Ex parte Emerson

• Decision Date: 30 June 1960
• Docket Number: 6 Div. 553
• Citation: 270 Ala. 697,121 So.2d 914
• Parties: Ex parte Laura H. EMERSON.
• Court: Alabama Supreme Court

Page 914

121 So.2d 914

270 Ala. 697

Ex parte Laura H. EMERSON.

6 Div. 553.

Supreme Court of Alabama.

June 30, 1960.

Turner & Turner, Tuscaloosa, for petitioner.

Jones, McEachin & Ormond, Tuscaloosa, for respondent.

STAKELY, Justice.

The petitioner Mrs. Laura H. Emerson filed her complaint in the Circuit Court of Tuscaloosa County, Alabama, against Dr. J. B. King, doing business as King Laboratories, claiming damages for personal injuries received as a result of the purchase and use in the County of Tuscaloosa, Alabama, of Pedolatum, a product manufactured by the defendant for the removal of corns and calluses.

The complaint alleges that the defendant sold the aforesaid Pedolatum to retail druggists in the County of Tuscaloosa, Alabama, for resale to the public, including the plaintiff, to be used for the removal of corns and calluses, according to the directions printed on the label by the defendant, that the aforesaid Pedolatum contained harmful ingredients which were imminently or inherently dangerous when used as directed by the defendant for the purposes for which it was intended.

The summons and affidavit attached to the complaint stated that the defendant is a nonresident of the State of Alabama, that his last known post office address was Jacksonville Road, Tyler, Texas, and that the provisions of Title 7, § 199(1), 1955 Cumulative Pocket Part, Code of 1940, were applicable for obtaining service of process upon the defendant. Service of summons and complaint were had upon the Secretary of State of the State of Alabama and a copy of the summons and complaint were mailed by registered mail, return receipt requested, to the defendant at the aforesaid post office address by the Secretary of State of the State of Alabama, and a return receipt, signed by Dr. J. B. King, was received back in the office of the Secretary of State of the State of Alabama as provided by Title 7, § 199(1), 1955 Cumulative Pocket Part Code of 1940.

The defendant Dr. J. B. King, doing business as King Laboratories, entered a special appearance and filed a motion to quash service of process on the grounds that (1) he was not doing business in Alabama and (2) the affidavit attached to the summons and complaint did not state facts sufficient to obtain service of process as provided by Title 7, § 199(1), 1955 Cumulative Pocket Part, Code of 1940.

The Hon. W. C. Warren, judge of the Circuit Court of Tuscaloosa County, granted the motion to quash the service because the plaintiff's affidavit 'does not state the facts upon which the plaintiff claims the right to have service through the Secretary of State by mail as provided in § 199(1), Title 7, (1955 Cumulative Pocket Part, Code of 1940).' Parentheses supplied.

The plaintiff amended her complaint for the purpose of adding as a party defendant Pedolatum Distributors and for the purpose of amending the affidavit required by Title 7, § 199(1), Code of 1940, as follows: 'That the cause of action made the basis of this suit arose out of the doing of business in the State of Alabama by the defendants consisting of the sale and distribution of a drug or medicine named Pedolatum by the Defendants in the State of Alabama, to retail druggists in the City of Tuscaloosa, County of Tuscaloosa, State of Alabama, for resale to the public, including the Plaintiff, that the provisions of Title Seven, Section 199(1), Code of 1940, are applicable in this cause for obtaining service of process on both the defendants, that the defendants are residents of the State of Texas and that their last known post office address is Jacksonville Road, Tyler, Texas.'

Service of process was had on the Secretary of State of the State of Alabama and copies of the amended summons and complaint were sent to the defendants by registered mail to the aforesaid post office address and return receipts were received back in the office of the Secretary of State of the State of Alabama, properly signed by the defendants.

The defendants appeared specially and separately filed their motions to quash the aforesaid service or attempted service of the summons and complaint on the ground that the defendants were not doing business in the State of Alabama at the time of the aforesaid service or at any time prior thereto within the meaning of Title 7, § 199(1), 1955 Cumulative Pocket Part, Code of 1940. The deposition of Dr. J. B. King was taken by stipulation under § 474(1-18), Title 7, 1955 Cumulative Pocket Part, Code of 1940, in Tyler, Texas. The deposition of Henry W. Holland had been previously taken in Tyler, Texas, under the same statute prior to the first order of the trial court quashing service.

