Aldridge v. Marco Chemical Co.

• Decision Date: 30 April 1962
• Docket Number: No. 5-2679,5-2679
• Citation: 234 Ark. 1080,356 S.W.2d 615
• Parties: Ida Mae ALDRIDGE et al., Appellants, v. MARCO CHEMICAL CO., Appellee.
• Court: Arkansas Supreme Court

Page 615

356 S.W.2d 615

234 Ark. 1080

Ida Mae ALDRIDGE et al., Appellants, v. MARCO CHEMICAL CO., Appellee.

No. 5-2679.

Supreme Court of Arkansas.

April 30, 1962.

Oliver M. Clegg, for Keith, Clegg & Eckert, Magnolia, for appellants.

Rose, Meek, House, Barron, Nash & Williamson, by J. W. Barron, Little Rock, for appellee.

HARRIS, Chief Justice.

The sole question in this litigation is whether appellee is amenable to service under the provisions of Section 27-340, Ark.Stats. (1947), or to state it differently, did the Columbia County Circuit Court acquire jurisdiction over Marco Chemical Company, a foreign corporation, by virtue of service obtained under the authority of that section? Section 27-340 provides as follows:

'Any non-resident person, firm, partnership, general or limited, or any corporation not qualified under the Constitution, and Laws of this State as to doing business herein, who shall do any business or perform any character of work or service in this State shall, by the doing of such business or the performing of such work, or services, be deemed to have appointed the Secretary of State, or his successor or successors in office, to be the true and lawful attorney or agent of such non-resident, upon whom process may be served in any action accrued or accruing from the doing of such business, or the performing of such work, or service, or as an incident thereto by any such non-resident, or his, its or their agent, servant or employee. Service of such process shall be made by serving a copy of the process on the said Secretary of State, and such service shall be sufficient service upon the said non-resident of the State of Arkansas, provided that notice of such service and a copy of the process are forthwith sent by registered mail by the plaintiff, or his attorney, to the defendant at his last known address, and the defendant's written return receipt, or the affidavit of the plaintiff, or his attorney, of compliance herewith are appended to the writ or process and entered in the office of the Clerk of the court wherein said cause is brought. * * *'

Appellants, engaged in poultry raising and egg producing, instituted suit against appellee, alleging, inter alia:

'That each of the undersigned obtained from Ark-La Feed and Fertilizer Company of Magnolia, Arkansas, by purchase or otherwise, during the period from January 30, 1958, to about June 1, 1958, poultry feed containing a substance manufactured and sold by the defendant to the said Ark-La, and known as Marcol B-75; that said Marcol B-75 was a vegetable oil fat sold and delivered by the defendant to the said Ark-La for the purpose of mixing the same with other ingredients into poultry feed; that the said Ark-La used, combined and incorporated Marcol B-75 in the same form in which it was received from and delivered by defendant with other ingredients in the manufacture of its poultry feed in the manner recommended by the defendant.

'That upon consuming feed containing said Marcol B-75, sold and delivered by defendant to Ark-La on and after January 28, 1958, poultry belonging to plaintiffs became sick in large numbers; that said sickness was identified as 'Disease X' or 'Water Belly'; * * * that large numbers of poultry died, that large numbers were condemned as unfit for human consumption by the United States Department of Agriculture inspectors; that large numbers were otherwise affected so as to cause great loss of weight and productivity as layers or breeders.

'Plaintiffs are informed and believe, and upon such information and belief, allege that said Marcol B-75 contained a dangerous and deleterious substance or injurious element at the time it was sold and delivered by defendant, so that it was not fit to be combined with other ingredients in poultry feed, * * *.

'* * * as a result of eating the feed above described, large numbers of poultry belonging to plaintiffs died and that such deaths resulted from poison contained in the feed delivered to these plaintiffs by Ark-La; that such feed was poisonous in that it contained foreign and deleterious substances which were in the fat furnished Ark-La by the defendant, Marco Chemical Company; * * *.'

Various counts of alleged negligence on the part of appellee were recited in the complaint, and appellants sought judgment in the amount of $9,950.63. Service was had upon the Secretary of State as agent for service of Marco Chemical Company, and appellee was notified as provided in Section 27-340. Thereafter, the Company filed its motion to quash the process issued, and to dismiss the complaint, for the reason that it was a foreign corporation, and had not been authorized to transact business intrastate in Arkansas, and had not designated an agent within the State upon whom process could be served.

