Dumas v. Chesapeake & O. Ry. Co., 606

• Decision Date: 14 December 1960
• Docket Number: No. 606,606
• Parties: Alexander DUMAS v. CHESAPEAKE AND OHIO RAILWAY COMPANY.
• Court: North Carolina Supreme Court

Page 426

117 S.E.2d 426

253 N.C. 501

Alexander DUMAS v. CHESAPEAKE AND OHIO RAILWAY COMPANY.

No. 606

Supreme Court of North Carolina.

Dec. 14, 1960

D. C. MacRae, High Point, and Julian Franklin for plaintiff, appellee.

James B. Lovelace, High Point, for defendant, appellant.

PARKER, Justice.

The Chesapeake and Ohio Railway Company, hereinafter called the company, is a Virginia corporation with its legal domicile and principal office in the city of Richmond, Virginia. The summons in this action was issued on 14 January 1960 by the clerk of the Superior Court of Guilford County, and served 15 January 1960 on 'Mr. William Hudson Trent, general agent Chesapeake and Ohio Railway Co.' by the sheriff of Forsyth County.

In support of its motion the company offered in evidence the affidavits of T. H. Keelor, its secretary, and of William Hudson Trent, who resides in the city of Winston-Salem, North Carolina, and is an employee of the company in the traffic department, and is designated a general agent. Plaintiff's evidence consists of the testimony of William Hudson Trent, who was called by plaintiff as a witness.

These facts appear from the evidence: The company operates a railway system through the States of Virginia, West Virginia, Kentucky, and northward, but has no railway lines or tracks, nor does it operate any trains, cars, or other equipment in, on, or across the State of North Carolina. The company has in its employ in North Carolina as its agents William Hudson Trent, who is in charge of an office maintained by the company in the Reynolds Building in Winston-Salem, A. G. Daughtrey, who is in charge of an office maintained by the company in the Liberty Life Building in Charlotte, and W. F. Michie, who is in charge of an office maintained by the company in the Insurance Building in Raleigh. William Hudson Trent has a secretary in the office employed by the company. This office was opened about 1924. The name of the company appears on the door of the office, and the company's name appears in the building directory. The company's name appears in the Winston-Salem Telephone Directory. The furniture in the office is owned by the company, and is listed for taxes at about $350. A. G. Daughtrey has working under his direction in the office in Charlotte one or more persons employed by the company to assist him in performing his duties. The same is true as to W. F. Michie. A. G. Daughtrey and W. F. Michie are designated general agents. The company paid William Hudson Trent a salary for the year 1959 of $9,072 by cheque from Huntington, West Virgina. The salaries of A. G. Daughtrey and W. F. Michie closely approximate the same amount. The salaries of the office employees and the rentals on the offices are paid by cheques of the company from outside of North Carolina. The company does not have, and never has had, a bank account in North Carolina. No employee of the company collects any money in North Carolina for it.

The company publishes through rates with North Carolina carriers. William Hudson Trent testified: 'My business is selling the commodity that The Chesapeake and Ohio Railway Company has to sell, which is transportation. We do not serve Cleveland. We serve Chicago. If I heard of a proposed shipment of a carload of knitted goods by P. H. Hanes Knitting Company from Winston-Salem, consigned to Chicago, I would endeavor to have the Traffic Manager at Hanes Hosiery or whoever the shipper might be route in connection with our line. He would probably route the shipment Southern Railway to Louisville, Kentucky, then to Chicago, and The Chesapeake and Ohio Railway Company would not be involved. There would be several routes available to him, and the most feasible route for my company to participate in would be over the Southern Railway Company to Lynchburg, Virginia, and over the Chesapeake and Ohio Railway Company from Lynchburg, Virginia, to destination. The bill of lading would be signed by Southern Railway. The revenue would be computed according to tariffs to cover the entire haul. The through rate would be based on the rate published and applicable tariffs at that time. My company would take the shipment in Lynchburg and take it to destination and deliver it. If it is a collect shipment, Chesapeake and Ohio Railway Company would collect the freight charges at destination. Then in our inter-line settlements we would pay the Southern Railway Company its portion of the revenue, probably sending it to their auditor in Atlanta. Out of that haul the Chesapeake and Ohio Railway Company would derive its portion of the revenue. * * * I would say within my territory which embraces northern, central North Carolina and southern Virginia, that we would handle a total tonnage of 1400 cars a month. How many of those may originate or terminate within the State of North Carolina, I couldn't estimate. That covers my general territory of which I have charge or jurisdiction. I have no idea as to the freight revenue derived from that, as I receive nothing in the way of revenue on cars involved. * * * I sell no passenger traffic whatsoever, no tickets, accept no monies. The manner in which I handle passenger traffic is when I have a request for it, I have to phone our Passenger Department in Richmond, Virginia, and tell them what is desired in the way of accommodations and train schedules, and ask them to leave it at whichever one of our ticket agents that the party here in North Carolina may be--at the point where he would board the train. Quite frequently, it is Clifton Forge. * * * If I find that there is a most desirable shipment coming to North Carolina from a point where my company originates, I would seek that business if the competition was involved. If it was a desirable piece of business, I surely would seek it. If there is such a case as that, we could be the originating carrier, and some other carrier would be the delivering carrier in North Carolina. The revenue would be received prepaid or collect and divided between the two carriers on the basis of I. C. C. approved division sheets. My job is to seek the most lucrative business in North Carolina, whether it is ingoing or outgoing. That is Mr. Daughtrey's and Mr. Michie's job also. I get the business here in North Carolina so that my road can take it somewhere else to another point and derive the revenue out of freight originating here consigned to North Carolina, but only through tariffs approved by the Commission. We hold ourselves out as a common carrier by rail.'

The company has not qualified to do business in North Carolina by compliance with the applicable statutes.

This question is presented for decision: Is the defendant company doing business in North Carolina through an agent in the State?

Defendant contends that we held in Lambert v. Schell, 235 N.C. 21, 69 S.E.2d 11, 12, that a corporate defendant doing identical acts as the corporate defendant here was not doing business or maintaining a local agent within this State so as to render it amenable to process issued in the case.

In the Lambert case and in the instant case, the corporate railway defendants neither own, lease or operate any line of railway nor any transportation facilities within the State of North Carolina. In the Lambert case the judge found that the corporate defendant's activities consist 'of the solicitation of freight and passenger business originating in or destined to points in North Carolina, which in the course of interstate and transcontinental transportation will be routed so as to move over the lines of the Union Pacific Railroad Company while within the general territory in which the lines of said company are located.' In the Lambert case the summons was served on David R. Walker as passenger and travelling freight agent of the corporate defendant. Walker maintained offices in Winston-Salem, and as to his activities the court found the following facts: His 'duties and business as such agent and representative were to cultivate good will among manufacturers' representatives in Western North Carolina and other points for and on behalf of said Union Pacific Railroad Company, with a view and purpose of inducing the routing or shipment of freight from such manufacturers over the lines of said Union Pacific Railroad Company, to solicit business for said railroad, to adjust grievances, and...