The motions of each defendant were heard and argued before the Hon W. C. Warren, Judge of the Circuit Court of Tuscaloosa County, Alabama, and each motion was granted and service of the summons and complaint on each defendant was quashed on the ground that the evidence on the motion showed that the defendants were not doing business in the State of Alabama.

When the depositions of Dr. J. B. King and Henry W. Holland are read together we consider that they both substantially show in substance the following. Dr. J. B. King is the sole owner and operator of the King Laboratories of Tyler, Texas, and the product known as Pedolatum is the only product manufactured by King Laboratories. Pedolatum is a product for the removal of corns and calluses and has been approved by the Pure Food and Drug Administration of the Department of Education and Welfare of the United States. At one time it was contemplated that a distribution organization known as Pedolatum Distributors would be formed. However that distribution organization was never formed and if there is any such legal entity as Pedolatum Distributors, it is owned solely by Dr. J. B. King, the same party who is the sole owner of King Laboratories.

Pedolatum is not manufactured in large amounts. Some three or four men have at times sold Pedolatum with the entire United States as their territory. Henry W. Holland, who has been heretofore mentioned is one of these men. These men purchased the product Pedolatum outright from King Laboratories and sold it at a profit. Dr. King furnished no transportation to any man selling Pedolatum, made no income tax deduction or social security deduction for any man selling Pedolatum, carried no workman's compensation insurance, health or accident insurance or any insurance of any kind whatsoever covering the men selling Pedolatum, did not pay any travel expense whatsoever of the men selling Pedolatum, these men selecting their own methods or means of selling and choosing their own territory out of the entire United States and King Laboratories exercised no control over the methods used by these men.

King Laboratories is a small one man operation with only three or four men selling Pedolatum within the entire United States, each in their own territory. The sales in Alabama are casual and occasional only.

None of the defendants on whom service was attempted maintain any office in Alabama, had any warehouse in Alabama, owned any property in Alabama, had any place of business whatsoever in Alabama, had any distributor, manufacturer's agent or similar connection in Alabama.

The defendant Dr. J. B. King had been a resident of the State of Texas for 17 1/2 years prior to the time that his deposition was taken. What few orders were sold in Alabama were sold either by one of the three or four men who came into Alabama and took orders for the product, sent the orders to Tyler, Texas, subject to acceptance there and the product was then sent by mail to the buyer into Alabama. If the purchaser wished to pay for the product the payment would be retained by the salesman and the balance, less the commission, would be remitted to Dr. King. This was done at no particular intervals. The defendants had no connection whatever with the State of Alabama other than the occasional sale of the product Pedolatum in the nature and manner stated above.

We think it well at this point to refer more specifically to the testimony of Henry W. Holland because his deposition was introduced in evidence by the petitioner and is emphasized by the petitioner. Henry W. Holland testified that he was compensated on a commission basis and that he did not receive any compensation whatever other than a commission. He also testified that with reference to the two or three salesmen who had the entire United States as their territory, they were paid in the same manner as he was paid.

He further testified that there was a written contract with Dr. King covering the terms of the relationship with him and the other salesmen but that it had not been signed but also that it was the agreement under which they operated with Dr. King. The contract which provided for a partnership between him and Dr. King and three others provided that 'each of the partners, except Dr. J. B. King, shall purchase said deals from his own personal funds and resell such deals at the price of $8 per deal making delivery of such products at the time of such sale and such seller shall then retain as his own personal funds the $4.00 profit. * * *.' A deal is described in the contract as consisting of 'proper pack and 16 jars of Pedolatum.'

He testified further that Dr. King did not subtract from their commission the withholding or social security tax that is required to be paid to the Federal government, that he had filed a United States Income Tax return for the period during which he had his relationship with Dr. King, that he did not report any withholding or social security, that he did not list himself as being employed by anyone, that he had never been furnished with a W-2 statement, that he was not covered by a policy of workman's compensation insurance or by a policy or a group policy of health, accident or life insurance, that he was not paid any travelling expenses by Dr. King and that all the expense...