'At no time material hereto, has it done any business or performed any character of work or services in the State of Arkansas, nor is it now doing so. * * *

'The said Secretary of State is not now and never has been an agent of this defendant upon whom process may be served for it. This Court does not have jurisdiction over the person of this defendant and cannot obtain such jurisdiction by virtue of the purported service as aforesaid. * * * 'Assumption by this Court of jurisdiction over the person of the defendant Marco Chemical Company by virtue of the summons issued herein and the purported service thereof as alleged in paragraphs 2 and 3 hereof would be to deny said defendant due process of law in violation of the Fourteenth Amendment to the Constitution of the United States and would violate Article [1, § 8] VIII, Sec. 3, of the Constitution of the United States, giving to the Congress of the United States the power to regulate the commerce among the several states.'

On hearing, the court held that the motion to quash should be sustained, and upon appellants' announcing that they elected to stand upon the service of process had, the court dismissed the complaint. From the judgment so entered, appellants bring this appeal.

According to a stipulation entered into between the parties, appellee, Marco Chemical Company, is a foreign corporation, organized and existing under the laws of the state of Texas. It has not qualified to transact business in Arkansas. The company is principally engaged in selling animal feeds and ingredients therefor, and does not now have, nor has it ever had or maintained in the state of Arkansas any office, warehouse, or place of business whatsoever. Nor has it ever maintained within this state any physical facilities or any stock or merchandise. The company has no bank account within this state, and no salesmen or representatives who reside in Arkansas. Dealings with Ark-La Feed & Fertilizer Company have been handled, according to the stipulation, in the following manner:

'Orders for its products from Ark-La Feed & Fertilizer Company were either sent by mail addressed to it at its office in Fort Worth, Texas, or were telephoned to it at its said office in Fort Worth. After the order was accepted the sales confirmation was mailed by defendant from Ft. Worth, Texas, to Ark-La Feed & Fertilizer Company in Magnolia, Arkansas. Prices on products other than B-75 were quoted on a basis of delivered Magnolia. The price of B-75 was FOB Fort Worth. Payment was accomplished either by the drawing and depositing of a draft in Ft. Worth, Texas, by appellee on Ark-La Feed & Fertilizer, or as an alternative, Ark-La Feed & Fertilizer Company usually mailed to Marco at Ft. Worth, its check in payment of its account. Delivery was accomplished by appellee's own trucks and drivers, but the drivers did not make any collections for Marco, nor receive for appellee the purchase price for merchandise delivered, or any part thereof, nor did they have any authority to do so. All deliveries were made from Fort Worth, Texas, to Ark-La at Magnolia, Arkansas. * * *

(2)

'It was customary for the driver of the appellee's truck to unload B-75 by means of a pump which was driven by the truck engine so that the product was pumped through a hose or pipes into the receiving tanks of Ark-La Feed & Fertilizer Company.

(3)

'At all material times appellee has had business relations with customers in Fayetteville, Springdale, Fort Smith, Rogers, Little Rock, Blytheville, Chatfield, and Hughes, all in Arkansas, and all of which were handled and accomplished in the same manner as its dealing with Ark-La Feed & Fertilizer Company as set out above.

(4)

'Appellee mailed from its office in Fort Worth, Texas, to Ark-La Feed & Fertilizer Company a copy of a drawing showing a proposed layout of pipes and tanks for receiving B-75 (5)

'Appellee solicited Ark-La Feed & Fertilizer Company to buy B-75 by mail, telephone, and in person, but no orders were taken by appellee at Magnolia, Arkansas. Appellee furnished Ark-La with literature designed to show the merits of B-75, which literature was published by institutions or representatives of institutions not connected with appellee. This solicitation was in 1956 because of the first delivery of B-75 to Ark-La Feed & Fertilizer Company was on January 28, 1957. Subsequent to January, 1957, a representative of appellee called upon Ark-La Feed & Fertilizer Company on several occasions in the interest of good will and good customer relations. No orders were taken on any of these visits.'

Appellee vigorously contends tat everything done was in interstate commerce; that its activities do not subject it to service of process as provided in Section 27-340, and, in support of the position taken, relies mainly upon our holding in Rodgers v. Howard, Judge, 215 Ark. 43, 219 S.W.2d 240, the opinion being delivered on April 4, 1949. As a matter of background (which we deem essential to a proper understanding of the issue involved), it should first be pointed out that the United States Supreme Court in International Shoe Company v. State of Washington et al., 326 U.S. 310, 66 S.Ct....