Morrow v. Caloric Appliance Corp.

• Decision Date: 11 November 1963
• Docket Number: No. 49885,49885
• Parties: Richard H. MORROW and Pearl Morrow, his Wife, Respondents, v. CALORIC APPLIANCE CORPORATION, a Corporation, Appellant.
• Court: Missouri Supreme Court

Page 41

372 S.W.2d 41

Richard H. MORROW and Pearl Morrow, his Wife, Respondents, v. CALORIC APPLIANCE CORPORATION, a Corporation, Appellant.

No. 49885.

Supreme Court of Missouri, En Banc.

Nov. 11, 1963.

Blanton & Blanton, David E. Blanton, Sikeston, for appellant.

W. Clifton Banta, Charleston, for respondents.

HOLLINGSWORTH, Judge.

A fire in August, 1959, allegedly caused by a defective gas range, destroyed personal property owned by Mr. and Mrs. Richard Morrow. A jury awarded them $3,750 as damages against Caloric Appliance Corporation, the manufacturer of the stove. Caloric appealed to the Springfield Court of Appeals on grounds that the amount in dispute vested it with jurisdiction of the appeal. That court correctly transferred the cause here on the ground that exclusive appellate jurisdiction was in this court in that a question involving construction of the due process provisions of the United States Constitution had been properly raised and preserved on appeal by appellant. See Morrow v. Caloric Appliance Corporation, Mo.App., 362 S.W.2d 282.

Appellant's motion to quash the summons and service or, in the alternative, to dismiss plaintiffs' action for want of jurisdiction, based upon the aforesaid constitutional grounds, was overruled. Appellant asserts reversible error as to the ruling of the court in that respect.

The case thereupon went to trial on the merits. The Morrows, who had purchased the stove from a dealer at East Prairie, Missouri, submitted their case on the sole theory that the manufacturer impliedly warranted the stove to be reasonably fit and suitable for domestic use as a gas range. Appellant contends that the trial court erred in failing to direct a verdict for it at the close of all the evidence for the reason that in the absence of privity of contract there was no implied warranty by the manufacturer. It also contends that the trial court erred in giving and refusing certain instructions.

We are of the view that, subject to the jurisdictional contentions made by appellant, respondents were entitled to submit their case against Caloric on implied warranty. It is necessary, therefore, that we first determine whether the Circuit Court of Scott County had jurisdiction of appellant or, conversely, whether that court's exercise of jurisdiction over it constituted a denial of appellant's constitutionally guaranteed right of due process.

Appellant is a foreign corporation, not licensed to do business in Missouri and with no duly designated agent to act for it. Service of process was attempted or accomplished by serving 'Walter L. Vocke, Agent of the within named corporation.' Appellant, appearing specially, filed its amended motion to quash the summons and service or to dismiss, averring therein and contending here that as a foreign corporation not licensed to do business and not 'doing business' in Missouri and not having appointed a registered agent or an agent for service of process in this state, the assertion of jurisdiction over defendant violated the Fourteenth Amendment to the United States Constitution.

Whether Caloric was amenable to personal service in this state so as to authorize the rendition of a general judgment against it depends upon whether it was 'doing business' in Missouri. The hearing on its motion developed these facts relevant to that question.

