Tyee Const. Co. v. Dulien Steel Products, Inc., of Wash.

• Decision Date: 10 May 1963
• Docket Number: No. 36302,36302
• Citation: 381 P.2d 245,62 Wn.2d 106
• Court: Washington Supreme Court
• Parties: TYEE CONSTRUCTION COMPANY and St. Johns Motor Express Company, Washington corporations, a joint venture, Plaintiffs, v. DULIEN STEEL PRODUCTS, INC., OF WASHINGTON, Appellant, Belyea Company, Inc., Respondent.

Page 106

62 Wn.2d 106

381 P.2d 245

TYEE CONSTRUCTION COMPANY and St. Johns Motor Express

Company, Washington corporations, a joint venture, Plaintiffs, v. DULIEN STEEL PRODUCTS, INC., OF WASHINGTON, Appellant, Belyea Company, Inc., Respondent.

No. 36302.

Supreme Court of Washington, Department 2.

May 10, 1963.

Robbins, Oseran & Robbins, Melville Oseran, Michel Stern, Seattle, for appellant.

Cartano, Botzer & Chapman, Stephen C. Watson, Seattle, for respondent.

HAMILTON, Judge.

This is an appeal from an order quashing, for lack of jurisdiction, out-of-state service, of a summons and cross-claim, upon respondent, Belyea Company, Inc. (a New Jersey corporation, hereafter referred to as Belyea).

The suit giving rise to the cross-claim and to this appeal was initiated by plaintiffs, Tyee Construction Company and St. Johns Motor Express Company (domestic corporations, hereafter referred to as Tyee) against defendant-appellant, Dulien Steel Products, Inc., of Washington (a domestic corporation, hereafter referred to as Dulien).

By its suit, Tyee seeks to recover alleged extra labor costs incurred under a contract with Dulien, whereby Tyee was to dismantle and load for shipment to National Carbon Company of New York three used electrical generators.

The generators, located in the state of Washington, belonged to Dulien. Dulien solicited Belyea to buy or sell the generators. Belyea negotiated the ultimate purchase of the generators by National Carbon Company of New York. The dismantling and loading operations were to be carried out by Dulien, under the direction of an electrical engineer, residing in Washington, designated by National Carbon Company. Dulien contracted with Tyee for performance of such operations. A dispute arose as to methods being utilized by Tyee in dismantling and loading the generators, precipitation this suit by which Tyee seeks to recover from Dulien the alleged extra labor costs.

Dulien, alleging Belyea's responsibility for the added labor costs, sought and obtained an ex parte order adding Belyea as an additional party defendant, and authorizing service of a cross-claim. Following personal service in New Jersey, of Dulien's cross-claim and an amended complaint by Tyee, Belyea moved to quash service asserting lack of jurisdiction.

Belyea's motion was presented upon affidavits and, following argument, the trial court granted the motion for the reason that Belyea

'* * * was not transacting any business within this state within the meaning of RCW 4.28.185(a), nor * * * subject to this court's jurisdiction on any grounds whatsoever, and for this court to assert jurisdiction * * * would be violative of due process. * * *'

Dulien assigns error to the trial court's action. We will assume, without deciding, that the trial court's order in the instant case is appealable.

RCW 4.28.185 reads:

'(1) Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts in this section enumerated, thereby submits said person, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of said acts:

'(a) The transaction of any business within this state;

'(b) The commission of a tortious act within this state '(c) The ownership, use, or possession of any property whether real or personal situated in this state;

'(d) Contracting to insure any person, property or risk located within this state at the time of contracting.

'(2) Service of process upon any person who is subject to the jurisdiction of the courts of this state, as provided in this section, may be made by personally serving the defendant outside this state, as provided in RCW 4.28.180, with the same force and effect as though personally served within this state.

'(3) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him is based upon this section.

'(4) Personal service outside the state shall be valid only when an affidavit is made and filed to the effect that service cannot be made within the state.

