Courtesy Chevrolet, Inc. v. Tennessee Walking Horse Ass'n

• Decision Date: 03 May 1965
• Docket Number: No. 19385.,19385.
• Citation: 344 F.2d 860
• Parties: COURTESY CHEVROLET, INC., a corporation, Appellant, v. TENNESSEE WALKING HORSE BREEDERS' AND EXHIBITORS' ASSOCIATION OF AMERICA, a corporation, J. H. Amos, S. W. Beech, Jr., U. French Brantlet, Ed. S. Ezell, Sr., W. F. Fessey, W. V. Garnier, W. W. Gill, C. C. Turner, and J. Glenn Turner, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

344 F.2d 860 (1965)

COURTESY CHEVROLET, INC., a corporation, Appellant, v. TENNESSEE WALKING HORSE BREEDERS' AND EXHIBITORS' ASSOCIATION OF AMERICA, a corporation, J. H. Amos, S. W. Beech, Jr., U. French Brantlet, Ed. S. Ezell, Sr., W. F. Fessey, W. V. Garnier, W. W. Gill, C. C. Turner, and J. Glenn Turner, Appellees.

No. 19385.

United States Court of Appeals Ninth Circuit.

May 3, 1965.

Henry F. Walker, Hansen & Dolle, Victor R. Hansen, Joseph T. Thompson, Los Angeles, Cal., for appellant.

George E. Danielson, Los Angeles, Cal., Clarence Evans, James Evans, Farris, Evans & Evans, Nashville, Tenn., for appellees.

Before BARNES and HAMLIN, Circuit Judges, and PENCE, District Judge.

PENCE, District Judge.

The plaintiff-appellant in this private antitrust suit has appealed from an order granting the defendants' motion to quash service and to dismiss for lack of venue. From the record, it appears that the Tennessee Walking Horse Breeders' and Exhibitors' Association of America (Association) is a Tennessee general welfare corporation with its only office at Lewisburg, Tennessee, and with its objectives:

"* * * to collect, record and preserve the pedigrees of the strain of horses known as the Tennessee Walking Horses, wherever located, and the publication of a Register in such form as shall be adopted by the Association, and such other matters pertaining to the breeding, exhibiting and sale of the strain of horses known as the Tennessee Walking Horses as may be deemed advisable." (By-Laws, Article II.)

The Association is the only one in the United States in which the Tennessee Walking Horses may be registered as such. Without such registration a horse cannot compete in Tennessee Walking Horse shows, and no foal of any unregistered Tennessee Walking Horse may be registered as a Tennessee Walking Horse. The Association's by-laws permit the registration of Tennessee Walking Horses by non-members of the Association, as well as members, but at a different charge. Initial membership fees and annual membership dues are required to be paid by each member.

The Association receives at and sends from Lewisburg, Tennessee, through the mail, "papers pertaining to the pedigree, registration and transfer" of Tennessee Walking Horses, and makes and receives charges for this service. The services in regard to pedigree papers, registration and transfer papers is the most substantial part of the Association's business.

The Association collects and disseminates information concerning the breed to its members throughout the United States, sending eleven newsletters per year to each of its members. Its by-laws provide that in the exhibition and judging of all Tennessee Walking Horses, the Rules and Regulations promulgated by the Judges and Judging Committee of the Association shall be the official rules by which all such horses are to be exhibited and judged. (Articles XIV and XV). The by-laws also provide for regional vice-presidents to be elected by members of the Association, who shall not be eligible to serve as members of the board of directors but shall perform such duties as they are called upon to perform by other officers and the board of directors — in order to develop a group of persons having proven interest and experience in the affairs of the Association from whom can be selected the future leaders of the Association. (Article VIII).

At the time this suit was filed and service was made upon him, Dwain Clark, a Los Angeles attorney, was California Regional Vice-President.

There are approximately 100,000 Tennessee Walking Horses registered with the Association, and of the 1,771 members of the Association as of December 1963, 67, or about four per cent, had California addresses. Appellees' counsel at argument assumed that one-half of these were in the Southern District of California. There are approximately 150 owners of Tennessee Walking Horses in California and six major Tennessee Walking Horse breeders and stables are in Southern California.

In 1950, the Association issued a "Charter of Affiliation" to the Tennessee Walking Horse Breeders' Association of California. No charge was made for this, nor do either the Association or the California Association contribute financially to each other. The California Association has collected dues for both itself and the Association.

