Harrison v. Corley

• Decision Date: 20 March 1946
• Docket Number: 163
• Citation: 37 S.E.2d 489,226 N.C. 184
• Parties: HARRISON v. CORLEY et al.
• Court: North Carolina Supreme Court

37 S.E.2d 489

226 N.C. 184

HARRISON v. CORLEY et al.

No. 163

Supreme Court of North Carolina

March 20, 1946

Civil action to recover damages for wrongful death heard on motion by the corporate defendant, made on special appearance, to quash the summons herein and to invalidate the attempted service thereof.

The airplane accident which caused the death of plaintiff's intestate, a student pilot, occurred on December 31, 1944. The appellant, an undomesticated foreign corporation, on April 19, 1945 withdrew all of its property then in the State and discontinued the operation of the four airports located in this State, theretofore maintained in its name. It never had a process agent in this State.

Summons herein, issued December 10, 1945, was served on the appellant under G.S. s 55-38 by leaving a copy of the summons and complaint with the Secretary of State who mailed the same to the defendant.

The appellant made a special appearance and moved to quash the summons and dismiss the action for want of jurisdiction for that (1) defendant is an undomesticated foreign corporation which has no process agent in this State, (2) defendant, at the time of said attempted service, had no property within the State and was not engaged in business therein, (3) defendant is not now and has never been engaged in business in North Carolina, and (4) defendant Corley is not its officer, agent or employee upon whom service of summons may be had. The motion was supported by affidavits which appear of record.

After considering the affidavits filed and oral testimony offered the court below found the facts as set out in its judgment and concluded that appellant between October 1944 and April 1945, and particularly on December 31, 1944, 'was doing business within the State of North Carolina, and that the service of process upon the Secretary of State was a valid service of process upon the corporate defendant. ' Said defendant excepted and appealed.

Paul J Story and Proctor & Dameron, all of Marion, for plaintiff-appellee.

Edwin S. Hartshorn, of Asheville, and W. R. Chambers, of Marion, for defendant-appellant Southeastern Air Service, Inc.

BARNHILL Justice.

The merits of plaintiff's claim are not presented for review. The sole question posed for decision is whether the appellant, a foreign corporation, has been brought into court by a valid service of process. If not, the court is without jurisdiction and the action as to it must be dismissed.

The answer depends upon whether appellant, on December 31, 1944, the day the alleged liability for damages was incurred, was engaged in business activities within this State. In the last analysis the question is one of due process of law under the Constitution of the United States, U.S.Const. Amend. 14 (1), which must be determined in harmony with the decisions of the Supreme Court of the United States. American Asphalt Roof Corp. v. Shankland, 205 Iowa 862, 219 N.W. 28, 60 A.L.R. 986 and cases cited.

No all-embracing rule as to what is 'doing business' has been formulated. The question is one of fact and must be determined largely according to the facts of each individual case rather than by the application of fixed, definite and precise rules. Ivy River Land & Timber Co. v. Insurance Co., 192 N.C. 115, 133 S.E. 424; C.T.H.Corporation v. Maxwell, Com'r of Revenue, 212 N.C. 803, 195 S.E. 36.

The general rule is that when a foreign corporation transacts some substantial part of its ordinary business in a State it is doing business therein within the meaning of the due process clause of the Constitution so as to warrant the inference that the corporation has subjected itself to the local jurisdiction. Schoenith, Inc. v. Manufacturing Co., 220 N.C. 390, 17 S.E.2d 350; Commercial Inv. Trust v. Gaines, 193 N.C. 233, 136 S.E. 609; C.T.H. Corporation v. Maxwell, Com'r of Revenue, supra; Parris v. H. G. Fischer & Co., 219 N.C. 292, 13 S.E.2d 540; People's Tobacco Co. v. Am. Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587, Ann.Cas.1918C, 537; International Shoe Co. v. Washington, 66 S.Ct. 154, 90 L.Ed.--; Consolidated Textile Corp. v. Gregory, 289 U.S. 85, 53 S.Ct. 529, 77 L.Ed. 1047; St. Louis S.W. R. Co. v. Alexander, 227 U.S. 218, 33 S.Ct. 245, 57 L.Ed. 486, Ann.Cas.1915B, 77; American Asphalt Roof Corp. v. Shankland, supra.

Whether due process is satisfied must depend upon the quality and nature of the activities in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure, rather than upon a mechanical and quantitative appraisal thereof. International Shoe Co. v. Washington, supra.

Applying these controlling general principles to the uncontroverted facts appearing on the face of this record, it clearly appears that appellant's 'presence' within the State on December 31, 1944 is fully established.

Perhaps no one circumstance is sufficient to sustain the finding of the court below. It is the combination of facts and circumstances en masse that makes out a case of 'doing business' in this State.

The appellant operates what is known as the associate base plan of Southeastern Air Service, Inc.

Prior to September 15, 1944 Corley was employed by the company as a flight instructor at its air bases in States other than North Carolina. Shortly thereafter he began negotiation for leases upon airports located at Marion and Morganton in the State of North Carolina. He consulted with the company in respect thereto and the lease contracts were examined and approved by the company. Thereupon Corley and the company entered into the contract which appears of record 'leasing' certain airplanes to Corley 'to the mutual financial benefit and advantage of both the Company and the Operator.'

It is apparent from a reading of the contract that in preparing it there was a studied and somewhat labored attempt to refute any suggestion of agency or employment which would impose any liability upon the company for the negligence or other dereliction of Corley and to give it the appearance of a simple lessor-lessee agreement. It was necessary, however for the company to impose...