Hill v. Electronics Corp. of America

• Decision Date: 06 February 1962
• Docket Number: No. 50395,50395
• Citation: 113 N.W.2d 313,253 Iowa 581
• Parties: Quentin Jarvis HILL, Appellant, v. ELECTRONICS CORPORATION OF AMERICA and The Partlow Corporation, Appellees.
• Court: Iowa Supreme Court

Page 313

113 N.W.2d 313

253 Iowa 581

Quentin Jarvis HILL, Appellant, v. ELECTRONICS CORPORATION OF AMERICA and The Partlow Corporation, Appellees.

No. 50395.

Supreme Court of Iowa.

Feb. 6, 1962.

Dickinson, Throckmorton, Parker, Mannheimer & Raife, Des Moines, for appellant.

Parrish, Guthrie, Colflesh & O'Brien, Des Moines, for appellee Electronics Corp. of America.

Jones & Hoffmann, Des Moines, for appellee The Partlow Corp.

GARFIELD, Chief Justice.

The question presented is whether the district court of Polk County, Iowa, obtained jurisdiction over two foreign corporation-defendants by service of notice upon the secretary of state. The Polk County court held jurisdiction was not thereby obtained and sustained the special appearances of these defendants. Plaintiff has appealed.

Plaintiff Hill's petition alleges he was injured May 4, 1959, by the explosion of a boiler in a plant of the Meredith Publishing Company (herein called Meredith), in Des Moines, Iowa, where he was employed; that defendants Electronics Corporation of America and Partlow Corporation (herein called Electronics and Partlow) manufactured certain parts of the electrical control system for the boiler; the explosion was caused by the negligence of these and other defendants. One count of the petition states plaintiff relies on the doctrine of res ipsa loquitur. Another count alleges specific negligence of each of these defendants in manufacturing, supplying and installing the devices for the control system and failing to warn they were dangerous.

Plaintiff's petition also states Electronics is a Massachusetts corporation with its principal place of business at Cambridge, that state; Partlow is a foreign corporation with its principal place of business at New Hartford, N. Y.; neither defendant is authorized to do business in Iowa; 'said defendants transact business in Iowa without a certificate of authority and are therefore deemed to have appointed the Secretary of State their attorney for service of process.'

On the day the petition was filed the sheriff of Polk County delivered the original notice of the action addressed to the defendants, to the secretary of state.

Electronics' special appearance, filed pursuant to rules 66 and 104(a), Rules of Civil Procedure, 58 I.C.A., alleges it is a Massachusetts corporation not qualified to do business in Iowa, without permit to do so, it has not done business in Iowa, has no office or other place of business here, is not subject to service of original notice here, and the secretary of state is not authorized by law to receive such notice in this action.

Partlow's special appearance asserts it is not licensed to do, and is not doing, any business in Iowa so as to be amenable to process here. An attached affidavit states Partlow has never had any office, agency or business in Iowa nor was it registered or licensed to do business here, its only dealings concerning Iowa are that its products are sometimes incorporated in equipment shipped into or assembled in Iowa by contractors and others operating here, all such dealings are solely in interstate commerce.

Pursuant to stipulation a hearing was had before the court on these special appearances. The stipulation recites both defendants are foreign corporations, not authorized to do business in Iowa, 'and both have been served with notice under Section 120, Chapter 321, Laws of the 1958 Code of Iowa [I.C.A. § 496A.120], by service upon the Secretary of State as service upon foreign corporations doing business in Iowa.' It seems clear the words we have italicized were intended to be 'Laws of the 58th General Assembly of Iowa.' Code section 321.120 (in Code chapter 321) refers to a wholly unrelated matter.

At the hearing plaintiff's counsel offered testimony of Mr. Wilder and Mr. Daubert, sales engineer and president respectively, of Deco Engineering Products Corporation (herein called Deco), an Iowa corporation located in Des Moines. From this evidence it appears Deco since April 1, 1958, has been the distributor in Iowa, Nebraska and Rock Island County, Illinois, of products of the combustion control division of Electronics, and since January 1, 1956, has been sole sales representative in Iowa and Nebraska for Partlow. However, it is also shown Deco had nothing to do with any part installed in the boiler which exploded at the Meredith plant. We understand the boiler was made in Cleveland, Ohio, and the alleged defective parts furnished by these defendants were ordered from and shipped to Cleveland and there installed in the boiler or electrical control system therefor.

