Cannon Mfg Co v. Cudahy Packing Co

Decision Date02 March 1925
Docket NumberNo. 255,255
Citation69 L.Ed. 634,267 U.S. 333,45 S.Ct. 250
CourtU.S. Supreme Court

Massrs. C. W. Tillett, Jr., and Thomas C. Guthrie, both of Charlotte, N. C., for plaintiff in error.

Mr. J. Harry Covington, of Washington, D. C., for defendant in error.

Mr. Justice BRANDEIS delivered the opinion of the Court.

Cannon Manufacturing Company, a North Carolina corporation, brought, in a court of that state, this action against Cudahy Packing Company, a Maine corporation, for breach of a contract to purchase cotton sheeting for use in packing meat. The defendant appeared specially for the purpose of filing a petition for removal to the federal court for western North Carolina; and the order of removal issued. In that court the defendant, appearing specially, moved that the summons be set aside and the action dismissed for lack of jurisdiction. The ground of the motion was that the defendant was not doing business within the state and had not been served with process. The only service made was, as the sheriff's return recites, the delivery of a copy of the 'summons and complaint to Cudahy Packing Company of Alabama, agent of defendant, Frank H. Ross, to whom papers were delivered, being process agent of Cudahy Company of Alabama.' The District Court, concluding upon the evidence that the defendant was not present in North Carolina, entered a final judgment dismissing the action. 292 F. 169. The case is here under section 238 of the Judicial Code (Comp. St. § 1215), the question of jurisdiction having been duly certified.

The main question for decision is whether, at the time of the service of process, defendant was doing business within the state in such a manner and to such an extent as to warrant the inference that it was present there. Bank of America v. Whitney Central National Bank, 261 U. S. 171, 43 S. Ct. 311, 67 L. Ed. 594. In order to show that it was, the plaintiff undertook to establish identity pro hac vice between the defendant and the Alabama corporation. The Alabama corporation, which has an office in North Carolina, is the instrumentality employed to market Cudahy products within the state; but it does not do so as defendant's agent. It buys from the defendant and sells to dealers. In fulfillment of such contracts to sell, goods packed by the defendant in Iowa are shipped direct to dealers, and from them the Alabama corporation collects the purchase price. Through ownership of the entire capital stock and otherwise, the defendant dominates the Alabama corporation, immediately and completely, and exertsits control both commercially and financially in substantially the same way, and mainly through the same individuals, as it does over those selling branches or departments of its business not separately incorporated which are established to market the Cudahy products in other states. The existence of the Alabama company as a distinct corporate entity is, however, in all respects observed. Its books are kept separate. All transactions between the two corporations are represented by appropriate entries in their respective books in the same way as if the two were wholly independent corporations. This corporate separation from the general Cudahy business was doubtless adopted solely to secure to the defendant some advantage under the local laws.

The objection to the maintenance of the suit is not procedural—as where it is sought to defeat a suit against a foreign corporation on the ground that process has been served upon one not authorized to act as its agent. Pennsylvania Lumbermen's Mutual Fire Insurance Co. v. Meyer, 197 U. S. 407, 25 S. Ct. 483, 49 L. Ed. 810; St. Louis Southwestern Ry. Co. v. Alexander, 227 U. S. 218, 226, 33 S. Ct. 245, 57 L. Ed. 486, Ann. Cas. 1915B, 77. See Philadelphia & Reading Ry. Co. v. McKibbin, 243 U. S. 264, 37 S. Ct. 280, 61 L. Ed. 710. The obstacle insisted upon is that the court lacked jurisdiction because the defendant, a foreign corporation, was not within the state. No question of the constitutional powers of the state, or of the federal government, is directly presented. The claim that jurisdiction exists is not rested upon the provisions of any state statute or upon any local practice dealing with the subject. The resistance to the assumption of jurisdiction is not urged on the ground that to subject the defendant to suit in North Carolina would be an illegal interference with interstate commerce. Compare International Harvester Co. v. Kentucky, 234 U. S. 579, 587-589, 34 S. Ct. 944, 58 L. Ed....

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