Brown v. Birchfield Boiler Inc.

• Decision Date: 20 April 1964
• Citation: 226 Cal.App.2d 487,38 Cal.Rptr. 92
• Court: California Court of Appeals Court of Appeals
• Parties: Maynard D. BROWN and Carroll W. Cox, Plaintiffs and Appellants, v. BIRCHFIELD BOILER INC., Defendant and Respondent. Civ. 27385.

Page 92

38 Cal.Rptr. 92

226 Cal.App.2d 487

Maynard D. BROWN and Carroll W. Cox, Plaintiffs and Appellants, v. BIRCHFIELD BOILER INC., Defendant and Respondent.

Civ. 27385.

District Court of Appeal, Second District, Division 2, California.

April 20, 1964.

Hagenbaugh, Murphy, Meifert & Medearis, Van A. Hagenbaugh and John G. Davies, Los Angeles, for appellants.

Keith P. Brown, Los Angeles, for respondent.

KINCAID, Justice pro tem.

Plaintiffs herein brought this action for personal injuries allegedly sustained in this state as a result of a boiler explosion that occurred on or about September 24, 1961. The complaint alleges that the boiler in question was manufactured by Birchfield Boiler, Inc., a Washington corporation, and sold and installed by A. J. Setting doing business as A. J. Setting Company. Summons and complaint were personally served on A. J. Setting, a resident of Los Angeles County, as the alleged agent, general manager and manufacturer's representative for Birchfield.

Birchfield thereafter moved to quash service of the summons and complaint. This motion was based upon the affidavit of A. T. Davies as president of Birchfield in which he denies that Setting is the defendant Birchfield's agent, or was authorized to accept service of summons and complaint, or that the corporation ever has engaged in business in California. The motion to quash service of summons was granted and it is from this order that appeal is taken by plaintiffs.

Plaintiffs contend that the admitted activities of Birchfield in this state establish that it was 'doing business' here so as to be amenable to the service of process and that proper service was effected upon it by serving Setting. The record before us is limited to the complaint, the special appearance and notice to quash, the single affidavit by Davies, plaintiffs' interrogatories and the answers thereto of defendant.

The burden of proof is on the plaintiffs to establish that defendant was doing business in this state in the sense required to make it amenable to process here. (Holtkamp v. States Marine Corporation, et al., 165 Cal.App.2d 131, 137, 331 P.2d 679.)

The record discloses that Birchfield was at the time of filing the action herein and still is represented in the southern California area by the A. J. Setting Company as its exclusive territorial representative for the sale of its products. A. J. Setting is not a corporation but is an individual doing business under this name. In August of 1959 the business relationship was established as between them and Birchfield sent out an announcement naming Setting as its exclusive dealer-representative for the sale of high and low pressure boilers, heater exchangers, submerged heaters, tanks and tank heaters.

The Los Angeles telephone directories, both Central and Classified, carry a listing for Birchfield Boilers. The telephone number as listed for Birchfield is the same number as that listed for the A. J. Setting Company. The listed addresses of both Birchfield and Setting are the same. Also Birchfield, in the Classified directory, advertises its products and lists A. J. Setting Company as the local agent. The listings in both directories are jointly paid for by Setting and Birchfield, each paying one-half of the costs. These listings have been published in said directories continuously since September of 1959.

Mr. Davies has made frequent visits to California since 1959 and has contacted sales representatives here relative to selling the company products. He lives part of the time in California and conducts another business located in this state. Mr. Kendall, who is general manager, and Mr. Hanson, who is sales manager of Birchfield, have each recently visited California for the purpose of contacting company customers. During these periods Birchfield has paid the expenses of its officers and their salaries.

The defendant corporation has distributed its literature in this state for the apparent purpose of soliciting sales and containing the name of A. J. Setting Company as being the location of its address and telephone number. During the years 1961 and 1962 defendant paid a portion of the cost of season tickets to baseball games of the Los Angeles Dodgers purchased in the name of Setting and for the purpose of favorably affecting the sales of defendant's merchandise in this state. Birchfield has sold about $260,000 worth of its merchandise in California since January 1, 1959, for which it has billed the purchasers.

The basic questions for our determination are whether, in the light of the foregoing evidence, defendant Birchfield was doing business in this state within the sense of section 411 of the Code of Civil Procedure and, if so, whether service of the summons and complaint upon Setting was an effectual service thereof upon Birchfield. Fisher Governor Co. v. Superior Court, 53 Cal.2d 222, 224, 1 Cal.Rptr. 1, 2, 347 P.2d 1, 2, sets forth the principles to be followed in ascertaining whether a foreign corporation is doing business here as follows: 'Code of Civil Procedure, section 411, subdivision 2, authorizes service of process on foreign corporations that are 'doing business in this State.' 'That term is a descriptive one that the courts have equated with such mininum contacts with the state 'that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'' International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, . Whatever limitation it imposes is equivalent to that of the due process clause "[D]oing business' within the meaning of section 411 of the Code of Civil Procedure is synonymous with the power of the state to subject foreign corporations to local process.' [Citations.]"

In the somewhat analogous case of Cosper v. Smith & Wesson Arms Co., et al., 53 Cal.2d 77, 346 P.2d 409, the defendant successfully obtained an order quashing service of summons and complaint upon it which order was reversed on appeal. There service was made upon defendant by handing the summons and complaint to one Lookabaugh as the alleged agent, sales manager and manufacturer's representative for defendant. Although defendant, a Massachusetts corporation, denied doing business within this state, the facts were that it distributed its products from its home address through regular wholesale and dealer channels against a straight commission; that Lookabaugh Co. of California is a manufacturer's representative and promoted defendant's business in California though not on an exclusive basis and distributed general advertising matter furnished by defendant; that Lookabaugh serviced dealer accounts, investigated and recommended prospective dealers for defendant, arranged publicity, distributed advertising and handled complaints as to defe...