The Association's executive secretary attended two horse shows in California in 1959 and one in each of the years 1961, 1962 and 1963, two of which were in the District of Southern California. It paid travel expenses and supplied a judge for the Walking Horse classes in the 1961 and 1963 Southern California horse shows.

In April 1963, the executive secretary of the Association, H. Tom Fulton, wrote to Mr. Paul Raines of Memphis, Tennessee, giving him a guest card to judge the Sacramento show and in the letter ridiculed and disparaged the California exhibitors and their shows. This letter came to the attention of R. M. McClure, president of the appellant corporation and also then the Regional Vice-President of the California District, who instantly raised a complaint on behalf of the California exhibitors. Mr. Amos, chairman of the board of directors of the Association on June 21, 1963, wrote McClure that the board would hear a complaint concerning the Fulton letter on July 13, 1963, at the Association's office in Lewisburg, Tennessee. The letter was not properly addressed and was never received by McClure. On July 1st, Amos sent a telegram to McClure quoting the contents of the June 21st letter. On July 2nd, McClure wired back that the July 13th date was unacceptable because it was the first day of the Santa Barbara Horse Show, one of the Tennessee Walking Horse "point shows" which California exhibitors were expected to attend, and asked that a different date and place of hearing be granted. On the same day, Amos answered by telegram that the board of directors would meet to hear the complaint on July 13th and they expected McClure to be present.

McClure did not go to Tennessee on that date and by letter dated July 15, 1963, the Association notified the appellant that it had voted to deny the appellant, and McClure as its agent, the services of the Association because of McClure's failure to appear and prosecute his complaint. This letter was amplified by another letter of August 5, 1963, to appellant's counsel, wherein Amos stated that the appellant was denied the services of the Association, "which means all and any services that the Association can render it's sic members, including the registration or transfer of horses, or showing before its Judges. * * *"

Meanwhile, on July 24, 1963, appellant forwarded applications for registration of three foals and on August 9th appellant was notified by the Association that the applications were being held for attention at a later time, as was action on the certificate of registration and transfer for a horse to appellant.

As of October 1963, appellant owned approximately 27 Tennessee Walking Horses with an average value of between $5000-$6000. Eight horses of the breed were being trained and boarded at appellant's stables and appellant's principal breeding stallion who serviced from 12 to 24 mares per year commanded a stud fee of $150 per service. The annual payroll of the stables was $49,800. Appellant alleged that the Association had complete monopoly over the registration and transfer of the breed and that it refused and denied this service to the appellant. Thus appellant was unable to register any of its foals, was unable to sell its yearlings because of inability to produce certificates, and was unable to show its horses.

Membership in the Association is a prerequisite to membership in the California Association. Therefore, when, on March 5, 1964, the Association wrote to the California Association, returned a check together with three membership applications, stated that the applications were not on a proper form, enclosed "National Association Membership Forms" to be used by the California Association for new members, advised that two named persons had paid their dues to the Association, stated that the Association would not accept the dues tendered for the appellant, Courtesy Chevrolet, Inc. corporation and added "that Mr. McClure and the Courtesy Chevrolet Company's membership is under suspension at this time and therefore, he cannot be considered as a director of your group nor could we accept dues from him at the present time for the Courtesy Chevrolet Company," the California Association thereupon removed McClure from his position as a member of the California Association board of directors. Thereafter, too, all horses owned by the appellant were disqualified from participating in California High Point Awards in Tennessee Walking Horse shows for lack of membership by appellant in the California Association.

This antitrust action was brought in December of 1963 and service of summons and complaint was made on the Association's Regional Vice-President, Dwain Clark, with proper endorsement being made on the summons served in accordance with California Code of Civil Procedure, § 410.¹

The Association moved to quash the service of summons and complaint, and to dismiss for lack of venue, which motions were granted by the trial court in April 1964. From those orders, this appeal has been taken.

The preceding recitation of facts which were before the district court² has been set out in lengthy detail because such is necessary for imposition of the only rule of law which is uniformly applicable to all cases involving venue, viz., the decision depends entirely upon the particular facts involved.

The Association does not deny that it is engaged in commerce. Admittedly it is a nation-wide organization having members throughout America, and its services and "its Judges" are intended, as stated in its by-laws, to promote the "breeding, exhibiting and sale" of the Tennessee Walking...