Grace v. MacArthur

• Decision Date: 16 February 1959
• Docket Number: Civ. No. B-306.
• Citation: 170 F. Supp. 442
• Parties: Preston W. GRACE and Charlotte B. Grace, his wife, Plaintiffs, v. John D. MacARTHUR, Ronnie Smith, and Bankers Life & Casualty Co., Defendants.
• Court: U.S. District Court — Eastern District of Arkansas

170 F. Supp. 442

Preston W. GRACE and Charlotte B. Grace, his wife, Plaintiffs, v. John D. MacARTHUR, Ronnie Smith, and Bankers Life & Casualty Co., Defendants.

Civ. No. B-306.

United States District Court E. D. Arkansas, N. D.

February 16, 1959.

M. F. Highsmith, Batesville, Ark., Mehaffy, Smith & Williams, Robert V. Light, Little Rock, Ark., for plaintiffs.

Wright, Harrison, Lindsey & Upton, Edward L. Wright, Little Rock, Ark., for defendant, Ronnie Smith.

Owens, McHaney, Lofton & McHaney, James M. McHaney, Little Rock, Ark., for defendant, John D. MacArthur.

HENLEY, District Judge.

On motions of the defendants, John D. MacArthur and Ronnie Smith to quash service of summons.

This is an action brought by Preston W. Grace and Charlotte B. Grace, his wife, citizens of Arkansas, against three defendants, referred to collectively as "Bankers Group", for damages for alleged breach of a written contract for the exchange of certain real and personal property, or, in the alternative, for specific performance of said contract and certain alleged amendments thereto. The defendant, Bankers Life & Casualty Co., is an Illinois corporation, authorized to do and doing an insurance business in the State of Arkansas. The defendant, John D. MacArthur, is a citizen of Illinois, and is the controlling stockholder, chairman of the board and president of the defendant corporation. The defendant, Ronnie Smith, is a citizen of Tennessee. The amount in controversy is far in excess of the statutory minimum. As stated, the three defendants are referred to collectively as "Bankers Group", and it is alleged that the defendant, Ronnie Smith, was at all times here pertinent the duly appointed, qualified and acting agent of Bankers Group, and "of the three entities comprising" that group. In other words, it is alleged that he was acting for himself and also for the corporation and for the defendant, MacArthur.

The complaint was filed on July 21, 1958, and summons was issued on the same day. Jurisdiction of the corporate defendant was obtained by service on the Arkansas State Insurance Commissioner, which service is not challenged here. Service on MacArthur was attempted under the provisions of Act 347 of the General Assembly of Arkansas for 1947 (Ark.Stats., Section 27-340) which authorizes service on the Secretary of State for the State of Arkansas with respect to any "non-resident person, firm, partnership, general or limited, or any corporation not qualified under the Constitution, and Laws of this State as to doing business herein" who has done any business or performed any character of work or service in the State. The Marshal's return as to Smith recites that the writ came to hand on July 21, 1958, and that on the same day he served the same "by personally delivering to him a copy of this writ, together with a copy of the Complaint, on the Braniff Airplane, Flight No. 337, non-stop flight from Memphis, Tenn. to Dallas, Texas, said copy being delivered to him at 5:16 P.M. at which time the said airplane was in the Eastern District of Arkansas and directly above Pine Bluff, Arkansas, in said District."

The motion to quash filed by MacArthur alleges that he "has not done any business or performed any character of work or service in the State of Arkansas and has not appointed the Secretary of State of the State of Arkansas as an Agent for acceptance of service of process upon him", and that "there has been no lawful service of process upon (him) and the Court is without jurisdiction over his person". Smith's motion asserts that "he has not been properly served with process in this action within the State of Arkansas, and this Court is without jurisdiction over the person of said defendant". (Emphasis supplied.) Said motions have been submitted upon written briefs.

Taking up first the motion of Ronnie Smith, it is noted that he does not question the recitals in the Marshal's return to the effect that he was served with a copy of the summons and of the complaint while he was a passenger on a Braniff airplane at a time when said aircraft was physically above the City of Pine Bluff in the Eastern District of Arkansas. His position is simply that at the time he was served, he was not within the "territorial limits" of the State of Arkansas, as required by Rule 4(f) of the Federal Rules of Civil Procedure, 28 U.S. C.A.¹

In their briefs in connection with Smith's motion counsel on both sides state that they have been unable to find any case dealing with the specific problem in hand. The Court likewise has been unable to find such a case. Nonetheless, the Court is persuaded that a person moving in interstate commerce across the State of Arkansas in a regular commercial aircraft, flying in the regular navigable airspace above the State, is within the "territorial limits" of the State and is amenable to service under the provisions of Rule 4(f), supra.

