Koppers Co. v. Kaiser Aluminum & Chemical Corp.
| Decision Date | 05 August 1970 |
| Docket Number | No. 7013SC391,7013SC391 |
| Citation | 175 S.E.2d 761,9 N.C.App. 118 |
| Court | North Carolina Court of Appeals |
| Parties | KOPPERS COMPANY, Inc., Plaintiff, v. KAISER ALUMINUM AND CHEMICAL CORPORATION, Defendant, and First Colbert National Bank, Additional Defendant. |
Hogue, Hill & Rowe by C. D. Hogue, Jr., Wilmington, for defendant-appellee Kaiser Aluminum and Chemical Corp.
D. Jack Hooks, Whiteville, for additional defendant First Colbert National Bank.
Appellant is a banking corporation with its principal place of business in the State of Alabama. The only connection it has ever had with the State of North Carolina, insofar as the record shows, arose out of the following:
In October 1967 Kaiser entered a contract with Southeastern Construction and Maintenance Company (Contractor), for the construction of certain railroad sidings at Kaiser's Acme Plant in Columbus County, North Carolina. The contract provided in part: 'Both parties to this contract hereby accepts (sic) the assignment of this contract by the Contractor to the First Colbert National Bank and agrees (sic) that the money to become due and paid to the Contractor, will be paid by check made jointly to the Contractor and the First Colbert National Bank and mailed or delivered by Kaiser Agricultural Chemicals to the First Colbert National Bank in lieu of payment thereof to the said contractor.'
During the performance of the contract, the Contractor defaulted on various accounts arising out of the work performed, including the account owed to Koppers for materials furnished. On 17 July 1968, appellant's president wrote to an official of Kaiser at its Savannah, Georgia location requesting the release of money owed by Kaiser to the Contractor. The letter is as follows:
'Mr. D. R. Martin
130 East Bay Street
Savannah, Georgia 31402
Dear Ray:
Confirming our telephone conversation of July 16, 1968, providing Kaiser releases the $14,000.00 plus check due David Waldrep's plan, (Contractor) Our bank will assist his firm to the fullest extent possible in order to see that all creditors are paid on a basis which we, at present, deem appropriate. Furthermore, our bank will take assignments on other work which his firm has either completed or is in the process of completing and an assignment on all other contracts which he might enter into subsequent to this date in order to assure further payments to the creditors.
The following is a list of known creditors and said proposition to liquidate the indebtedness from the Kaiser check and from another check at Clyco in the approximate amount of $4,300.00 and miscellaneous contracts making up the difference;
Amount First
Creditor Due Liquidation
----------------------- ---------- -----------
L. B. Foster $16,644.37 $10,000.00
Koppers 7,222.79 4,000.00
State of N.C. 1,000.00 1,000.00
J.H. Huffan Contractors 1,200.00 1,200.00
Superior Stone 2,685.85 2,685.85
Hanover 111.10 111.10
Hyman 1,100.00 1,100.00
A.D. Stewart 166.02 166.02
E.G. Dale 99.45 99.45
Konig Hardware 66.00 66.00
Kaiser 2,483.00
Demurge 675.00
Unloading 474.53
Second Third
Creditor Liquidation Liquidation
---------- ----------- -----------
L.B.Foster $ 2,000.00 $ 4,644.37
Koppers 3,222.79
Kaiser 2,483.00
Demurge 675.00
Unloading 474.53
From the records available to our bank the first liquidation would be handled within two weeks from date of receipt of the $14,000.00 check and the $4,300.00 check and other checking funds available. The second liquidation would be handled from the net profits of a contract already signed involving the Reynolds plant here at Sheffield and the third liquidation would have to be handled from contracts which have not yet been awarded. We will monitor the affairs of this company in the very best manner that we can in order to see that the above creditors are satisfied and it might be wise for you to converse with some of these creditors along the lines which we mentioned in our telephone conversation. You may feel free to send a copy of this letter to anyone you deem necessary. David Waldrep is a fine, hard working and honest young man and we are doing all we can to see him through. Your cooperation in the matter is greatly appreciated.
Very truly yours,
s/ F. E. Draper
F. E. Draper'
In response to the above letter, and in reliance upon the representations contained therein, Kaiser released to appellant the sum of $14,375.13, being the final amount owed by Kaiser to the Contractor.
Based on evidence of the transactions set forth above, the court found facts and concluded that the cross action asserted against appellant arose out of a contract having a substantial connection with the State of North Carolina and to be performed to a substantial degree within the State, and that appellant is subject to suit in this State under the terms and provisions of G.S. § 55--145.
At no time has it been contended that appellant is subject to the jurisdiction of this State as a result of having transacted business here within the meaning of G.S. § 55--144. Nor has it been contended that appellant is properly before the court as a result of engaging in any activities delineated in G.S. § 55--145, other than those specified in subparagraph (a)(1) thereof. Therefore, the only statutory provision pertinent to this appeal is G.S. § 55--145(a)(1) which provides as follows:
'(a) Every foreign corporation shall be subject to suit in this State, by a resident of this State or by a person having a usual place of business in this State, whether or not such foreign corporation is transacting or has transacted business in this State and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows:
(1) Out of any contract made in this State or to be performed in this State; * * *'
The initial question is whether the cross action asserted by Kaiser arises 'out of any contract made in this State or to be performed in this State' within the meaning of G.S. § 55--145(a)(1). Since there was no evidence presented and no finding made that any contract forming the basis of this litigation was made in North Carolina, our inquiry is limited to the issue of 'performance within this State.'
We first look to the contract between Kaiser and the Contractor. This contract was to be substantially performed in this State within the meaning of the interpretation placed on G.S. § 55--145(a)(1) by previous decisions. Byham v. National Cibo House Corp., 265 N.C. 50, 143 S.E.2d 225; Crabtree v. Coats & Burchard Co., 7 N.C.App. 624, 173 S.E.2d 473. Conceding, however, that the contact provided by the contract between the Contractor and this State was sufficient to subject the Contractor to the jurisdiction of this State's courts, it does not follow that it would bring appellant, as assignee of the proceeds thereunder, within their jurisdiction. We think it clear that the operation of G.S. § 55--145(a)(1) is limited to situations where the foreign defendant against whom a cause of action is asserted is a party to the contract forming the basis of jurisdiction. 'It is a general principle that an assignment of a contract does not operate to cast upon the assignee the duties and obligations or the liabilities imposed by the contract on the assignor, in the absence of the assignee's assumption of such liabilities.' 6 Am.Jur.2d, Assignments, § 109. Appellant was not a party to the contract between Kaiser and the Contractor. Under the terms of that contract appellant incurred no obligation to Kaiser and had no duties to perform. In our opinion that contract affords no basis for jurisdiction.
We turn now to the relationship initiated between Kaiser and appellant by appellant's letter. Some of the language contained in the letter is obviously illusory. In one sense it can be argued that the...
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