Lone Star Package Car Co. v. Baltimore & OR Co.
| Decision Date | 15 April 1954 |
| Docket Number | No. 14336.,14336. |
| Parties | LONE STAR PACKAGE CAR CO., Inc. v. BALTIMORE & O. R. CO. et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Malcolm R. Wilkey, Houston, Tex., Norman S. Rein, New York City, Rein, Mound & Cotton, New York City, Frank J. Knapp, Percy Don Williams, Butler, Binion, Rice & Cook, Houston, Tex., of counsel, for appellant.
Elmore H. Borchers, Laredo, Tex., Palmer Hutcheson, Jr., M. S. McCorquodale, Houston, Tex., Frank H. Cole, Jr., Cincinnati, Ohio, Hutcheson, Taliaferro & Hutcheson, Houston, Tex., of counsel, for appellees.
Before HOLMES, RUSSELL and RIVES, Circuit Judges.
The questions to be decided are whether a third party complaint was properly served on the Baltimore and Ohio Railroad Company, whether the district court acquired jurisdiction of that company, and whether the venue was properly laid.
The original action was brought in the district court by Insurance Company of North America, a Pennsylvania corporation, against Lone Star Package Car Company, Inc., a Texas Corporation,1 to recover for damages occurring to a shipment of machinery made from Philadelphia, Pennsylvania to Laredo, Texas, and for damages occurring on the return shipment from Laredo to Philadelphia. Insurance Company is subrogated to the rights of one Mauricio Atri, a citizen of Mexico, owner of the machinery, who is not a party to the suit. Lone Star, a freight forwarder, delivered to the shipper its bill of lading for the goods.
The original complaint was brought both as a common law action for damages with jurisdiction based on diversity of citizenship, and as an action under the Carmack Amendment, 49 U.S.C.A. § 20 (11). Lone Star filed a third party complaint against B. & O. and Texas Mexican for any sums awarded Insurance Company. According to the Marshal's return, service of process was had on L. W. Land, Southwestern Freight Representative of the B. & O. in Dallas, and on D. E. Barcus, District Freight Representative of the B. & O. in Houston. B. & O., the third party defendant, moved to quash the return of service of the summons, to abate the third party action for improper venue, and to dismiss such action for lack of jurisdiction over the third party defendant, all based on the ground that the B. & O. was a foreign corporation not residing nor doing business in the judicial district nor in the State of Texas.
The trial court dismissed the third party action against B. & O. on the ground "that this Court does not have jurisdiction over said, The Baltimore & Ohio Railroad Company, a foreign corporation, and that it is not a resident or inhabitant of the State of Texas nor of this judicial district, nor is it doing business in either said state or district of such nature as to subject it to the jurisdiction of this Court in the instant case." From the order dismissing B. & O. as a third party defendant, Lone Star prosecutes this appeal.
The original shipper delivered the machinery in question to Lone Star and received its bill of lading for transportation of the same from Philadelphia, Pennsylvania, to Laredo, Texas. B. & O. received the shipment from Lone Star at Philadelphia and undertook to transport it to St. Louis, Missouri, issuing therefor its bill of lading to that point, where it agreed to deliver the goods to Lone Star. Carriage from St. Louis to the south began with the Frisco Lines, which received the machinery from Lone Star. The Frisco and Texas Mexican transported the machinery to Laredo where damage was discovered. Following discovery of damage, the delivering carrier, Texas Mexican, arranged for return of the machinery free of charge to the shipper in care of the originating carrier, B. & O., in Philadelphia in accordance with railroad custom, this returning shipment on through bill of lading originating on the Texas Mexican and traveling via Southern Pacific, Frisco, and ultimately the B. & O. During the course of transit from Laredo to Philadelphia further damage occurred to the machinery.
As shown by the affidavits of L. W. Land, Southwestern Freight Agent of the B. & O. with office at Dallas, and D. E. Barcus, District Freight Representative with office in Houston, the B. & O. is a Maryland corporation having no permit to do business in Texas and doing no business therein except such business as may be done by Mr. Land's and Mr. Barcus' offices. The lines of the B. & O. do not come west of St. Louis or south of Kentucky. As Southwestern Freight Agent of the B. & O. in Dallas, Land's territory embraces most of Texas and half of Old Mexico. Operating under him are the Houston District office and one individual stationed at San Antonio, although no office is maintained at San Antonio. Dallas offices consist of four rooms and have been occupied continuously for over twenty years. In Houston the B. & O. emblem with the words "Traffic Department" appear on the door of its three room suite in the Bankers Mortgage Building.
