American Type Founders Co. v. Mueller Color Plate Co., Civ. A. No. 57-C-41.

• Decision Date: 24 March 1959
• Docket Number: Civ. A. No. 57-C-41.
• Parties: AMERICAN TYPE FOUNDERS CO., Inc., a Delaware corporation, Plaintiff, v. MUELLER COLOR PLATE COMPANY, a Wisconsin corporation, Defendant, and Elmora Corporation, a New Jersey corporation, Impleaded Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

171 F. Supp. 249

AMERICAN TYPE FOUNDERS CO., Inc., a Delaware corporation, Plaintiff, v. MUELLER COLOR PLATE COMPANY, a Wisconsin corporation, Defendant, and Elmora Corporation, a New Jersey corporation, Impleaded Defendant.

Civ. A. No. 57-C-41.

United States District Court E. D. Wisconsin.

March 24, 1959.

Laurence E. Gooding, Jr., and Charles S. Quarles of Quarles, Herriott & Clemons, Milwaukee, Wis., for plaintiff.

Robert P. Harland of Whyte, Hirschboeck, Minahan, Harding & Harland, Milwaukee, Wis., for defendant.

George M. Chester of Fairchild, Foley & Sammond, Milwaukee, Wis., for impleaded defendant.

GRUBB, District Judge.

Plaintiff, American Type Founders Co., Inc., a Delaware corporation, brought this action against Mueller Color Plate Company, a Wisconsin corporation (hereinafter called "Mueller"), for an amount allegedly owing on a contract and promissory note. Defendant Mueller counterclaimed against the plaintiff for breach of contract and warranty. Plaintiff filed a cross-complaint against the impleaded defendant, Elmora Corporation, a New Jersey corporation (hereinafter called "Elmora"), claiming that if plaintiff is liable to defendant Mueller on the counterclaim, or if plaintiff cannot collect on the contract and note in the principal action, then it has a right of indemnification against the impleaded defendant Elmora.

The action is now before this court on Elmora's motion to dismiss the cross-complaint or, in lieu thereof, to quash the return of service upon Elmora on the ground that this court does not have jurisdiction over the impleaded defendant because plaintiff's cause of action did not arise out of impleaded defendant's doing business in Wisconsin.

On December 4, 1953, Elmora, then known as American Type Founders, Inc., entered into a contract with Mueller for the sale of certain engraving and printing equipment, f. o. b. seller's factory at Mt. Vernon, New York, or Elizabeth, New Jersey. This contract was at least in part solicited in Wisconsin and executed and delivered in New Jersey. It expressly stated that it was to be governed by the laws of New Jersey.

Under the agreement American Type Founders, Inc., furnished plans and the supervisory services of one erection mechanic to supervise the installation of the equipment in Wisconsin, a phototechnician for two weeks to instruct personnel in the operation of the equipment, and three employees to perform work on the equipment.

American Type Founders, Inc., took a conditional sales contract which it filed with the Register of Deeds, Milwaukee County, Wisconsin. American Type Founders, Inc., was licensed to do business in Wisconsin during the period from prior to December 4, 1953 until February 16, 1956, when it was granted a certificate of withdrawal.

In 1955 American Type Founders, Inc., transferred all its commercial business to Messrs. Jay Levine and David Berdon, plaintiff's predecessors in interest. All right, title, and interest of Messrs. Levine and Berdon under that contract was subsequently transferred to plaintiff corporation, including the contract herein sued upon.

The question now before the court is whether Elmora's activities amount to "doing business" under the Federal and Wisconsin Statutes interpreted in the light of the Fourteenth Amendment.

The pertinent rules and statutes involved are:

Rules 4(d) (3) and (7), F.R.Civ.P. 28 U.S.C.A.

Section 262.09(4) of the Wisconsin Statutes relating to service of process, which provides in part that if the defendant is a foreign corporation and the cause of action against it arose out of the doing business in Wisconsin, service may be made in accordance with the provisions of Section 180.825.

Section 180.825 of the Wisconsin Statutes relating to the method of service on a foreign corporation. Subsection (3) provides that service can be made upon a foreign corporation only in any action or proceedings arising out of or relating to any business transacted or property acquired, held, or disposed of by such foreign corporation within the State.

Section 180.837 of the Wisconsin Statutes provides that a foreign corporation which had been licensed in Wisconsin might withdraw from the State. In doing so it must authorize service to be made on it by service on the Secretary of State with respect to any suit based upon any cause of action arising in the State during the time it was authorized to transact business here.

This court has construed the Wisconsin Statutes with respect to service on foreign corporations as broad enough to cover transacting business situations permissible within the confines of due process. Ludwig v. General Binding Corp., D.C.E.D.Wis.1957, 21 F.R.D. 178.

In Huck v. Chicago, St. P., M. & O. R. Co., 1958, 4 Wis.2d 132, 137, 90 N.W.2d 154, 157, the Wisconsin Supreme Court stated:

"We have no hesitancy in holding that the objective of the statute was to give citizens of Wisconsin the right to make use of the courts of this state in instituting causes of action against any foreign corporation, which actually is carrying on business activities within the state, subject only to such limitations as are imposed by the United States constitution. We feel certain that neither the Judicial Council in proposing the changed wording of sec. 262.09(4), Stats., nor this court in promulgating the same, had any intention to hamstring such right by adopting into such subsection any definitions of `doing business' laid down in past court decisions, which definitions contained limitations which mistakenly were assumed to be required by the United States constitution."

In International Shoe Co. v. State of Washington, 1945, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, the Court decided that:

"* * * 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.'"

Subsequently, in McGee v. International Life Ins. Co., 1957, 355 U.S. 220, 78 S.Ct. 199, 201, 2 L.Ed.2d 223, the Court upheld a California judgment rendered against a Texas insurance company whose only contacts with the State of the forum were the mailing of a reinsurance certificate to a California resident offering to insure him in accordance with an earlier policy and his acceptance and payment of the premiums by mail until his death.

The Court stated:

"It is sufficient for purposes of due process that the suit was based on a contract

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