In approaching this question it is well to keep in mind that we are not here concerned with any problem of conflicting regulatory provisions of State and federal governments such as were involved in Alleghany Airlines, Inc., v. Village of Cedarhurst, D.C.N.Y., 132 F.Supp. 871, affirmed, 2 Cir., 238 F.2d 812, or with any problem of the taxable situs of aircraft such as confronted the Court in Braniff Airways v. Nebraska State Board of Equalization and Assessment, 347 U.S. 590, 74 S.Ct. 757, 98 L.Ed. 967, or with any claim of surface ownership extending upward under the common law "ad coelum" doctrine such as was presented in Causby v. United States, 60 F.Supp. 751, 104 Ct.Cl. 342, reversed United States v. Causby, 328 U.S. 256, 66 S.Ct. 1062, 90 L.Ed. 1206, and in Antonik v. Chamberlain, 81 Ohio App. 465, 78 N.E. 2d 752. The narrow question for us to decide is whether for service purposes, the passengers on a commercial aircraft are within the territorial limits of the State over which the plane happens to be flying at a particular time.

Apart from any supposed effect of the Air Commerce Act of 1926, 49 U.S.C.A. § 171 et seq., as amended by the Civil Aeronautics Act of 1938, 49 U.S. C.A. § 401 et seq., it is clear that an aircraft flying over a State is within that State and is subject to its jurisdiction. For example, in the leading case of Smith v. New England Aircraft Co., Inc., 270 Mass. 511, 170 N.E. 385, 389, 69 A.L.R. 300, 308, the Court said:

"* * * It is essential to the safety of sovereign States that they possess jurisdiction to control the air space above their territories. It seems to us to rest on the obvious practical necessity of self-protection. Every government completely sovereign in character must possess power to prevent from entering its confines those whom it determines to be undesirable. That power extends to the exclusion from the air of all hostile persons or demonstrations, and to the regulation of passage through the air of all persons in the interests of the public welfare and the safety of those on the face of the earth. This jurisdiction was vested in this Commonwealth when it became a sovereign State on its separation from Great Britain. * * *"

The Smith case was cited with approval in State v. Northwest Airlines, 213 Minn. 395, 7 N.W.2d 691, wherein it was said; "The sovereign power and jurisdiction of a state is not limited to the ground. An airplane in the air over the territory of a state is within the state and subject to its sovereign power." 7 N.W.2d at page 694. Similarly, in Erickson v. King, 218 Minn. 98, 15 N.W. 2d 201, 204, the same court held that a State's power to control air traffic was subject only to the constitutional powers of Congress over interstate commerce, post roads, national defense, and the general welfare, and that apart from those particular powers the State has "not only the jurisdiction to control air traffic above the territory within its boundary, but the responsibility of a sovereign to protect such traffic and its passengers and freight." 15 N.W.2d at page 204. To the same effect see also People v. Katz, 140 Misc. 46, 249 N.Y.S. 719.

In United States v. One Pitcairn Biplane, D.C.N.Y., 11 F.Supp. 24, 25, the facts were that an aircraft had taken on a load of liquor in Canada and had flown non-stop to a point in Ohio passing en route over a portion of the Western District of New York. On a subsequent flight the plane landed in the district just mentioned and was there seized by the customs officials on account of its previous smuggling operation. The question presented was whether the previous flight of the plane while in transit from Canada to Ohio "constituted an entry" into the Western District of New York so as to give the federal courts of that district jurisdiction with respect to the libel. The Court answered that question in the affirmative, employing the following language: "It is admitted that the respondent airplane smuggled merchandise into the United States. Therefore, when the airplane, carrying smuggled merchandise, crossed the international boundary and proceeded over the Western District of New York, it entered said district and gave this court jurisdiction for the purpose of this action." 11 F. Supp. at page 26.

Moreover, a number of the States have adopted the Uniform Aeronautics Act, which declares, among other things, that sovereignty in the airspace rests with the State, except where granted to and assumed by the United States. Arkansas has adopted a version of that Act which now appears in Ark.Stats., Sections 74-101 et seq. Section 74-111 provides that all crimes, torts, and other wrongs committed by or against a pilot or passengers while in flight over the lands and waters of the State shall be governed by its laws, and that the question of whether damage occasioned by or to an aircraft while over this State constitutes a tort, crime or other wrong shall be determined by Arkansas law. And Sections 74-112 and 74-113 provide, respectively, that contractual relations entered into upon an...