Collins v. New York Central System

• Citation: 327 F.2d 880
• Decision Date: 19 December 1963
• Docket Number: No. 17563.,17563.
• Parties: Oscar F. COLLINS et al., Appellants, v. NEW YORK CENTRAL SYSTEM, A Body Corporate, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

327 F.2d 880 (1963)

Oscar F. COLLINS et al., Appellants, v. NEW YORK CENTRAL SYSTEM, A Body Corporate, Appellee.

No. 17563.

United States Court of Appeals District of Columbia Circuit.

Argued November 4, 1963.

Decided December 19, 1963.

Mr. Joseph H. Koonz, Jr., Washington, D. C., with whom Messrs. Martin E. Gerel and Lee C. Ashcraft, Washington, D. C., were on the brief, for appellants.

Mr. Charles R. Richey, Washington, D. C., for appellee.

Before EDGERTON, Senior Circuit Judge, and WILBUR K. MILLER and FAHY, Circuit Judges.

FAHY, Circuit Judge.

Appellants, husband and wife, residents of Virginia, filed suit in our District Court against the appellee New York Central System, a foreign corporation, claiming damages for personal injuries to the husband, and loss to the wife of consortium, services and companionship, alleged to have resulted from an accident to the husband in the State of New York due to appellee's negligence. Service was made on the chief clerk of appellee at its offices in the Shoreham Building in this City. Appellee moved to dismiss the complaint and quash the service on the ground appellee was not authorized to transact business in and was not doing business in the District of Columbia. Appellee filed a supporting affidavit devoted to the nature of its activities in this jurisdiction. Promptly thereafter appellants moved for a continuance of the hearing on the motion to dismiss to allow discovery to be obtained on the basis of interrogatories directed to appellee under Rule 33, Fed. R.Civ.P. The District Court granted appellee's motion to dismiss without benefit of answers to the interrogatories.

Appellants rely upon the first paragraph of 13 D.C.Code § 103 to support the service:

"In actions against foreign corporations doing business in the District all process may be served on the agent of such corporation or person conducting its business, or, in case he is absent and can not be found, by leaving a copy at the principal place of business in the District, or, if there be no such place of business, by leaving the same at the place of business or residence of such agent in said District, and such service shall be effectual to bring the corporation before the court."¹

Since appellee does have a place of business in this jurisdiction, service upon it does not depend upon the tort having been committed in the District of Columbia if appellee was "doing business" here within the meaning of the first paragraph of Section 103.

The question whether appellee was "doing business" in the District of Columbia within the meaning of this section of course turns upon the facts. Appellee's affidavit contains a conclusionary statement that it did not have authority to transact business here. This, however, does not answer the question whether it was, in fact, doing business here, which is an issue of a combined factual and legal nature to be decided by the court. The affidavit also averred inter alia that the sole function of appellee's office here was to solicit traffic "largely from the Federal Government," the traffic to be moved over transportation lines located entirely outside the District of Columbia, that with respect to such traffic all financial matters were conducted outside the District of Columbia, and that appellee did not execute contracts, perform executive duties or approve or adjust or negotiate claims in this District. The interrogatories were designed to draw out more detailed information, including the title and duties of every employee of appellee in its office here, whether any of its employees had authority to accept orders from any source, governmental or otherwise, and the function of the freight department located in the Shoreham Building.

In Mueller Brass Co. v. Alexander Milburn Co., 80 U.S.App.D.C. 274, 152 F.2d 142 (1945), corporate activities consisting almost entirely of maintaining contact with government agencies, coupled with some solicitation of orders, were held not "doing business" within the Code provision; and of similar tenor is Cancelmo v. Seaboard Air Line Ry., 56 App.D.C. 225, 12 F.2d 166 (1926); and see Traher v. De Havilland Aircraft of Canada, Ltd., 111 U.S.App.D.C. 33, 294 F.2d 229 (1961), cert. denied, 368 U.S. 954, 82 S.Ct. 397, 7 L.Ed.2d 387 (1962). However, in Fiat Motor Co. v. Alabama Imported Cars, Inc., 110 U.S.App.D.C. 252, 292 F.2d 745, cert. denied, 368 U.S. 898, 82 S.Ct. 175, 7 L.Ed.2d 94 (1961), and Mutual International Export Co. v. Napco Industries, Inc., 114 U.S.App.D.C. 392, 316 F.2d 393 (1963), service in this jurisdiction was sustained, the court holding the foreign corporate defendants were "doing business" here, though it should be added that in the latter case the alleged tort also occurred here; and in Frene v. Louisville Cement Co., 77 U.S.App.D.C. 129, 134, 134 F.2d 511, 516, 146 A.L.R. 926 (1943), where the subject is treated extensively, the court said, "Solicitation plus maintaining an office is sufficient," a statement difficult to reconcile with the later holding in the Mueller Brass Co. case.

