Carmichael v. Snyder

• Citation: 209 Va. 451, 164 S.E.2d 703
• Case Date: December 06, 1968
• Court: Supreme Court of Virginia

Page 703

164 S.E.2d 703 209 Va. 451 John H. CARMICHAEL et al.
v.
Joseph C. SNYDER. Supreme Court of Appeals of Virginia. Dec. 6, 1968.

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John M. Court, Phelps & Atkinson, Newport News, on brief, for plaintiffs in error.

Sidney Sacks, Lewis, Sacks & DeLaura, Norfolk, on brief, for defendant in error.

Before EGGLESTON, C.J., and BUCHANAN, SNEAD, I'ANSON, CARRICO, GORDON and HARRISON, JJ.

[209 Va. 452] HARRISON, Justice.

The primary question involved here is the jurisdiction of the court below over the defendant under the provisions of the state's 'Long-Arm Statute', having particular reference to subsections (1) and (6) of § 8--81.2(a) of the Code of Virginia 1968 Cum.Supp.

On March 9, 1967, John H. and Gordon E. Carmichael, plaintiffs, filed in the court below a motion for judgment against defendant, Joseph C. Snyder, a resident of New London, Connecticut, for damages allegedly sustained by plaintiffs as a direct result of the refusal of defendant to perform a contract for the purchase of real estate.

The motion alleges that on May 6, 1966, defendant contracted in writing, in Norfolk, Virginia, to purchase from plaintiffs for $26,500 property located in that city, identified as 4201 Gosnold Avenue, and to make settlement by July 1, 1966; that defendant refused to perform his agreement, and soon after July 1, 1966 moved from Virginia to Connecticut; and that plaintiffs, after mitigating their damages by a sale of the property to another person, incurred the loss which they seek to recover in this action.

Process against Snyder was served on the Secretary of the Commonwealth of Virginia. Defendant filed a motion to quash the service, wherein he denied and put in issue the jurisdiction and venue of the lower court and the right of the court to enter a personal judgment against him, a non-resident of the state. Plaintiffs responded with a motion to strike defendant's motion to quash. The trial court sustained

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defendant's motion, and the validity of that ruling is before us on this writ of error.

We have no difficulty in finding that, if the trial court had the right to exercise personal jurisdiction over defendant under the 'Long-Arm Statute', service of process on the Secretary of the Commonwealth, as his statutory agent, was authorized by Code § 8--81.3; and that the action was properly brought in the City of Norfolk where the plaintiffs reside and the cause of action arose. Code § 8--81.4.

Chapter 4.1, Title 8 of the Code of Virginia treats of personal jurisdiction in certain actions. It defines persons as including '* * * an individual * * * whether or not a citizen or domiciliary of this state * * *' (Code § 8--81.1), and provides when personal jurisdiction over a person may be exercised. Plaintiffs claim jurisdiction over defendant here by virtue of two subsections of Code § 8--81.2 as follows:

'(a) A court may exercise personal jurisdiction over a person, who [209 Va. 453] acts directly or by an agent, as to a cause of action arising from the person's

'(1) Transacting any business in this state;

'(6) Having an interest in, using, or possessing real property in this State; * * *.'

Since Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877), the Supreme Court of the United States has held that the Due Process Clause of the Fourteenth Amendment places some limit on the power of state courts to enter binding judgments against persons not served with process within their boundaries. The line of limitation has been the subject of great controversy and the doctrine there enunciated has undergone a continued process of evolution.

For a review of the numerous opinions reflecting the trend toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents, see State ex rel. Coral Pools v. Knapp, 147 W.Va. 704, 131 S.E.2d 81 (1963); Grobark v. Addo Machine Company, 16 Ill.2d 426, 158 N.E.2d 73 (1959); Beaty v. M. S. Steel Co., 276 F.Supp. 259 (D.Md.1967); Etzler v. Dille and McGuire Manufacturing Company, 249 F.Supp. 1 (W.D.Va.1965); Walke v. Dallas, 209 Va. 32, 161 S.E.2d 722 (1968).

In International Shoe Company v. State of Washington, etc., 326 U.S. 310, 316, 319, 66 S.Ct. 154, 158, 160, 90 L.Ed. 95 (1945), the court made these pertinent observations:

'Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. (Citing case.) But now that the capias ad respondendum has given way to personal service of summons or other form of notice, 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.' (Citing cases.)'

'Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due [209 Va. 454] process clause to insure. That clause does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations.' (Citing cases.)

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In McGee v. International Life Insurance Co., 355 U.S. 220, 222, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957), the court said:

'Looking back over this long history of litigation a trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents. In part this is attributable to the fundamental transformation of our national economy over the years. Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.'

That case involved an action on an insurance contract issued by a foreign corporation to a resident of California and the court said that it was...