Land in Dallas and Barcus in Houston, and the B. & O. employees serving under them, solicit traffic from and to points within the State of Texas which can be moved on the B. & O. They receive and process complaints of delay and nondelivery in Texas. If a shipment is damaged in transit coming into Texas, they talk to the consignee about it, but persuade him to see the delivering carrier. If the shipment originates in Texas, they use their teletype linkage with the B. & O. system to have an investigation made by the B. & O. as to the damage in transit and deal with the customer directly on it. If a shipment is misplaced or lost, they start at the source of the shipment and trace the movement from point to point, and notify either the shipper or the consignee in Texas where the delay occurred. The B. & O. operates what is known as a "Sentinel Service", whereby the shipment can be monitored along the entire route, and the B. & O. representatives can inform consignee or shipper exactly where his car is and where it is going at all times. About ten shippers or receivers a day call the Dallas office tracing shipments.
The B. & O. representatives personally make no rate calculations or adjustments, but refer them to the Baltimore office. They do make investigations of rate complaint cases, make personal calls on the customers and try to make sure that the customer is satisfied. In the case of damaged goods belonging to a Texas shipper, the B. & O. representatives instruct him "to file his claim and I will help him collect it." The Texas B. & O. representative follows through on the claim adjustment and settlement, and on claims of some of the more valued customers, the B. & O. representatives personally take him the checks in settlement of the claim. The duties of the Houston office in regard to the matters mentioned are the same as the Dallas Office.
The B. & O. representatives prepare a monthly situation letter analyzing business conditions from the standpoint of B. & O. business in Texas in accordance with instructions from the home office. They also prepare special reports from time to time concerning some industry the B. & O. has under study. As part of their service to customers, the B. & O. representatives in Texas sometimes work up special pamphlets for shippers in various industries, putting together all of the information needed for their particular problems.
Managing officials of the B. & O. make quarterly visits to Dallas and other parts of Texas, staying a week at a time in the Dallas area, and make their headquarters in the Dallas office while there. These officials also come to Houston. The purpose of these visits is to contact all customers, shippers or consignees, with whom the B. & O. does business. Land makes it a point to take them to the dissatisfied customers first, to help satisfy and smooth over complaints. These officials make an investigation of some of these complaints on the spot.
The average telephone bill of the Dallas office is $100 per month, but the greater part of the communications are carried on by telegraph and teletype. The teletype system is used quite extensively, and handles a great variety as well as volume of messages. There are two machines, both being sending and receiving, in the Dallas office. One operates on a line leased from Western Union by the B. & O., and connects B. & O. offices in Tulsa, Kansas City, Houston, Dallas and St. Louis. Through St. Louis the Dallas and Houston offices are thus linked with the entire B. & O. system. The other teletype machine is connected with the normal commercial circuits of Western Union.
The Dallas office has five freight employees and three passenger employees, with a total monthly payroll of $3,100. There are five employees in the Houston offices with a total payroll of approximately $1,900 a month. All employees are paid by check from the Baltimore offices of the B. & O., and the same is true for employees in St. Louis and throughout the system. The Texas offices of the B. & O. do not handle any money of the company. Some employees have expense accounts and two automobiles are furnished to the traveling freight representatives. All personnel required to travel have railroad passes good over lines in Texas corresponding to their territory. All employees are covered by the B. & O. pension plan. Stationery and office supplies are furnished on requisition from Baltimore, but office furniture is frequently bought locally and so are automobiles.
Advertising in Texas is not handled through any of the B. & O. local offices but is handled by the advertising department in Baltimore. Land receives notices from the B. & O. main office whenever advertising is run in any one of several national magazines, mostly trade in character. The same is true of advertising in local newspapers. The Dallas office itself has a mailing list for advertising calendars, which are mailed out from there.
Passenger service procedure is handled by the B. &...
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