King Homes, Inc. v. Roberts

• Decision Date: 12 August 1970
• Docket Number: 8 Div. 25
• Citation: 46 Ala.App. 257,240 So.2d 679
• Parties: KING HOMES, INCORPORATED v. Robert W. ROBERTS and Bessie Roberts.
• Court: Alabama Court of Civil Appeals

Page 679

240 So.2d 679

46 Ala.App. 257

KING HOMES, INCORPORATED v. Robert W. ROBERTS and Bessie Roberts.

8 Div. 25.

Court of Civil Appeals of Alabama.

Aug. 12, 1970.

Rehearing Denied Sept. 9, 1970.

Ford, Caldwell, Ford & Payne, Robert L. Hodges, Huntsville, for appellant

Smith, Lammons & Weaver, Huntsville, for appellees.

WRIGHT, Judge.

Appellees, Mr. and Mrs. Roberts, filed suit in the Circuit Court of Madison County, Alabama, against appellant, King Homes, Incorporated. The complaint was in three counts. Count 1 for breach of warranty. Count 2 for misrepresentation and count 3 for negligent repair.

Appellant is a non-resident corporation, not qualified to do business in Alabama, nor does it have an appointed agent for service. Its principal place of business is in Elkhart, Indiana, where it is engaged in manufacturing mobile homes. Service of summons and complaint was obtained through the Alabama Secretary of State under the provisions of Title 7, Section 199(1), Code of Alabama 1940 as amended. Affidavit was made by appellees that appellant had performed work and services in this State, out of which a cause of action had arisen.

Appellant filed motion to quash service and a plea in abatement challenging the jurisdiction of the court on the ground that it was a non-resident corporation, not qualified to do business in Alabama, and alleging it had not done business nor performed work or service in the state. Upon hearing, the plea in abatement was denied by the court. Demurrer to the complaint and each count was filed, the complaint was amended and demurrer refiled. Demurrer was overruled. Answer and pleas were filed by appellant. Demurrer to some of the pleas was sustained, and overruled as to others. Issue was joined on the remaining pleas with replication filed to one plea.

Trial was held on January 8, 1969 before the judge, sitting without a jury, and a general judgment entered for plaintiff-appellees with damages assessed at $3,709.50. Motion for new trial was duly filed and the same denied by the court on June 11, 1969. This appeal followed.

The evidence tends to show that appellees, in the spring of 1965, went to the place of business of Perrylandings, Inc., located in Decatur, Alabama, for the purpose of buying a mobile home. After some negotiations with this company through its manager, B. R. Landers, a trade was accomplished whereby Perrylandings Sale of the home was subsequently made by Perrylandings to appellees by contract after oral assurance from appellant that observed shortages and deficiencies would be corrected.

agreed to sell appellees a mobile home to be ordered from and constructed by King Homes, Inc. of Elkhart, Indiana. The order, a mobile home to be manufactured by appellants in accordance with specifications requested by Perrylandings, was placed by phone by Mr. Landers with appellant's sales manager in Elkhart. After completion, delivery was made to the lot of Perrylandings in Decatur via transport provided by appellant. Upon arrival in Decatur the home was inspected by Perrylandings and accepted by them with notation of certain deficiencies. Title was transferred to Perrylandings and payment of manufacturer's cost, plus cost of transport, was made by Perrylandings to appellant.

The observed shortages and deficiencies at the time of delivery to Perrylandings were that some floor molding was broken and missing, and the type of over and exterior door were different than allegedly ordered.

Perrylandings, after sale to appellees, transported the home to the lot of appellees and installed it. Installation required 'blocking' or leveling and placement of supports underneath the chassis, connecting water, sewer and power lines. Installation was a part of the sales contract between Perrylandings and appellees. A part of installation required the opening and setting of a 'tip out' portion of the home. The 'tip out' folds into the home while it is being transported. It was determined that the 'tip out' did not work properly at this time and could not be unfolded without use of force.

Complaint of deficiencies and malfunction was made by appellees to Perrylandings, and by Perrylandings to appellant by phone and letter. A written warranty against defects in materials and quality of workmanship was extended by appellant and was in a drawer in the home when delivered to appellees. A card, returnable to appellant, was detached from the warranty and mailed by appellees as directed.

