FRAZIER, III v. Alabama Motor Club, Inc.

• Decision Date: 09 August 1965
• Docket Number: No. 21747.,21747.
• Citation: 349 F.2d 456
• Parties: John G. FRAZIER, III, and Emily Louise Frazier, Appellants, v. ALABAMA MOTOR CLUB, INC., et al., Appellees. David R. LOWELL, Administrator, c.t.a., of the Estate of John G. Frazier, Jr., Appellant, v. ALABAMA MOTOR CLUB, INC., et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

349 F.2d 456 (1965)

John G. FRAZIER, III, and Emily Louise Frazier, Appellants, v. ALABAMA MOTOR CLUB, INC., et al., Appellees.

David R. LOWELL, Administrator, c.t.a., of the Estate of John G. Frazier, Jr., Appellant, v. ALABAMA MOTOR CLUB, INC., et al., Appellees.

No. 21747.

United States Court of Appeals Fifth Circuit.

August 9, 1965.

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William M. Pate, Atlanta, Ga., Ernest W. Machen, Jr., Charlotte, N. C., Mitchell, Clarke, Pate & Anderson, Atlanta, Ga., Blakeney, Alexander & Machen, Charlotte, N. C., Welden & Underberg, St. Petersburg, Fla., of counsel, for appellants.

Hamilton Lokey, Atlanta, Ga., William D. Becker, Louisville, Ky., for appellees.

Before TUTTLE, Chief Judge, and EDGERTON^* and SMITH,^** Circuit Judges.

WILLIAM F. SMITH, Circuit Judge:

The plaintiffs in these actions,¹ the Fraziers, individually, and Lowell, as Administrator c. t. a., of the Estate of John G. Frazier, Jr., seek judgments declaratory of their rights under contracts, copies of which are annexed to the respective complaints. The Fraziers are citizens of North Carolina and Lowell is a citizen of Florida. Each defendant is incorporated under the laws of one of the following states: Alabama, Arkansas, Indiana, Kentucky, Louisiana, Mississippi, Tennessee, Texas, or West Virginia. The defendants are admittedly not authorized to do business in Georgia. The jurisdiction of the District Court was invoked on the ground of diversity of citizenship under § 1332(a) and (c) of Title 28 U.S.C.A.

The action came before the court below on motions to dismiss the complaints on the ground, among others, that venue had been improperly laid in the Northern District of Georgia. The defendants argued that they are not "doing business" in the forum district within the meaning of § 1391(c) of Title 28 U.S. C.A., and are therefore not subject to suit or amenable to the service of process therein. The court below decided the issue of venue in favor of the movants and dismissed the complaints. This appeal followed.

The defendants here argue at the outset that the decision of the lower court was based upon findings of fact which may not be set aside "unless clearly erroneous" under rule 52(a) of the Fed. Rules Civ.Proc., 28 U.S.C.A. The argument requires only brief discussion. The findings of fact were based solely on the undisputed testimony contained in the deposition of one T. Chalmer Bryant, the President, Treasurer and chief executive officer of each of the defendants; there was no issue of credibility.

It has been held by this Court that under such circumstances findings of fact are reviewable on appeal and need not be given the weight usually accorded them under the rule. Mayo v. Pioneer Bank & Trust Company, 297 F.2d 392, 395 (5th Cir. 1961) and the cases therein cited. Absent any issue of credibility we are in as good a position as was the trial court to evaluate the testimony, draw the inference of which the testimony is reasonably susceptible, and decide the critical issue raised. The case of Merry Manufacturing Co. v. Burns Tool Company, 335 F.2d 239 (5th Cir. 1964), upon which the defendants rely, is inapposite. Therein the court below was called upon to decide important issues of credibility.

Section 1391(c) provides: "A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes." (Emphasis supplied). Whether a corporation is present and "doing business" within the forum district so as to subject it to suit therein is essentially a question of fact which must be decided under federal law.

There is no exact formula under which the question can be decided. To reach the proper answer, consideration must be given to such relevant factors as the general character of the corporation, the nature and scope of its business operations, the extent of the authorized corporate activities conducted on its behalf within the forum district, the continuity of those activities, and its contacts within the district. See Perkins v. Benguet Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1951); International Shoe Co. v. State of Washington, 326 U.S. 310, 315-320, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and the cases hereinafter cited. A corporation is present within the forum district when its activities there "have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization of an agent to accept service of process has been given." International Shoe Co. v. Washington, supra.

The defendants, organized under the laws of their respective states as either motor clubs or automobile associations, are commercial enterprises engaged in rendering various services to their enrolled members. They also provide certain types of indemnity coverage underwritten by an independent insurance company. The chief executive officer of each defendant is its President and Treasurer, T. Chalmer Bryant, who maintains an office in Atlanta, from which he manages, supervises and controls the business operations of each of the corporations. The board of directors of each defendant is comprised of only three members, Bryant, his wife, and one William D. Becker, who is also Vice President and General Counsel. The boards meet regularly in the offices of National Enterprises, Inc., also located in Atlanta. The usual corporate records of each defendant, such as minute books, transfer registers, etc., are kept in the same offices.

A majority of the stock of each defendant is owned by National Enterprises, Inc., a Georgia corporation, having its principal and only place of business in Atlanta; the remainder is owned by Bryant, his wife, and Becker. The principal stockholders of National are Bryant, its President and Treasurer, Becker, its Vice President and General Counsel, and Mrs. Bryant. They also comprise the board of directors. The chief executive officer of National is Bryant, who, as hereinabove noted, serves in the same capacity for each of the defendants.

National, through its officers and employees, is engaged exclusively in the...