Canvas Fabricators v. William E. Hooper & Sons Co.

• Decision Date: 27 October 1952
• Docket Number: No. 10633.,10633.
• Parties: CANVAS FABRICATORS, Inc. v. WILLIAM E. HOOPER & SONS CO.
• Court: U.S. Court of Appeals — Seventh Circuit

199 F.2d 485 (1952)

CANVAS FABRICATORS, Inc. v. WILLIAM E. HOOPER & SONS CO.

No. 10633.

United States Court of Appeals Seventh Circuit.

October 27, 1952.

Leonard J. Braver, Silverstein & Stein, Chicago, Ill., for appellant.

Cushman B. Bissell, Stephen A. Milwid, Lord, Bissell & Kadyk, Chicago, Ill., for appellee.

Before MAJOR, Chief Judge, and FINNEGAN and SWAIM, Circuit Judges.

MAJOR, Chief Judge.

Plaintiff, an Illinois corporation, filed its complaint in the District Court against the defendant, an alleged Pennsylvania corporation, seeking damages for an alleged breach of contract pertaining to purported sales of merchandise by the defendant to the plaintiff. Jurisdiction was claimed by reason of diversity of citizenship, with the requisite jurisdictional amount.

The United States Marshal by his return disclosed that service of summons was had upon the defendant by serving a writ together with a copy of the complaint upon the defendant corporation, "by delivering copies thereof to Charles A. Kite, Western Mgr., an agent of said corporation, this 17 day of December A. D., 1951." The return also stated, "The president of said corporation not found in my district."

The defendant appeared specially for the sole and only purpose of making its motion to "question the jurisdiction of the court over its person" and moved the court to set aside and quash the supposed service of summons. The motion alleged, among other things, that the defendant was a corporation organized and existing under the laws of the State of Maryland, with its plant or factory located at Baltimore, Maryland, and with its executive offices and principal place of business located at Philadelphia, Pennsylvania; that the defendant had never been a corporation organized under the laws of the State of Illinois or a resident of that State and had never been licensed or qualified to do business in that State; that it had never appointed or authorized any agent to accept service or process for it in any suit in that State, and that the defendant at the time of the supposed service of summons in the instant case was not found within such State. The motion further alleged that Charles A. Kite, mentioned in the Marshal's return, had authority only to solicit business and orders on behalf of the defendant; that all orders taken by him were subject to the approval of the defendant at its principal place of business, and that all goods shipped or delivered on all orders accepted by the defendant were shipped by it from Baltimore on an FOB basis only.

Upon such motion, the court entered an order quashing the service of summons and dismissed plaintiff's complaint. From this order plaintiff has appealed.

The primary contested issue is whether defendant was "doing business" in the State of Illinois so as to be amenable to local process. A procedural question raised by the plaintiff will be subsequently referred to. This being a diversity case, it can hardly be doubted but that the main question for decision is controlled by local law. Woods v. Interstate Realty Co., 337 U.S. 535, 69 S.Ct. 1235, 93 L.Ed. 1524; Pulson v. American Rolling Mill Co., 1 Cir., 170 F.2d 193; Kelley v. Delaware L. & W. R. Co., 1 Cir., 170 F.2d 195.

We need not labor this point because it is not only sustained by the cases but it is conceded by plaintiff.

Defendant, in support of its motion attacking the jurisdiction of the court, submitted the affidavit of Charles A. Kite. Plaintiff answered said motion and, in support thereof, submitted the affidavit of its president, Frank Piezak. Thereupon, defendant submitted a counter-affidavit by its secretary, S. C. Stubbs, of its Philadelphia office. The decision of the District Court was predicated upon the pleadings and such affidavits.

A reading of the pleadings, together with the affidavits, is convincing that when stripped of their conclusions there is little, if any, dispute as to the evidentiary facts. Briefly, they are that defendant for many years had maintained an office in the City of Chicago; that the defendant's name appeared on the office door, its name was listed in the Chicago telephone directory; that it maintained a bank account in Chicago in which two of plaintiff's checks had been deposited in payment for merchandise, and that Kite used stationery and letterheads bearing the company name and the Chicago office address. The facts further reveal that the facilities referred to are used only by Kite in the solicitation of interstate business for the defendant; that no contracts were entered into in Illinois; that all purchase orders, including those of the plaintiff, were solicited by Kite and forwarded by him to the defendant at its Philadelphia office, where they were either accepted or rejected. The facts further disclose that all shipments were made FOB mills, Baltimore. Defendant's Chicago bank account was maintained solely for the purpose of paying salaries of stenographic help, stationery, supplies and other minor expenses required to maintain the Chicago office. There were two occasions when Kite deposited in such bank account checks received from ...