been approved by defendant's appropriate department, but that because of vacations payment had been delayed. Kornhauser promised that a check for the amount due would be issued the week then next following. When the check was not received, follow-up telephone calls by plaintiff's employees to defendant's Mountainside, New Jersey place of business evoked successive reassurances of ultimate payment and explanations that delay was caused by vacations involving defendant's personnel. Finally, on September 13, 1957, Kornhauser informed plaintiff's representative by telephone that the matter of plaintiff's claim had been placed in the hands of defendant's attorney, who would determine whether and when payment should be made. After the transmission of this advice defendant's attorney, Copal Mintz, Esq. (who argued the pending motion here in its behalf) wrote to the plaintiff, under date of September 24, 1957, stating that because some of the merchandise purchased by the defendant from the plaintiff was used by the defendant in the performance of its contract with a third party, and because the third party had refused to pay the defendant therefor, payment of the plaintiff's claim by the defendant would be made promptly after and if the third party made its payment to the defendant.

Summons in the action in the Indiana court, which resulted in the judgment here sued upon, issued February 13, 1958 and was addressed to the Secretary of State of Indiana as the resident agent for Federated Purchaser, Incorporated, which is therein recited as "a foreign corporation not admitted to do business in Indiana, whose address is 1021 U. S. Rte. 22, Mountainside, New Jersey." It was served upon the Secretary of State of Indiana either on the 17th or the 18th of February, 1958, and was by him sent on February 19, 1958 with notice of the action, by United States registered mail, with return receipt requested, to the named defendant at the New Jersey address recited in the summons, directed defendant to appear and answer on or before March 7, 1958, and was admittedly received by defendant on February 21, 1958 at its Mountainside, New Jersey, address.

On February 25, 1958 Copal Mintz, as attorney for the defendant, wrote to the Secretary of State of Indiana, stating that the summons mailed to the defendant by the Secretary, issued out of the Indiana court in the case therein recited, had been turned over to the said attorney by the defendant, and inquired whether there was any record in the Secretary's office of his appointment as resident agent for the defendant. On the same date defendant's said attorney wrote to the attorney for the plaintiff in this Indiana action, advising him also that the summons had been turned over to him, and inquiring of said Indiana attorney "on what you base your right to attempt to effect service of process in the manner which you followed." Although defendant's attorney engaged in further correspondence with both the Indiana Secretary of State and with the attorney for the plaintiff in the Indiana action, no appearance was ever entered by or on behalf of the defendant in the Indiana suit. Counsel for the defendant admitted, during the course of the argument on the pending motion, that he intentionally allowed the Indiana case to proceed to judgment by default because he believed that the Indiana court had not obtained jurisdiction over the defendant.

Section 25-316 of the Indiana statute, pursuant to which the plaintiff undertook to issue and serve the summons in the Indiana action, provides as follows:

"The engaging in any transaction or the doing of any business in this state by any foreign corporation not licensed nor admitted to do business in this state under any existing act or any act hereafter enacted shall be deemed equivalent to an appointment by such foreign corporation of the secretary of state or his successor in office, to be the true and lawful authority and agent of such foreign corporation upon whom may be served all lawful processes, writs, notices, or orders in any action or proceeding against such foreign corporation arising or growing out of, directly or indirectly, any act or thing done by such corporation within the state of Indiana. The engaging in any

...