Empire Fuel Co. v. Lyons

• Decision Date: 11 April 1919
• Docket Number: 3243,3255.
• Citation: 257 F. 890
• Parties: EMPIRE FUEL CO. v. LYONS. LYONS v. EMPIRE FUEL CO.
• Court: U.S. Court of Appeals — Sixth Circuit

257 F. 890

EMPIRE FUEL CO. v. LYONS.

LYONS v. EMPIRE FUEL CO.

Nos. 3243, 3255.

United States Court of Appeals, Sixth Circuit.

April 11, 1919

Murray Seasongood, of Cincinnati, Ohio, for plaintiff.

Frank E. Wood, of Cincinnati, Ohio, and M. G. Sperry, of Clarksburg, W. Va., for defendant.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

KNAPPEN Circuit Judge.

Plaintiff in error in No. 3243 is a West Virginia coal-mining corporation. Having a contract for shipping coal to Toledo Ohio (as stated in the brief of its counsel), it made with defendant in error, on April 28, 1917, a written contract for the transportation of coal from May 15, 1917, to May 15 1918, by river barges, from Hugheston, W. Va., which is on the Kanawha river, to Pomeroy, Ohio, which is on the Ohio river, and for the loading of such coal into 'such cars as may be furnished at Pomeroy, Ohio. ' On August 15 1917, defendant in error, hereafter styled plaintiff, brought this suit in a state court of Ohio for damages for alleged breach of the transportation contract, attaching certain barges of coal. Summons was served August 23, 1917, at Cincinnati, Ohio, on B. Lee Hutchinson, who was general manager of the fuel company, hereafter called defendant. The suit was removed to the court below. Defendant there moved to quash the service of summons on the substantial ground that defendant was not doing business in Ohio and so was not subject to suit therein. After hearing, both on affidavits and oral testimony, the District Judge overruled the motion to set aside the service, holding that defendant was doing business in Ohio. Under issue joined on the merits, plaintiff recovered verdict and judgment.

1. Jurisdiction. The effectiveness of the service of summons, and thus the jurisdiction of the court below, depends upon whether defendant was doing business in Ohio, 'in such a manner and to such an extent as to warrant an inference that through its agents it was present there. ' Green v. Chicago, B. & Q. Ry. Co., 205 U.S. 530, 532, 27 Sup.Ct. 595, 596 (51 L.Ed. 916). If defendant was doing business in Ohio, service on Hutchinson gave jurisdiction. Defendant had acquired no permission under the statutes of Ohio to do business in that state. Its main office was at Fairmount, W. Va.; its mining office at Hugheston, in that state. Mr. Hutchinson, its general manager in charge of operations, spent about one-half his time at Hugheston, the remainder at Cincinnati, where he resided, going back and forth from Cincinnati to the mines. He was the managing agent of the Hutchinson Coal Company, which maintained an office at Cincinnati, where Hutchinson kept 'an Empire Fuel Company file,' 'for his personal reference and for the Hutchinson Coal Company,' and carried on from Cincinnati such correspondence as was necessary between himself and persons at the mines. But this, standing alone, was not enough to constitute a doing of business by defendant in Ohio. Goldey v. Morning News, 156 U.S. 518, 15 Sup.Ct. 559, 39 L.Ed. 517; Green v. Chicago, B. & Q. Ry. Co., supra; Peterson v. Chicago, R.I. & P. Ry. Co., 205 U.S. 364, 27 Sup.Ct. 513, 51 L.Ed. 841; Atchison, T. & S.F.R.R. Co. v. Weeks (C.C.A. 5) 254 F. 513, . . . C.C.A. . . . . Hutchinson also sold in Ohio, to another coal company, three barges of coal, which were loaded from time to time between August 20th and September 26th, in that company's barges at Hugheston, W.Va. But a sporadic or occasional sale in Ohio did not constitute a doing of business therein (Cooper Mfg. Co. v. Ferguson, 113 U.S. 727, 5 Sup.Ct. 739, 28 L.Ed. 1137); and except as already or hereafter stated defendant seems to have done no business in Ohio, and it kept no books or bank account there.

