Afram v. Balfour, Maclaine, Inc.

• Decision Date: 04 June 1974
• Docket Number: No. 159,159
• Parties: A. L. AFRAM, Respondent, v. BALFOUR, MACLAINE, INC., Appellant.
• Court: Wisconsin Supreme Court

Page 288

218 N.W.2d 288

63 Wis.2d 702

A. L. AFRAM, Respondent, v. BALFOUR, MACLAINE, INC., Appellant.

No. 159.

Supreme Court of Wisconsin.

June 4, 1974.

William A. Stearns, Quarles, Herriott, Clemons, Teschner & Noelke, Milwaukee, for appellant.

Milton Shinken, Shinken & Shinken, Milwaukee, for respondent.

HEFFERNAN, Justice.

Because the trial judge erroneously assigned the burden of proof to the defendant, and in addition failed to make any findings of fact, our review of the order is made more difficult.

The defendant at the outset of the trial on the jurisdictional question objected to the fact that it had the burden, both of persuasion and going forward with the evidence, placed upon it. In effect, it became the task of the defendant to prove a negative--that there was no jurisdiction. It is error to require a defendant objecting to jurisdiction to show the nonapplicability of the Wisconsin long-arm statutes. We have stated as much in Rauser v. Rauser (1970), 47 Wis.2d 295, 300, 177 N.W.2d 115, when, in reference to the facts of that case, we said sec. 262.05(5)(a). Stats., did not provide a basis for jurisdiction because the plaintiff did not establish that defendant had made a promise to perform services.

Moreover, sec. 262.18, Stats., specifies that, in the case of default, the plaintiff has the obligation to prove prima facie the facts supporting jurisdiction. The obligation to make such proof prima facie is upon the party asserting jurisdiction whether the matter is contested or not.

If there were any doubt upon whom the burden ought to fall, the record in the instant case is convincing. The hearing consisted of the defendant attempting to prove the non-existence of a factual underpinning of jurisdiction. The defendant's order of proof was met by a barrage of objections on the ground of irrelevancy. It was apparent by the end of the hearing that the format adopted was cumbersome and unworkable. The trial judge acknowledged near the end of the proceedings that he had probably erred in assessing the burden of proof. We no doubt could set aside the order on the ground of erroneous procedure which prevented a trial of the real issues. This, however, would penalize the defendant, who raised the proper objection repeatedly.

Perhaps it was because of the error in assigning the burden that the trial judge concluded not to make findings of fact. At any rate, there are none.

Ordinarily, our question on review is to look to the findings and sustain them unless they are contrary to the great weight and clear preponderance of the evidence. In the instant case, since there are no findings, the trial judge's conclusion is not to be given the special deference which this court ordinarily gives to a finder of the facts. What we review is a conclusion of law. Accordingly, that conclusion will be sustained only if it is supported by the preponderance of the evidence, i.e., we are obliged to put ourselves in the shoes of the fact finder and test the plaintiff's assertion of jurisdiction. This court, however, is one of appellate jurisdiction only, and we will resolve factual matters only when they are undisputed or susceptible to proof by judicial notice.

By stating the posture of this case, the small likelihood of the plaintiff prevailing is at once apparent. The plaintiff never assumed the burden that should properly have fallen upon him, and few of the facts upon which a jurisdictional decision could be based are wholly uncontested.

There are some salient facts, however, which appear to be uncontested. The New York brokerage house of Balfour was not the contracting party in the disputed telephone conversation of February 5, 1969. Its only function was to relay the order to Watson, the London broker. The written confirmation of the transaction came in this case, as it routinely did, not from Balfour in New York, but from Watson in London, on a form that specified that the only parties to the agreement were Watson and Afram. Proceeds or deficits were to be paid only by these parties. The record shows that Watson sent checks in pounds sterling directly to Afram until Afram requested as a convenience that the conversion to dollars be made for him by Balfour. Although there was some evidence that in some cases the transaction in London was immediately confirmed by a telephone call from Balfour to Afram, there was no proof of that in this instance.

In short, the proof fails to show any relationship of Balfour to the instant transaction, except as a transmittal agent. We do not here decide the merits, but if, as seems to be the underlying claim of Afram, Balfour erroneously or negligently transmitted the order to London, the claim might well fall into the field of tort and not under sec. 262.05(5), Stats., Local Services, Goods or Contracts.

Under sec. 262.05(5), Stats., personal jurisdiction is based upon the relationship of the particular transaction to Wisconsin, rather than upon the defendant's relationship to the state.

The notes of Prof. G. W. Foster, Jr., the reporter for the revision of the jurisdictional statutes, appear in the 1970 Wisconsin Annotations commencing on page 1298.

In referring to the portion of the revision covered by sec. 262.05(5), Stats., the reporter states:

'In the second situation there is some degree of consensual privity between the plaintiff and defendant with respect to the action brought. In these cases it is not necessary that the defendant have done any act within the state; the basis for personal jurisdiction is rather that the defendant has entered some consensual agreement with the plaintiff which contemplates a substantial contact in Wisconsin. The contemplated contact may include performance of services in the state by either party, the production, use or consumption of goods within the state, the payment of money secured by local property, the payment of money upon the happening of some insured event within the state, or the agreement to insure a resident of the state against the happening of an event which might occur anywhere. See subs. (5), (6), (7) and (10).' (P. 1302)

On page 1307, further discussing sec. 262.05(5), Stats., Professor Foster states:

'Three jurisdictional facts are required by this subsection: (i) a claim arising out of a bargaining arrangement made with the defendant by or on behalf of the plaintiff; (ii) a promise or other act of the defendant, made or performed anywhere, which evidences the bargaining arrangement sued upon; and (iii) a showing that the arrangement itself involves or contemplates some substantial connection with the state.'

Sec. 262.05(5)(a), Stats., requires that there be a promise by the defendant to perform services within the state or to pay for services within this state that are to be performed by the plaintiff. There has been no proof that Balfour was to perform any services within this state, nor any allegation that it would pay for any services of the plaintiff to be performed in this state.

Neither is sec. 262.05(5)(b), Stats., applicable. Certainly, there is no proof that the defendant Balfour actually performed any services for Afram in the State of Wisconsin or that Afram performed any services for Balfour.

Perhaps the plaintiff could assert facts that would support a finding of jurisdiction under sec. 262.05(5)(a) or (b), Stats., but it has chosen not to assume the burden of doing so. As we see the undisputed facts, any mutual obligations that arose out of the particular transaction were between Afram and Watson and not Afram and Balfour.

Secs. 262.05(5)(c), (d), and (e), Stats., are concerned with the promise to deliver or to deliver goods, documents of title, or other things of value, either to the state or from it and by either the plaintiff or defendant. Secs. 262.05(5)(c), (d), and (e) provide:

'A court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 262.06 under any of the following circumstances:

'. . .

'(5) Local services, goods or contracts.

In any action which:

'. . .

'(c) Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff's benefit, by the defendant to deliver or receive within this state or to ship from this state goods, documents of title, or other things of value; or

'(d) Relates to goods, documents of title,...