Gilliam v. Moog Industries, Inc.

• Decision Date: 27 May 1965
• Docket Number: No. 300,300
• Citation: 239 Md. 107,210 A.2d 390
• Parties: Walter GILLIAM v. MOOG INDUSTRIES, INC.
• Court: Maryland Court of Appeals

Page 107

239 Md. 107

210 A.2d 390

Walter GILLIAM v. MOOG INDUSTRIES, INC.

No. 300.

Court of Appeals of Maryland.

May 27, 1965.

Hyman Ginsberg, Baltimore (Ginsberg & Ginsberg, Baltimore, on the brief), for appellant.

Lawrence F. Rodowsky, Baltimore (Frank, Bernstein, Gutberlet & Conaway, Baltimore, on the brief), for appellee.

Before PRESCOTT, C. J., and HAMMOND, HORNEY, MARBURY and SYBERT, JJ.

HAMMOND, Judge.

The appellant Gilliam was employed by the appellee, Moog Industries, Inc., under a written contract executed in St. Louis in 1962 as district manager of an area that included Delaware, southern New Jersey, and parts of Pennsylvania, Virginia and Maryland. His contract was terminated and his services dispensed with, he claims wrongly, on July 31, 1963. Four months later Gilliam filed suit against Moog in the Superior Court of Baltimore City for breach of contract, justifying jurisdictional venue by the claim that Moog was a foreign corporation doing business in Maryland and was, therefore, subject to suit in Maryland under Code (1957), Art. 23, Sec. 92(a). Service was made upon the State Department of Assessments and Taxation as the statutory agent of a foreign corporation doing business in the State without a resident agent, under Code (1957), Art. 23, Sec. 97. Moog moved to quash the writ of summons on the grounds that it did no business in Maryland, the contract sued on was not made in this State and Gilliam at the time of the execution of the contract, was not a resident of Maryland. Judge Carter, on July 9, 1964, quashed the writ, holding that the activities of Moog and its agents in Maryland, including activities designed to stimulate interest in its products and facilitate the placing of orders for them, added up to no more than solicitation of business which did not amount in law to doing business or otherwise subject Moog to suit in Maryland. We think Judge Carter took the correct view of Moog's activities and was right in not finding it to be subject to suit here.

Moog is a Missouri corporation engaged in the business of manufacturing thousands of different automobile replacement parts which it sells to independent warehouse distributors (two in Maryland) who in turn sell them through the efforts of their own sales forces to jobbers. The jobbers sell to the installers, such as service stations, repair shops and fleet operators. Moog has no place of business, no office, no property of any kind, no bank account, and no telephone listing in Maryland. It holds no corporate meetings and pays no taxes in Maryland. Moog does not advertise locally in the State, using only trade publications aimed at the automotive industry throughout the country.

Gilliam, as district manager of Moog in this area, promoted the sale of its products by calling on warehouse distributors and jobbers and the customers of jobbers. He conducted 'clinics' for installers to sell the idea of the superiority of Moog's output, particularly new products. He had an assistant or 'missionary man,' whose duties were similar. Neither the manager nor the missionary man had any authority to accept orders in Maryland, this, for credit reasons, being done only at the head office in St. Louis.

The present case is a fact brother of Feldman v. Thew Shovel Co., 214 Md. 387, 135 A.2d 428; G. E. M., Inc., v. Plough, Inc., 228 Md. 484, 180 A.2d 478; and Chesapeake Supply & Equipment Co. v. Manitowoc, 232 Md. 555, 194 A.2d 624, in each of which the defendant corporation was held not to be doing business in Maryland, and does not have the additional features which in Thomas v. Hudson Sales Corp., 204 Md. 450, 105 A.2d 225; and White v. Caterpillar Tractor, 235 Md. 368, 201 A.2d 856, made the holdings go the other way.

The appellant argued earnestly to us, in the brief and orally, that even if Moog was not 'doing business' in Maryland within the judicially declared meaning of that phrase, it was subject to suit here under the provisions of Ch. 95 of the Laws of 1964, effective June 1, 1964, which added Secs. 94 to 100, inclusive, to Art. 75 of the Code under the new sub-title 'Bases of Personal Jurisdiction Over Persons Outside This State' to provide (Sec. 96(a)) that a court may exercise personal jurisdiction over a person or corporation who acts, directly or by an agent, as to a cause of action arising from the person's:

'(1) transacting any business in this State;

'(2) contracting to supply services in this State;

'(3) causing tortious injury in this State by an act or omission in this State;

'(4) causing tortious injury in this State by an act or omission outside the State if he regularly does or solicits business, engages in any other persistent course of conduct in this State or derives substantial revenue from food or services used or consumed in this State;

'(5) having an interest in, using, or possessing real property in this State; or

'(6) contracting to insure any person, property, or risk located within this State at the time of contracting.'

It further provides (Sec. 97) that when the exercise of personal jurisdiction is authorized by 'this sub-title' service may be made outside the State, and that (Sec. 100) service may be made, in addition to any other method allowed by law, '* * * in accordance with Chapter 100 of the Maryland Rules of Procedure or in such other manner as may hereafter be established by rule of the Court of Appeals of Maryland.'

It seems clear that the purpose of the Legislature in enacting these new provisions was to give the courts of the State personal jurisdiction over all out of state persons and corporations which constitutionally could be reached as having had sufficient Maryland contacts, under the jurisdictional yardsticks established by the Supreme Court in cases such as International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95; McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283.

It is to be noted first that service in the present case was upon the State Department of Assessments and Taxation, as is authorized by the Code (1957), Art. 23, Secs. 96(d) and 97, in suits against foreign corporations doing business in the State which do not have a resident agent, and that no attempt was made to effect service pursuant to Chapter 100 of the Maryland Rules (no other rule on the subject has been promulgated by this Court) and, second, that the cause of action sued on had accrued before the effective date of Ch. 95 of the Laws of 1964.

The cases and the writers have differed as to whether statutes similar to those enacted by Ch. 95 of the Laws of 1964, which have enlarged the bases for personal jurisdiction over out...