The cases referred to, without more, show the difficulty in drawing the line between doing and not doing business and the consequent need of the court to be informed of the facts before deciding the issue. Appellee's affidavit clearly implies that traffic is solicited, whether substantially is not disclosed, from others than the Federal Government. Moreover, nowhere does it unequivocally aver that the activities of its office in the Shoreham Building are its only activities in this jurisdiction.² Further information is necessary to determine whether solicitation is substantial and whether other activities, if any, are merely incidental to it or of greater significance. Appellants' interrogatories sought fuller disclosure in this as well as in other respects.

Action on the motion to dismiss should have awaited answers to the interrogatories, except as the interrogatories might be subject to valid objection.³ Urquhart v. American-La France Foamite Corp., 79 U.S.App.D.C. 219, 144 F.2d 542, cert. denied, 323 U.S. 783, 65 S.Ct. 273, 89 L.Ed. 625 (1944). They were propounded under Rule 33 of the Federal Rules of Civil Procedure. This Rule provides for written interrogatories to be answered by an adverse party. If such party is a corporation the answers shall be by any officer or agent of the corporation. The Rule also provides that the interrogatories may relate to any matter which can be inquired into under Rule 26(b) and that the answers may be used to the same extent Rule 26(d) provides for the use of a deposition. Rule 26(d) (2) provides that the deposition of an officer or agent of a corporation may be used by an adverse party for any purpose. This covers our case. Moreover, Rule 26(a) provides that any party may take testimony by discovery. Referring to Rule 26(a) this court in Urquhart, 79 U.S.App.D.C. at 221, 144 F.2d at 544, said, in language equally applicable to this case, that the correct interpretation of the Rule is found in Moore's Federal Practice (1938) 2467, 2468, as follows:

"Where the defendant serves in advance of answer a motion to dismiss under Rule 12(b), such as a foreign corporation moving to dismiss on the ground of the insufficiency of service of process, it would seem that the court should ordinarily grant leave to the plaintiff to take depositions on the issues of fact, if any, raised by the motion, such as matters relating to the question whether the foreign corporation is doing business in the state * *."

Jiffy Lubricator Co. v. Alemite Co., 28 F.Supp. 385 (D.C.N.D.1939) is cited in support. And see General Indus. Co. v. Birmingham Sound Reproducers Ltd., 26 F.R.D. 559 (E.D.N.Y.1961); 4 Moore, Federal Practice 2302 (2d ed. 1963).

Reversed and remanded for further proceedings consistent with this opinion.

WILBUR K. MILLER, Circuit Judge (dissenting).

As partially pointed out in the majority opinion, this suit was filed July 27, 1962, in the United States District Court for the District of Columbia by a husband and wife, who are residents of Virginia, to recover for injuries sustained by the husband in an accident at Lockport, New York, allegedly caused by the negligence of the railroad company's employees. Process was served July 30, 1962, on the chief clerk of the appellee's office in the District of Columbia.

On August 27, 1962, the New York Central, appearing specially, moved to dismiss or in the alternative to quash the service of process on the ground that on July 30, 1962, it was not doing business in the District of Columbia, and in support filed the affidavit¹ of its vice president averring:

"(1) That on June 8, 1961, the New York Central System was a consolidated corporation incorporated in the States of New York, Pennsylvania, Ohio, Indiana, Illinois and Michigan; that it is presently incorporated solely in the State of Delaware; and that its executive offices are, and always have been, located in the State of New York; and

"(2) That the corporation is engaged in the operation of lines of railroad, as a common carrier of passengers and freight, in the States of New York, Massachusetts, Pennsylvania, Ohio, Indiana, Illinois, Michigan, Missouri and West Virginia; and

"(3) That the corporation has no authority to transact business in the District of Columbia and does not have, and never has had, a certificate of authority pursuant to the District of Columbia Code, Title 29, Section 933; and

"(4) That the corporation does not own or operate, and never has owned or operated, any lines, trackage rights or transport facilities of any kind into or within the District of Columbia; and

"(5) That the sole function of the New York Central System office, located in Room 228 of the Shoreham Building, Washington, D. C., is to solicit traffic, largely from the Federal Government, to be moved over lines entirely outside of the District of Columbia; and that all financial matters pursuant to such

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