Banks Grocery Co. v. Kelley-Clarke Co.

• Decision Date: 27 June 1922
• Citation: 243 S.W. 879,146 Tenn. 579
• Parties: BANKS GROCERY CO. v. KELLEY-CLARKE CO.
• Court: Tennessee Supreme Court

243 S.W. 879

146 Tenn. 579

BANKS GROCERY CO. v. KELLEY-CLARKE CO.

Supreme Court of Tennessee.

June 27, 1922

Appeal from Chancery Court, Shelby County; F. H. Heiskell Chancellor.

Bill by the Banks Grocery Company against the Kelley-Clarke Company. From a decree sustaining plaintiff's demurrer, defendant appeals. Reversed and remanded.

Ewing King & King, of Memphis, for appellant.

Francis Fentress, of Memphis, for appellee.

HALL J.

The original bill in this cause was filed on September 20, 1920 by complainant, a Tennessee corporation engaged in the wholesale grocery business in Memphis, alleging that defendant, Kelley-Clarke Company, is a nonresident corporation having its home office at Seattle, in the state of Washington, and the brokerage firm of Carver & Griffith represented defendant in the distribution of its products in Memphis; that complainant, by written contract, bought 500 cases of salmon from defendant, which, upon delivery, was found to be defective and unfit for food, and on account of which a decree against defendant for $3,500 was sought.

Subp na to answer was issued to the sheriff of Shelby county as follows:

"Summons Kelley-Clarke Company (serve on Carver & Griffith, agent)."

Upon this summons the sheriff made the following return:

"Executed on Kelley-Clarke Company by reading this writ to C. N. Carver and D. L. Griffith, agents, and leaving copy of bill with D. L. Griffith."

Defendant filed a plea in abatement to the bill, in which it was averred that defendant was a corporation organized under the laws of the state of Washington, with its office and place of business in the city of Seattle, and that it had no corporate existence under the laws of Tennessee; that it had no agent in Shelby county; that neither C. N. Carver nor D. L. Griffith was its agent; that it had no office or agency in Tennessee, and that it was not doing business in said state in any way or manner; that the sale of goods alleged in the bill was made in the state of Washington, and not made in the state of Tennessee; and that all matters alleged in the bill pertaining to said contract of sale occurred outside of the state of Tennessee.

Complainant joined issue upon this plea, but subsequently, and before any action had been taken by the court upon said plea, complainant, by leave of the court, filed an amended and supplemental bill, seeking to proceed against defendant under chapter 226 of the Acts of 1887. This amended bill alleged as follows:

"For many years Carver & Griffith have represented the defendant in Memphis, Tenn., and, while not authorized generally to make contracts on behalf of Kelley-Clarke Company, the system of business pursued is as follows: The defendant will keep Carver & Griffith posted from time to time on the market price at which it will sell goods the defendant has to sell, and when an offer is made to Carver & Griffith by a jobber, it is understood and known that Carver & Griffith will transmit by wire that offer to Kelley-Clarke Company, and if Kelley-Clarke Company are willing to accept the offer the transaction is consummated by Carver & Griffith notifying the prospective buyer of the particular commodity that his offer is accepted. Frequently, on behalf of Kelley-Clarke Company, the said Carver & Griffith will obtain jobber's offers and transmit same to Kelley-Clarke Company, with the name of the offerer, and if that offer is accepted the offerer is so notified and the transaction consummated.

Kelley-Clarke Company send out from time to time what they term a statistical circular or letter, and this is addressed by Kelley-Clarke Company 'to our brokers,' and invariably such a circular is sent to Carver & Griffith, addressed as a broker." A subp na to answer this amended bill was issued and directed to the sheriff, commanding him to summons C. N. Carver and D. L. Griffith to answer the same.

The sheriff made the following return:

"Executed by reading the subp na to answer to both C. N. Carver and D. L. Griffith, members of the firm of Carver & Griffith, and by leaving with them a copy of the amended and supplemental bill. Said service is had upon Kelley-Clarke Company as above, because of the averment that Carver & Griffith represented the defendant corporation at the time the transaction out of which the suit arises took place."

The clerk and master certified that he sent, by registered mail, a copy of the original, amended, and supplemental bills and process, with returns on same, to defendant at Seattle, Wash., and that he made a minute entry of same on the docket of the court.

George H. King made an affidavit, before a notary public at Seattle, that at the request of complainant he had lodged with the highest officer of defendant to be found a copy of a notice which he attached to his affidavit, and a copy of the process issued and returned by the sheriff. This notice, addressed to defendant, advises it of the bringing of suit against it by complainant in the chancery court of Shelby county, Tenn., and states that certified copies of the original and amended and supplemental bills are handed to it, and copies of process issued and returns thereon. The notice states that these documents were furnished by virtue of chapter 226, Acts of 1887; in fact, it is not questioned by defendant that chapter 226, Acts of 1887, was strictly complied with.

Defendant filed a plea in abatement to this amended bill, challenging the jurisdiction of the court upon the ground that it was a foreign corporation created under the laws of the state of Washington; that its domicile or place of business was in Seattle, in that state, and that it had neither an agent nor property in Tennessee at the time of the sale, or at the time of the institution of this suit; and that the sale was made in the state of Washington, and not in Tennessee. It also stated that Carver & Griffith were merchandise brokers in Memphis, and were not generally in defendant's employ, and in the alleged sale to complainant they represented defendant as brokers, and for their services in procuring the order of sale they were paid a brokerage or commission for the specific order of sale obtained. The plea also denied that Carver & Griffith were authorized as a matter of law to accept service for defendant, and likewise denied that defendant was doing business in Tennessee.

The written contract of sale was attached to and made a part of the plea in abatement. The plea was subsequently amended by agreement of counsel by adding a paragraph to same, in which it was averred that the claimed service under the amended and supplemental bill, by again serving process upon Carver & Griffith, and by sending certified copies of the pleadings and process through the mail to defendant by the clerk and master, and the delivery of like copies and notice of suit to ...