Some six weeks after delivery to appellees, or in September 1965, an employee of appellant appeared with a new over which, with assistance from an employee of Perrylandings, he proceeded to install. He also re-blocked the home. After the re-blocking by appellant's employee, other problems appeared, such as warping of doors and walls, splitting of doors and walls, and rain leaked into the interior.

In October 1965, another employee of appellant arrived and attempted other repairs without improvement, but with added adverse results. With the onset of winter, certain pipes in the home froze and burst and the home could not be heated properly.

In February 1966, another employee of appellant appeared and attempted repairs but was not successful in remedying any of the problems. It was also found that an opening for an air circulation vent was not installed.

Suit was filed on December 5, 1966. There was evidence that other attempts at repair were made in August 1967.

Appellant's first argued assignments of error are assignments 1 and 2. They are argued together, and present the contention that error was committed by the overruling of appellant's plea in abatement.

The essence of the plea was that the court had no jurisdiction over the appellant to render an in personam judgment against it. This contention is based upon the proposition that appellant was a non-resident corporation, not qualified to do business in this state and without an appointed agent for service. It is argued that the evidence shows that appellant did not have sufficient nexus with the state We think the evidence, is clear that the appellant is a non-resident, non-qualified corporation. It did not have an appointed statutory agent for service of process in this state. (Title 7, Section 192, Code of Alabama 1940, as amended). It had no resident agent or employee in Alabama who regularly and systematically conducted transactions for it. The relationship of appellant and Perrylandings was described as a 'dealership,' however, it was undisputed that Perrylandings purchased mobile homes from appellant and resold them to its customers. Perrylandings was free to sell any other mobile homes it wished. There was no requirement that it sell or not sell appellant's products. Orders were placed by phone from Perrylandings to appellant's plant in Indiana. Delivery was made by appellant's truck to Perrylandings in Decatur and title passed. Perrylandings was free to sell at any price it wished. Appellant paid nothing to Perrylandings and received nothing from it other than the invoice price on the mobile home, plus cost of transport.

for it to be subject to the jurisdiction of the courts of the state in an in personam action.

The only contact between appellant and Perrylandings was by phone or letter and the drivers who made delivery. It is clear that the relationship of Perrylandings, Inc. to appellant was that of an independent contractor.

Service of process was obtained upon appellant under the provisions of Title 7, Section 199(1), Code of Alabama 1940, as amended. The pertinent parts of that statute are as follows:

' § 199(1) Service on nonresident doing business or performing work or service in state.--Any nonresident 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 shall do any business or perform any character of work or service in this state shall, by the doing of such business or the performing of such work, or services, be deemed to have appointed the secretary of state, or his successor or successors in office, to be the true and lawful attorney or agent of such non-resident, upon whom process may be served in any action accrued or accruing from the doing of such business, or the performing of such work, or service, or as in incident thereto, by any such nonresident, or his, its or their agent, servant or employee * * *'

The courts of this state and the Supreme Court of the United States have declared the provisions of this statute as to substituted service to be clearly sufficient to meet the requirements of due process. New York Times v. Sullivan, 273 Ala. 656, 144 So.2d 25; 371 U.S. 946, 83 S.Ct. 510; 9 L.Ed.2d 496. The cited cases have made clear that the provisions in the statute as to 'doing business' is a judicial question to be resolved by the existing facts in each case.

We shall now proceed to consider the question of whether appellant, under the facts of this case, was 'doing business' in Alabama to sufficient extent to subject it to the jurisdiction of the courts of this state.

The power of a state court to enter binding judgments against persons or corporations not served with process within their boundaries, or without voluntary defense, has been considered by many courts since the case of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565.

Pennoyer first applied the due process clause of the Fourteenth Amendment to such judgments, thus limiting the power of a state court to render judgment against non-resident defendants without personal service. Though holding that judgment in personam, without personal service upon the defendant was not binding because of lack of due process under the facts of that particular case, the court '* * * Neither do we mean to assert that a State may not require a non-resident entering into a partnership or association within its limits, or making contracts enforceable there, to...