But this further situation is presented: The contract in suit was personally negotiated at Pomeroy, Ohio, between Hutchinson and plaintiff. It was executed at Charleston, W. Va.; Hutchinson signing for defendant as its general manager, his authority to do so being unchallenged. Hutchinson kept at the Cincinnati office a copy of the contract, the original being kept at defendant's main office at Fairmount. At Cincinnati, while the contract was still subsisting, Hutchinson discussed with plaintiff its 'meaning and intent.' From Cincinnati he conducted correspondence with plaintiff, signing one or more letters in defendant's name by himself as general manager. From Cincinnati, as representing defendant, he sent plaintiff 'different telegrams,' at least one of which (that of August 2d), relating to the unloading of barges then at Pomeroy, was signed in defendant's name alone. From Cincinnati he inclosed to plaintiff vouchers for the transportation and loading of coal during the months of May and June under the contract in suit; the checks having been sent to Hutchinson from defendant's main office for the correct address, the letter of transmittal being signed in defendant's name by Hutchinson as its general manager. Hutchinson wrote plaintiff from Cincinnati to forward to him at that place an expense bill of about $500 incurred for raising a sunken boatload of coal, and the bill was sent accordingly. On June 23d plaintiff wrote Hutchinson at Cincinnati, as defendant's manager, regarding the loading of fuel coal called for by the contract. Hutchinson replied thereto by letter as defendant's general manager, apparently from Cincinnati. On or about June 1st the loading of coal into plaintiff's barges was suspended, because defendant had then a full supply of cars. From June 29th to August 11th, however, six barges were loaded, all of which were attached by plaintiff before they were unloaded; but the relations under the contract were not broken off until just before this suit was begun. Hutchinson acted for defendant in all the dealings between it and plaintiff relative to the contract in suit, and had no dealings with plaintiff except on behalf of defendant. The contract covered, potentially, at least, an important and substantial amount of defendant's business during the year. Plaintiff construes it as providing absolutely for the transportation of 350 tons per day; defendant construes it as providing for such transportation to the extent that railroad cars were not available. The capacity of the mines was approximately 600 tons per day. This consideration is entitled to weight. Maxwell v. A., T. & S.F.R.R. Co. (C.C.) 34 F. 286, 287. The contract called for its performance in Ohio, to the extent of the delivery of the coal at Pomeroy to defendant in railroad cars. The fact of delivery necessitated the furnishing by defendant of cars therefor and the billing of the same to destination.

The Hutchinson Coal Company, of which Hutchinson was the managing agent, 'had the agency for the Empire Fuel Company. ' Hutchinson was at Pomeroy on several occasions (apparently during the period covered by operations under the contract) 'seeing that barges were unloaded and cared for. ' Those barges were said to be 'not involved in this suit,' whatever that may mean. While there was testimony that the Hutchinson Company's 'agent at the mines' was in charge of the unloading and billing out of cars, and that Hutchinson merely went to Pomeroy with him, and while other testimony was susceptible of a construction that the Hutchinson Company bought all defendant's output and itself sold it, the district judge states in his opinion that it was Hutchinson's claim that the Hutchinson Company 'as the defendant's agent sells the defendant's coal,' and defendant's counsel does not dispute this interpretation. While it may be that this is not the correct interpretation of the relations between the Hutchinson Company and defendant, yet, as the record stands, we think it should be accepted. On this state of facts we must accept the court's conclusion that defendant was doing business in Ohio, certainly until the severing of relations between plaintiff and defendant, immediately before the bringing of this suit.

The question remains whether defendant should be regarded as still doing business in Ohio when service of process was made a few days later. The record permits a presumption of defendant's intention, in the regular course of its business, to ship by water to Pomeroy and there load into cars and bill coal, as was contemplated and as was done under the contract with plaintiff, whenever there should be a shortage of railroad cars. We think the burden of proof was upon defendant to overcome that presumption, and that this has not clearly been done. Previous to the contract with plaintiff defendant had had 'a river connection' with other people for whom plaintiff was substituted; and the record introduced by defendant upon the hearing on the merits justifies the inference that in September, when the supply of cars was less complete, a river connection was resumed with still a third party, and deliveries made thereunder presumptively at Pomeroy, for the purpose of shipment from that place. 'Doing business' within a state does not necessarily require that it be done persistently and continuously. New Haven Co. v. Downington (C.C.) 130 F. 605. No all-embracing rule as to what is 'doing business' has been laid down. St. Louis S.W. Ry. v. Alexander, 227 U.S. 218, 227, 33 Sup.Ct. 245, 57 L.Ed. 486, Ann. Cas. 1914C, 77. The question whether defendant was doing business in Ohio is one of fact. Oakland Co. v. Wolf Co. (C.C.A. 6) 118 F. 239, 55 C.C.A. 93. It does not follow from the fact that the contract was made in West Virginia that all business done under it must be regarded as done in that state. Lumbermen's Ins. Co. v. Meyer, 197 U.S. 407, 414, 25 Sup.Ct. 483, 49 L.Ed. 810. Even if no one of the things Hutchinson did for defendant in Ohio was enough to constitute doing business there,...