Harnischfeger Sale Corporation v. Sternberg Co., Inc
| Decision Date | 29 January 1934 |
| Docket Number | 32247 |
| Citation | 154 So. 10,179 La. 317 |
| Court | Louisiana Supreme Court |
| Parties | HARNISCHFEGER SALE CORPORATION v. STERNBERG CO., Inc |
On Application for Rehearing March 26, 1934
Appeal from Sixth Judicial District Court, Parish of East Carroll F. X. Ransdell, Judge.
Suit by the Harnischfeger Sale Corporation against the Sternberg Company, Inc. Plaintiff obtained a writ of sequestration, and the sequestered property was later released on a forthcoming bond. Judgment for plaintiff, and defendant appeals.
Amended and affirmed.
O'Niell & O'Niell, of New Orleans, for appellant.
Lines Spooner & Quarles, of Milwaukee, Wis., and Theus, Grisham Davis & Leigh, of Monroe, for appellee.
OPINION
This suit is one for the balance due on the purchase price of a drag-line machine. The machine is adaptable to the building of levees, and was purchased for that purpose. The price of it was $ 26,630, of which $ 3,000 was paid in cash. The balance, amounting to $ 23,630, was divided into twenty monthly installments of $ 1,181.50 each, beginning October 15, 1930, with 6 per cent. yearly interest from August 1, 1930, represented by promissory notes, made by defendant, and secured by chattel mortgage on the machine.
The balance sued for is evidenced by the last fourteen notes of the series of twenty notes given. In suing, plaintiff obtained a writ of sequestration, under which the machine was sequestered. Later it was bonded by defendant.
The machine was ordered by defendant from its domicile in the state of Missouri, on one of plaintiff's printed forms, which defendant signed in the early part of August, 1930, and forwarded to plaintiff at its domicile in Wisconsin. Plaintiff accepted the order at its domicile a month later, and the order, in its accepted form, became the contract between the parties, and will hereafter be referred to as such. The chattel mortgage and promissory notes were executed by defendant at its domicile in Missouri, and the notes were made payable at the First Wisconsin National Bank, of Milwaukee.
In due course, the machine was shipped by plaintiff to defendant at Eudora, Ark., near which defendant was constructing a levee on the Mississippi river, under contract with the United States government. Over a year later, the machine was sent by defendant to East Carroll parish, in this state, for the purpose of building a levee there for the United States, on the Mississippi. The machine had been in East Carroll for several months when defendant refused to make further payments, and the sequestration was run.
Both plaintiff and defendant were organized under the laws of Delaware, and are therefore foreign corporations. Defendant has not appointed an agent for service of legal process in this state, claiming that it was not under any legal obligation to do so, for the reason that, in no proper sense, is it, or has it, been doing business in this state.
Defendant filed a motion to quash the citation, the writ of sequestration, and the service thereof. This motion rests upon the ground that defendant has never done business in this state, and was not qualified to do business in it, and that service made on the secretary of state, as was done here, was invalid. Later defendant filed an exception to the jurisdiction of the court ratione personae, grounded substantially upon the same grounds as was the motion to quash. Both exceptions were overruled.
Under the law of this state, a foreign corporation, before acquiring the right to do business therein, among other things, must designate in writing, and file with the secretary of state, the name of a person, residing in the parish where it has an established business, upon whom service of legal process may be made. Act No. 184 of 1924, p. 286. Where the foreign corporation, doing business in the state, has failed to comply with the law in this respect, or where the agent, if appointed, cannot be found, and where the corporation has not established and maintained an office in the state, the officer charged with the duty of making service is required, after diligent effort to serve the process, to make return to the court, stating the efforts made by him to secure service, and the reasons for his failure to secure it, when it becomes the duty of the judge or, in his absence, of the clerk to order service to be made on the secretary of state. Section 26, Act No. 267 of 1914, p. 532. Service, after the sheriff's return was filed, was made, under orders of court, on the secretary of state.
The complaint, as stated, is that, since defendant was at no time doing business in the state, it was not required to appoint an agent for service, and hence that the law did not authorize the service made.
Defendant, whose business was the construction of levees, has never entered into but one contract to build a levee in this state, and that contract is the one now mentioned.
Ordinarily, the transaction of one piece of business in a state, or the entering into one contract therein, is not considered, under statutes similar to the present, as doing business in the state. 14 C. J. p. 1273; 12 R. C. L. § 48, title "Foreign Corporations." In this instance, however, the contract was such a one and of such duration as to require the making of numerous smaller contracts, such as those for the employment of labor and the repair of machinery.
The law hardly contemplated that a foreign corporation may undertake such a contract in this state without complying with its laws by appointing an agent for service of process. We therefore hold that the service was valid.
Defendant, however, urges that, assuming the validity of the service, nevertheless the court did not acquire jurisdiction in the case, because the cause of action did not arise in this state. The cause of action unquestionably arose outside of the state, and not with reference to business done therein. As to a cause of action so arising against a foreign corporation, whether it arises ex contractu or ex delicto, whether the foreign corporation has qualified to do business in this state or not, the general rule is that, as the cause of action arose out of the state, the courts of the state are without jurisdiction of it ratione materiae. Hodges & Co. v. Pennsylvania Railroad Company, 171 La. 699, 132 So. 115; French v. Artistic Furniture Co., 173 La. 982, 139 So. 307. An exception exists, we think, pretermitting the right to attack under Act No. 220 of 1932, where the foreign corporation, doing business in the state, has brought property into it, burdened with a privilege or a chattel mortgage. Where the corporation has so brought property into the state, the privilege or the chattel mortgage may be enforced as is sought to be done here, by bringing the property before the court by means of a writ of sequestration, on obtaining citation of the defendant, but the judgment to be obtained can be only one in rem. Were this not true, when this suit was brought, which was in November, 1931, prior to the passage of Act No. 220 of 1932, it is doubtful whether a lien could have been enforced as to property brought into the state by a foreign corporation, without taking a circuitous route, causing great delay, which the law did not contemplate.
Therefore, whatever judgment may be here rendered in favor of plaintiff, if any, must be one strictly in rem. As we find that we have jurisdiction to that extent, it will be necessary to pass upon the merits of the case to ascertain whether plaintiff is entitled to a judgment at all.
It does not admit of question that the amount sued for is due, unless, as averred by defendant, plaintiff has breached its warranty by delivering to defendant a machine incapable of operating successfully with a 2-yard bucket for carrying dirt on a 60-foot boom. The contract of sale called for a standard 50-foot boom and a 10-foot extension. Such a boom appears to have been delivered as part of the machine. The property ordered and delivered is described as follows:
The warranty stipulated in the contract is limited. Nothing is therein said touching the capacity of the machine. The warranty reads as follows:
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