Long v. Victor Products Corporation

• Decision Date: 22 January 1962
• Docket Number: No. 16780.,16780.
• Citation: 297 F.2d 577
• Parties: Chas. D. LONG and Samuel H. Liberman, Trustees, and Paul E. Hord and Jane S. Hord, Appellants, v. VICTOR PRODUCTS CORPORATION, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

297 F.2d 577 (1961)

Chas. D. LONG and Samuel H. Liberman, Trustees, and Paul E. Hord and Jane S. Hord, Appellants, v. VICTOR PRODUCTS CORPORATION, a Corporation, Appellee.

No. 16780.

United States Court of Appeals Eighth Circuit.

December 27, 1961.

Rehearing Denied January 22, 1962.

Robert H. Batts, St. Louis, Mo., for appellants. Rassieur, Long & Yawitz, St. Louis, Mo., were with him on the brief.

Robert E. Keaney, St. Louis, Mo., for appellee. Moser, Marsalek, Carpenter, Cleary, Jaeckel & Hamilton and William T. King and Dulin & King, St. Louis, Mo., were with him on the brief.

Before VOGEL, VAN OOSTERHOUT and BLACKMUN, Circuit Judges.

BLACKMUN, Circuit Judge.

This is an appeal from the dismissal of the plaintiffs' complaint on the ground of lack of jurisdiction over the defendant in the Eastern District of Missouri.

The plaintiffs are individual citizens of Missouri. The defendant is a Maryland corporation not formally authorized to do business in Missouri. Paul E. Hord, one of the plaintiffs, on November 30, 1959, executed a contract in Maryland with the defendant. A month later Hord executed, also in Maryland, an assignment of certain cash sums due or to become due to him under that contract. This assignment ran in favor of Chas. D. Long and Samuel H. Liberman, as trustees for Jane S. Hord. The defendant consented to this assignment in writing in Maryland.

The present action is one by Hord, his assignees, and the trust beneficiary. They seek a judgment for an amount claimed to be due under the contract and for damages for failure to perform the contract; they also seek related injunctive relief.

The action was begun in federal court and is not one removed from a state court.¹ Service of the summons and complaint in the action was effected by the United States Marshal on R. J. Funkhouser and Roy Small, Chairman of the Board and a Vice President, respectively, of the defendant corporation, while they were at the Chase Hotel in St. Louis, Missouri, on October 20, 1960.

After the institution of the action, the plaintiffs served interrogatories upon the defendant by mail. Before answering, the defendant moved to dismiss the action for lack of jurisdiction over it and to quash the service. A little later on the same day the defendant filed objections to some of the interrogatories and moved to extend the time for filing answers to the remaining ones. Time was allowed. Answers to the unoffensive interrogatories were filed. The hearing on the motion to dismiss then took place. At that hearing the plaintiffs withdrew those interrogatories to which objections had been made.

In the trial court the plaintiffs argued that the defendant was engaged in activities in the Eastern District of Missouri, sufficient to subject it to judicial process there and that, in any event, the defendant waived its objections to jurisdiction by the filing of its motion for additional time in which to answer interrogatories. Both issues were decided adversely to the plaintiffs. Waiver does not appear to be urged on this appeal.²

The answers to the interrogatories and the other evidence presented at the hearing on the motion to dismiss revealed the following:

1. The defendant is engaged in the manufacture of refrigeration equipment. Its main plant is at Hagerstown, Maryland. It has one other at Berkeley Springs, West Virginia.

2. In addition to Maryland, the defendant has certificates of authority to do business in West Virginia and Pennsylvania.

3. The defendant has no certificate of authority to do business in Missouri and has received no request from Missouri to obtain one.

4. The defendant has salesmen who solicit orders in the field throughout the United States. These orders are sent to Hagerstown for acceptance or rejection. If an order is accepted, shipment is made f.o.b. Hagerstown or Berkeley Springs, as the case may be.

5. The defendant has one such salesman, James F. Purcell, in Missouri. He resides at Springfield and has the title of district sales manager. His territory consists of Missouri, six other states, and northern Michigan. He solicits orders in each of those states. He does not have authority to bind the defendant by contract. He does not service any of the defendant's products.

