Woodworkers Tool Works v. Byrne

• Decision Date: 14 September 1951
• Docket Number: No. 12548.,12548.
• Citation: 191 F.2d 667
• Parties: WOODWORKERS TOOL WORKS v. BYRNE.
• Court: U.S. Court of Appeals — Ninth Circuit

191 F.2d 667 (1951)

WOODWORKERS TOOL WORKS v. BYRNE.

No. 12548.

United States Court of Appeals Ninth Circuit.

September 14, 1951.

Tripp & Callaway, Los Angeles, Cal., for appellant.

John W. Olson, Los Angeles, Cal., for appellee.

Before BIGGS, HEALY and POPE, Circuit Judges.

BIGGS, Circuit Judge.

Byrne, a citizen of the State of California, sued the defendant-appellant, Woodworkers Tool Works, an Illinois corporation, bottoming jurisdiction on diversity of citizenship and jurisdictional amount. Section 1332, Title 28 United States Code. Byrne in his first amended complaint alleged that as an employee of Selby Company he was engaged in cutting lumber with a shaper equipped with a new panel raiser head manufactured and sold by the appellant and that the head broke due to structural defects and injured him.

A summons in the usual form issued to Woodworkers Tool Works requiring it to serve an answer on Bryne's attorney. The United States Marshal made the following return: "I hereby certify and return that I served the annexed Summons and Complaint on the therein named Elmer Preuer as agent for Woodworkers Supply Company by handing to and leaving a true and correct copy thereof with Elmer Preuer personally at Los Angeles * * *" (Emphasis added). The discrepancy between the party that Byrne wished to have served, i. e., Woodworkers Tool Works, and the person who was actually served, i. e., Woodworkers Supply Company, is apparent. Woodworkers Tool Works moved to dismiss the action or, in lieu thereof, to quash the return of the service of summons on the ground that Woodworkers Tool Works had not been served properly with process, filing in support of its motion affidavits of Preuer and Dunne.

The Preuer affidavit states that he is the sole owner of Woodworkers Supply Company described as a "proprietorship",¹ and that "* * * he is not an officer, a managing or general agent, or an agent authorized by appointment or law to receive service of process for and/or on behalf of Woodworkers Tool Works, a corporation, * * * organized and existing under * * * the laws of the State of Illinois * * *" Dunne's affidavit avers that he is counsel for Woodworkers Tool Works and that neither that company "nor any of its agents or employees" had been served with process in the action and that Woodworkers Tool Works at the time of the service of process on Preuer, and thereafter, was not doing business in the State of California "so as to render it amenable to the service of process in this action".

The affidavits of Taylor and Walker were filed by Byrne in defense of the service made upon Preuer. Taylor alleged that as an investigator employed by Pacific Employers' Insurance Company he had investigated the circumstances surrounding the sale to the Selby Company of the panel raiser head; that his investigation revealed that Selby Company through its manager, Walker, had called Woodworkers Supply Company and had asked that Woodworkers Supply Company send a representative to Selby Company's plant; that Townsend, a representative of Woodworkers Supply Company, had visited Selby Company in response to this request and showed Walker a catalogue of the appellant, Woodworkers Tool Works, and that Walker had ordered the panel raiser head from the catalogue through Townsend; that a purchase order signed by Selby Company was sent to Woodworkers Supply Company and an invoice was prepared by Woodworkers Supply Company for the purchase of the panel raiser head from the appellant; that Woodworkers Supply Company billed Selby Company directly; and that the panel raiser head was delivered by air express from Woodworkers Tool Works directly to Selby Company. Taylor swore also that he had been informed by Preuer that Woodworkers Supply Company kept a copy of appellant's catalogue and that he, Taylor, saw this; that on its face appeared the words "Woodworkers Tool Works" with a Chicago address. Taylor also stated that at no time did Selby Company "directly contact" the appellant and that "all contacts were exclusively through Woodworkers Supply Company". A copy of the Woodworkers Supply Company's invoice is attached to Taylor's affidavit and it states that the panel raiser head was "shipped directly to customer from factory".