'(5) In the event the defendant is personally served outside the state on causes of action enumerated in this section, and prevails in the action, there may be taxed and allowed to the defendant as part of the costs of defending the action a reasonable amount to be fixed by the court as attorneys' fees.

'(6) Nothing herein contained limits or affects the right to serve any process in any other manner now or hereafter provided by law.'

Dulien contends that, within the purport and intent of this statute and the due process clause of the federal constitution, Belyea, by the generator transaction, became amenable to the in personam jurisdiction of the state of Washington. Belyea contends the contrary.

RCW 4.28.185, Laws of 1959, chapter 131, § 2, p. 669, is patterned after the Civil Practice Act of Illinois, S.H.A. ch. 110, § 17; Ill.Rev.Stat. 1961, ch. 110, § 17.

In the language of the Supreme Court of Illinois, in Nelson v. Miller, 11 Ill.2d 378, 389, 143 N.E.2d 673, the statute, except as may be limited by its terms, reflects on the part of the legislature 'a conscious purpose to assert jurisdiction over nonresident defendants to the extent permitted by the due-process clause.'

In Pennoyer v. Neff, 95 U.S. 714, 722, 727, 24 L.Ed. 565, the 'extent permitted by the due-process clause' was expressed, in 1877, as follows '* * * The several States are of equal dignity and authority, and the independence of one implies the exclusion of power from all others. And so it is laid down by jurists, as an elementary principle, that the laws of one State have no operation outside of its territory, except so far as is allowed by comity; and that no tribunal established by it can extend its process beyond that territory so as to subject either persons or property to its decisions. 'Any exertion of authority of this sort beyond this limit,' says Story, 'is a mere nullity, and incapable of binding such persons or property in any other tribunals.' Story, Confl.Laws, sect. 539.

* * *

* * *

'* * * where the entire object of the action is to determine the personal rights and obligations of the defendants, that is, where the suit is merely in personam, constructive service in this form upon a non-resident is ineffectual for any purpose. Process from the tribunals of one State cannot run into another State, and summon parties there domiciled to leave its territory and respond to proceedings against them. Publication of process or notice within the State where the tribunal sits cannot create any greater obligation upon the non-resident to appear. Process sent to him out of the State, and process published within it, are equally unavailing in proceedings to establish his personal liability.'

Pennoyer v. Neff, supra, went on to establish that a judgment is not entitled to full faith and credit unless it satisfies the requirements of due process.

In 1945, a significant departure from the in personam jurisdictional concepts of Pennoyer v. Neff, supra, took place. The United States Supreme Court, in International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95, speaking through Justice Stone, announced:

'Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714, 733, 24 L.Ed. 565. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' * * *' (Italics ours.)

Since the International Shoe Co. case, the United States Supreme Court has considered application of the new concept in Traveler's Health Ass'n v. Com. of Virginia, ex rel. State Corp. Commission, 339 U.S. 643, 70, S.Ct. 927, 94 L.Ed. 1154; Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485; McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283.

In McGee v. International Life Ins. Co., supra, the court observed [355 U.S. p. 222, 78 S.Ct. p. 201]:

'Looking back over this long history of litigation a trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other non-residents. * * *'

However, in Hanson v. Denckla, supra, the court cautioned [357 U.S. p. 251, 78 S.Ct. p. 1238]:

'* * * it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. See Vanderbilt v. Vanderbilt, 354 U.S. 416, 418, 77 S.Ct. 1360, 1362, 1 L.Ed.2d 1456. Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. However minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has had the 'minimal contacts' with that State that are a prerequisite to its exercise of power over him. * * *'

From this conceptual background, we turn to the Supreme Court's application thereof to foreign corporations or nonresident defendants.

The Supreme Court, in the International Shoe Co. case, dealing with a nonresident corporate defendant maintaining a number of salesmen within the forum state, said [326 U.S. pp. 316, 319, 66 S.Ct. pp. 158, 159] 'Since the...