Street & Smith Publications v. Spikes

• Citation: 120 F.2d 895
• Decision Date: 12 June 1941
• Docket Number: No. 9691.,9691.
• Parties: STREET & SMITH PUBLICATIONS, Inc., v. SPIKES.
• Court: U.S. Court of Appeals — Fifth Circuit

120 F.2d 895 (1941)

STREET & SMITH PUBLICATIONS, Inc., v. SPIKES.

No. 9691.

Circuit Court of Appeals, Fifth Circuit.

June 12, 1941.

Neil P. Cullom, of New York City, and J. I. Kilpatrick and E. L. Klett, both of Lubbock, Tex., for appellant.

G. E. Lockhart and Franklin D. Brown, both of Lubbock, Tex., for appellee.

Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit, brought by plaintiff, a citizen of Texas, against defendant, a foreign corporation, organized under the laws of New York, and without permit to do business in Texas, was for libel. The alleged defamatory article was made and published by defendant in Western Story Magazine, a magazine printed in Chicago, Illinois, and sold and distributed in Texas under the usual magazine dealers contract.

Summons to defendant by service of the writ upon "K. H. Page, as defendant's local agent in Ft. Worth, Texas", was sustained over defendant's motions and pleas, that it was not doing and had never done business in Texas, so as to be present there,¹ and that K. H. Page was not an officer, agent or other representative upon whom service could be had.² Thereafter, defendant, not appearing generally, or otherwise submitting itself to the jurisdiction of the court, but reserving all its pleas, motions and objections, answered, and there was a trial before a jury, with a verdict and judgment against defendant. Defendant is here insisting; (1) that it was error to overrule its motions and pleas to the jurisdiction; (2) that if mistaken in this, the pleading and proof did not support plaintiff's claim of defamation by the alleged libelous publication.

Because we think it clear that appellant's motions and pleas were well taken, and that the proceedings subsequent to their overruling, were without jurisdiction, we will not consider the point it makes on the merits. The evidence on the jurisdictional point is undisputed and may be briefly stated. Plaintiff is incorporated under the laws of New York, its principal place of business is in the City of New York. It has not and has never had a permit to do business in Texas, and its publications are distributed interstate, through dealers who purchase its magazines and themselves distribute them in the states. K. H. Page, its Texas distributor, under a wholesale distributor's contract, purchases and sells its magazines in Texas, as its distributors in other states purchase and distribute them there. Page, the Texas distributor, bought magazines, not only from appellant but from other publishers, and sold them to dealers in Texas, only 3 to 5% of his business being done with appellant.

Page, like the other distributors, maintained an individual place of business, at his own expense, paying his own rents and salaries; if any of his customers defaulted, the loss fell on him. Appellant, never had any office or place of business in Texas, never had any agent or other representative in the state; never had or kept any publications in the state for sale; never solicited any business in the state; never entered into any contracts nor kept any bank account nor made any collections there. Monthly checks of the distributor are mailed to New York and in the event of default on his part, his indebtedness is liquidated by a cash deposit, held by appellant in New York as security for the faithful performance of the obligations of his distributor's contract. Among its material obligations the contract requires the publisher to supply magazines and periodicals, f. o. b., Lubbock, Texas, at its regular price and terms, and requires the distributor to pay for the magazines and periodicals, delivered to him under the contract, at the prices and upon the terms set forth in the invoices.

In summary, appellant has no office, officer, director, executive, statutory or other agent or employee, in Texas; it never conducted any of its executive functions in that State and at no time had a bank account, property, books, corporate or other records in Texas. It makes no...