Walker in his affidavit swore that as manager of Selby Company he telephoned Woodworkers Supply Company and requested that they send a salesman to see him; that thereafter Townsend visited Walker at the Selby Company plant, bringing with him a catalogue entitled "Woodworkers Tool Works" and that he, Walker, ordered the panel raiser head from this catalogue; that Townsend informed him that the panel raiser head was manufactured by the appellant and that he, Townsend, "as salesman for Woodworkers Supply Company" represented the Woodworkers Tool Works. Walker's affidavit corroborated that of Taylor in many particulars but Walker also swore that "Selby Company was billed by Woodworkers Supply Company in the total amount of $83.61, * * * that sum representing the purchase price of $75.00, $1.88 tax, and $6.73 representing two telephone calls to Woodworkers Tool Works from Woodworkers Supply Company", and that to Walker's "own personal knowledge" the Selby Company, through Walker, had ordered "other products from Woodworkers Tool Works through the Woodworkers Supply Company."

Upon consideration of the pleadings and the affidavits, the court below denied the appellant's motion to dismiss the action or to quash the service of the summons and required the appellant to answer.

Shortly thereafter Byrne filed a second amended complaint in which liability was sought to be enforced on an additional ground, viz., that Woodworkers Tool Works was negligent and careless in the manufacture, sale and delivery to Selby Company "of a structurally defective panel head". Liability in the first amended complaint had been based upon the theory of a warranty by the appellant that the panel raiser head was safe for use. Woodworkers Tool Works moved to dismiss the cause of action based on warranty. The court below, holding that since its jurisdiction was based on diversity the questions of substantive law presented were to be governed by California law,² and that under that law liability must depend on negligence and not on warranty under the circumstances at bar, dismissed Byrne's first cause of action. The parties thereupon proceeded to trial on the second cause of action based on negligence.³

At the trial Selby, of Selby Company, testified that the panel raiser head was delivered to his company by Woodworkers Tool Works by air express; that he knew Townsend and that Selby Company got a bill from Woodworkers Supply Company for the head;⁴ and that Selby Company received a "manifest" from Woodworkers Supply Company. Townsend testified that he was a machine salesman for Woodworkers Supply Company and that he took the order from the Selby Company for the panel raiser head and sent it to the appellant; that the head was shipped direct to the customer;⁵ that Woodworkers Supply Company handled hundreds of items not manufactured by Woodworkers Tool Works; that Woodworkers Supply Company sells woodworking machinery and supplies retail; and that Woodworkers Supply Company billed the Selby Company direct for the panel raiser head.

Knourek, vice-president of Woodworkers Tool Works, testified by deposition that his company had no salesmen or agents or place of business in California and that Preuer was not an employee of his company or "authorized to act as * * * that company's agent." He stated that the relationship between Woodworkers Tool Works and Woodworkers Supply Company was simply that of vendor and vendee.

Preuer's evidence at the trial was particularly helpful to Byrne on the question of jurisdiction. He was asked what relationship he had with Woodworkers Tool Works and he replied, "We buy and sell machinery and supplies, and in our course of business there are certain items that are manufactured by the Woodworkers Tool Works which we sell on a commission basis." The commission was apparently 10% after purchase price. Preuer stated: "They Woodworkers Tool Works would bill us, if an item were $75.00 they would bill us $75.00 less 10 per cent." Preuer was also asked, "* * * how often during a given year would you say you sell Woodworkers Tool Works products?", and he replied, "* * * that is rather irregular. In other words we may have half a dozen invoices one year, and none the next." But in reply to the question, "But you do have a running course of business with them every year?", Preuer replied, "That is right." He then testified that there were "some items" manufactured by Woodworkers Tool Works which Woodworkers Supply Company sold "at all times". It is not clear from the evidence that the panel raiser head which was used by Byrne was sold by Woodworkers Supply Company for Woodworkers Tool Works on a commission basis though perhaps such an inference would be supportable. The court below made no specific finding on this point since it did not deem the issue to be open at the time this testimony was received. See note 4, supra, and what follows hereinafter.

We reiterate that at no time during the trial did counsel for Woodworkers Tool Works inform the court below that an attempt was being made to demonstrate that Woodworkers Supply Company was not an agent of the appellant or to raise anew the issue as to whether the service of the summons should be quashed. We do not mean to suggest in referring to the testimony taken at the trial that an issue as to the sufficiency of the service should necessarily be pursued beyond the time of answer but if neither the appellant nor any of its agents were served in California, the question is one of due process and is open to further examination. Cf. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, with Milliken v. Meyer, 311 U.S. 457, 461-464, 61 S.Ct. 339, 85 L.Ed. 278. At trial a judgment was rendered...