I. Plaintiff-appellant assigns one error as to each specially appearing defendant--in sustaining its special appearance 'for the reason it was transacting business in Iowa without a certificate of authority and thereby is deemed to have appointed the Secretary of State its attorney for service of process.'

Plaintiff opens its printed argument by quoting the last sentence of section 120, chapter 321, Laws of the 58th General Assembly, known as the Iowa Business Corporation Act: 'If any foreign corporation shall transact business in this state without a certificate of authority, it shall by transacting such business be deemed thereby to have appointed the secretary of state its attorney for service of process.' This quotation is followed by the assertion: 'The only question on this appeal is whether these foreign corporations transacted business in Iowa without a certificate of authority and thereby appointed the secretary of state their agent for service of process.'

Chapter 321, Laws of the 58th General Assembly, took effect July 4, 1959 (section 3.7, Code 1958, I.C.A.), two months after the boiler exploded at the Meredith plant. Defendants argue section 120 of the chapter operates prospectively, not retrospectively, and does not apply to the present action. They also say that if chapter 321 does apply here, section 103, I.C.A. § 496A.103 thereof provides in effect that doing what they did 'shall not be considered to be transacting business in this state, for the purposes of this Act * * *.'

Plaintiff's reply argument asserts that if chapter 321 of the 58th General Assembly does not apply to the present action the district court could acquire jurisdiction of these defendants under section 494.2, Code 1958, I.C.A., by the service made upon the secretary of state. So far as shown, this is the first indication that plaintiff's claim the court acquired jurisdiction of these defendants by service on the secretary of state was not bottomed on section 120, chapter 321, Laws 58th General Assembly.

II. It seems to us plaintiff is not in position to contend for the first time in his reply argument here that section 120, chapter 321, Laws of the 58th General Assembly, does not apply to the present case or that service of notice upon these defendants, through the secretary of state, was not under this section. This contention was not raised in the district court nor in the opening brief here and is quite inconsistent with the position there taken. It is an apparent attempt by plaintiff to mend his hold here.

We have many times declined to consider a contention an appellant did not raise in the trial court. Harlan Production Credit Ass'n v. Schroeder Elevator Co., and citations, Iowa, 112 N.W.2d 320, 323. We therefore assume, without so holding on the merits of the proposition, that section 120, chapter 321, 58th General Assembly, applies to the present case and service of notice on these defendants was pursuant thereto. As we have tried to explain, this accords with plaintiff's position before his reply brief was filed.

III. Another section of chapter 321, Laws 58th General Assembly, applies to the present case as clearly as section 120 does. We refer to section 103. It states in part: 'Without excluding other activities which may not constitute transacting business in this state, a foreign corporation shall not be considered to be transacting business in this state, for the purposes of this Act, by reason of carrying on in this state any one or more of the following activities: * * * (Emphasis added.)

'5. Effecting sales through independent contractors.

'6. Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance without this state before becoming binding contracts. * * *

'9. Transacting any business in interstate commerce.'

Under this section neither of these defendants has at any time transacted business in Iowa for the purposes of chapter 321. Deco was not more than an independent contractor in effecting sales of their products. It purchased products of Electronics and resold them in the designated territory. Deco sent orders to Partlow in New York for its products which, if accepted, Partlow shipped direct to the purchaser without passing through Deco's hands. Partlow billed the customer direct. A representative of Electronics visited Deco two or three times a year to consult on sales problems and stimulate sales. Deco represented 30 to 40 manufacturers in all.

Plaintiff argues section 103 of chapter 321 was not intended to lay down tests as to what shall be considered transacting business in this state for the purpose of amenability to process but was designed merely to state activities not considered transacting business for the purpose of requiring a certificate of authority to do business here. We cannot accept this construction of section 103. It lists activities which 'shall not be considered to be transacting business in this state, for the purposes of this Act,' not merely for the single purpose of requiring a...