6. Purcell's compensation is on a commission basis. He is paid from Maryland. His instructions emanate from Maryland.

7. The defendant does not maintain an office, warehouse, or stock of goods in Missouri. It has no telephone, bank account, registered agent, or registered office there. It neither owns nor rents Missouri real estate. It maintains no permanent display or exhibit room in that state. It has paid no taxes to the State of Missouri.

8. The defendant employs no serviceman or mechanic who does work in Missouri. It does warrant the parts of its products. Replacement is effected at the factory at Hagerstown with the understanding that the defective part is shipped there freight paid.

9. The defendant sold and shipped products to forty purchasers in St. Louis and other Missouri points within the two years preceding December 9, 1960. These shipments were made upon orders mailed or telephoned to the defendant or sent in to it by Purcell.

10. The defendant displayed certain of its manufactured refrigeration products at four separate meetings, all in St. Louis, in the period from October 1958 through October 1960. Specifically, these were the Seven-Up International Convention, October 9-11, 1958; the International Soft Drink Exposition, November 16-19, 1959; the Dr. Pepper Regional meeting, November 20-21, 1959; and the Seven-Up International Developers meeting, October 21-22, 1960. Purcell and a number of high ranking officers and sales representatives of the defendant attended those meetings. Except for Purcell, all these men came from outside Missouri.

11. The October 1960 meeting was a convention at the Chase Hotel of Seven-Up bottlers or "developers". It was arranged and sponsored by the Seven-Up Company for those developers. About fifty exhibitors also attended. Their attendance was by invitation. The defendant was invited because it was a manufacturer of approved products on which the display of the Seven-Up trademark and slogans was authorized. The defendant did not pay for the exhibit space it occupied; that cost was borne by the Seven-Up Company. The defendant paid the cost of transporting its products to the exhibit area.

12. The particular units which were on display at the meeting in October 1960 were sold at that convention to seven separate purchasers from states outside Missouri. Those units were shipped to the buyers direct from the hotel instead of being first returned to the factory. These sales did not require approval from Maryland. Invoices for the sales then issued from Hagerstown. Similar sales could have been made at the earlier meetings.

13. The defendant had an exhibit at the 1958 Seven-Up Convention in St. Louis. That also was by invitation and the Seven-Up Company bore the expense of the exhibit area.

14. At the 1960 meeting, Small himself was in attendance at the defendant's booth, described and priced the units on display, had in evidence two rather elaborate sales brochures bearing the legend "Prepared especially for Seven-Up Developers" and describing and illustrating the defendant's products with Seven-Up designations, and made at least one reference to a "prospective customer" in his remarks to visitors.

15. The presence of Funkhouser and Small in St. Louis in October 1960 was not in connection with the contract and assignment which are the subject matter of the present action.

16. The purpose of the defendant's representatives attending the four St. Louis meetings was to give bottlers the opportunity to see examples of the defendant's products and to promote their sale.

The plaintiffs bottom their claim of jurisdiction here primarily on 28 U.S. C.A. § 1391(c).³ This is the venue statute which authorizes a suit against a corporation in the judicial district where it "is doing business". Consideration of the question whether this defendant was doing business in the Eastern District of Missouri so as to subject it there to service of process leads us at once, and as usual, to the general tests prescribed by the Supreme Court in International Shoe Co. v. State of Washington, 1945, 326 U.S. 310, 316-318, 66 S.Ct. 154, 158, 90 L.Ed. 95: minimum contacts with the forum so that maintenance of the suit is reasonable and does not offend "traditional notions of fair play and substantial justice", or activities which are not only continuous and systematic but which give rise to the liability sued on, or continuous corporate operations within the state so substantial as to justify suit against it there on causes of action arising from dealings distinct from those activities. The court specifically said, p. 319 of 326 U.S., p. 159 of 66 S.Ct.:

"It is evident that the criteria by which we mark the boundary line between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has seen fit to procure through its agents in another state, is a little more or a little less. * * * Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure."

It then went on to emphasize, p. 320, 66 S.Ct. 154, for that particular case (a) the corporation's systematic and continuous activities over a period; (b) their result in a large volume of interstate business; (c) the corporation's receipt of the benefits and protection of the laws of the state; (d) the fact that the obligation sued upon arose out of those very activities; and (e) that the enforcement of the...