267 U.S. 333 (1925), 255, Cannon Manufacturing Company v. Cudahy Packing Company

Docket Nº:No. 255
Citation:267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634
Party Name:Cannon Manufacturing Company v. Cudahy Packing Company
Case Date:March 02, 1925
Court:United States Supreme Court

Page 333

267 U.S. 333 (1925)

45 S.Ct. 250, 69 L.Ed. 634

Cannon Manufacturing Company

v.

Cudahy Packing Company

No. 255

United States Supreme Court

March 2, 1925

Argued January 28, 1925

ERROR TO THE DISTRICT COURT OF THE UNITED STATES

FOR THE WESTERN DISTRICT OF NORTH CAROLINA

Syllabus

1. Defendant, a Maine corporation, marketed its products in North Carolina through a subsidiary, an Alabama corporation which it completely dominated through stock ownership and otherwise, but a distinct corporate entity which did not act as the defendant's agent, but bought the defendant's goods and sold them to dealers to be shipped directly from the defendant.

Held:

(a) That the defendant corporation did not thereby do business in North Carolina so as to be present there and suable in the federal court. P. 334.

(b) That the concentration of the Alabama corporation's stock in the defendant's single ownership and the legal consequences of this under the Alabama law did not have the effect of rendering its business in North Carolina the business of.the defendant for purposes of jurisdiction. P. 337.

292 F. 169 affirmed.

Appeal from a judgment dismissing an action on contract for want of jurisdiction over the defendant corporation.

Page 334

BRANDEIS, J., lead opinion

MR. JUSTICE BRANDEIS delivered the opinion of the Court.

Cannon Manufacturing Company, a North Carolina corporation, brought, in a court of that state, this action against Cudahy Packing Company, a Maine corporation, for breach of a contract to purchase cotton sheeting for use in packing meat. The defendant appeared specially for the purpose of filing a petition for removal to the Federal Court for Western North Carolina, and the order of removal issued. In that court, the defendant, appearing specially, moved that the summons be set aside and the action dismissed for lack of jurisdiction. The ground of the motion was that the defendant was not doing business within the state, and had not been served with process. The only service made was, as the sheriff's return recites, the delivery of a copy of the

summons and complaint to Cudahy Packing Company of Alabama, agent of defendant, Frank H. Ross, to whom papers were delivered, being process agent of Cudahy Company of Alabama.

The district court, concluding upon the evidence that the defendant was not present in North Carolina, entered a final judgment dismissing the action. 292 F. 169. The case is here under § 238 of the Judicial Code, the question of jurisdiction having been duly certified.

The main question for decision is whether, at the time of the service of process, defendant was doing business within the state in such a manner and to such an extent

Page 335

as to warrant the inference that it was present there. Bank of America v. Whitney Central National Bank, 261 U.S. 171. In order to show that it was, the plaintiff undertook to establish identity pro hac vice between the defendant and the Alabama corporation. The Alabama corporation, which has an office [45 S.Ct. 251] in North Carolina, is the instrumentality employed to market Cudahy products within the state; but it does not do so as defendant's agent. It buys from the defendant and sells to dealers. In fulfillment of such contracts to sell, goods packed by the defendant in Iowa are shipped direct to dealers, and from them the Alabama corporation collects the purchase price. Through ownership of the entire capital stock and otherwise, the defendant dominates the Alabama corporation, immediately and completely, and exercises control both commercially and financially in substantially the same way, and mainly through the same individuals, as it does over those selling branches or departments of its business not separately incorporated which are established to market the Cudahy products in other...

To continue reading

FREE SIGN UP