Walter L. Vocke, called as a witness in behalf of appellant, testified: He was in business for himself as a manufacturer's representative and the operator of a service agency, servicing, in the main, Caloric appliances. Since 1941 he had represented various companies including Caloric Appliance Corporation located in Topton, Pennsylvania, which manufactures gas ranges and accessories; that for the past ten or twelve years he had represented only Caloric (although his contract with it permitted other noncompetitive representations) in an exclusive territory covering the area within a radius of 150 miles of St. Louis. His office (for which he paid the rent) was and for nine years had been in his home at 1607 Thrush Terrace in St. Louis County; he was listed (1960) in the 'white' pages of the St. Louis telephone directory under his name (for which he paid) and also listed at his address was 'Caloric Stove Corporation' (for which Caloric paid). There was an advertisement in the 'yellow pages' of the directory (for which Caloric paid) which read: 'Built-ins, free-standing sinks, hoods, featuring color-coordination by Beatrice West. Offered by leading builders and dealers. A Caloric exclusive. Ranges have Gold Star features; Thermo-set top burner, meat thermometer, automatic clock-controlled oven, roto-roaster rotisserie. Where to buy them. Branch Office, Caloric Stove Corporation, 1607 Thrush.' Vocke received mail at his home addressed to him, to Caloric Stove Company, and to Caloric Appliance Company; the company supplied or would supply business cards and letter-heads but he preferred not to use the latter; he operated and paid the expenses of his own automobile; he had no drawing account, prepared and filed his own income tax return, received no fringe benefits from Caloric, and it did not withhold any taxes for his benefit.

Vocke further testified: It was his purpose to produce as much business as possible for Caloric on which he was paid commissions monthly, and received a commission on all appliances sold in his territory. He was not under Caloric's control as to routes or manner of selling, but he could not change basic prices; he 'set up' distributors and in some cases dealers to handle Caloric products. He obtained orders from the distributors who, in turn, resold the stoves to dealers, or he sold direct to those dealers which he had set up. The Caloric distributor in Cape Girardeau was Uregas Company and where there was a distributor he stayed out of the area and let the distributor operate as he wished; some of the distributors' orders went through his office and some were mailed direct to Topton; he would talk with the dealers and distributors from time to time. Uregas was the main distributor in outstate Missouri; in St. Louis there were three distributors who also made some sales outstate. There were, he estimated, as many as fifty dealers in his exclusive territory at the time of the hearing.

Caloric furnished catalogs and similar materials to him and he, in turn, furnished them to the dealers and distributors or, in some instances, such materials were sent direct to the distributors and dealers from Pennsylvania. Caloric advertised nationally and on some Missouri television stations and was doing so in November, 1960, at the time of the hearing, for which it paid. It also advertised in metropolitan and local newspapers under the dealer's name; that advertising was paid for half by the company and half by the dealer. Factory men in the advertising and service fields held occasional meetings in Missouri.

His further testimony was: Caloric rented warehouse space in a public warehouse in St. Louis where a stock of appliances was kept. He would send an order for merchandise either to Pennsylvania or to the St. Louis warehouse. About one half of the orders from the distributors in his area (about $100,000 in volume) was shipped from the St. Louis warehouse. Payments were sent direct to the company by the dealers and distributors. He did no collecting for the company. When merchandise was sent to a distributor, it was sold to him; the company did not consign merchandise. He estimated that the total dollar volume of Caloric sales in his area in 1960 was $200,000 to $220,000 and that over the years sales averaged close to $200,000 annually.

These questions were asked and these answers given:

'Q. Do you have a written contract with the company, Mr. Vocke? A. Yes, I do. It is an old one but I have it.

'Q. In that they set you up as their exclusive agent in this area? A. That is right, listing certain counties.'

It appears that Caloric was 'doing business' in Missouri so as to make it amenable to personal service in this state. Over a period of at least ten or twelve years Caloric had sold its products to distributors and dealers in Missouri and had received as a result of orders obtained from those distributors and dealers more than $2,000,000, about $200,000 annually. It maintained a warehouse within the State of Missouri (rented space in a public warehouse), where it kept a sizable stock of its merchandise which remained in the ownership of the company until sold to distributors or dealers in Missouri. About one half the total money volume of that merchandise sold to Missouri distributors and dealers was supplied from the company-owned merchandise stored in the St. Louis warehouse under the direction and control of the company; the company publicly advertised that it maintained a branch office in Missouri and solicited orders for its merchandise through that branch office, operated by its agent Vocke who was paid on a commission basis, who by written contract was Caloric's exclusive agent in certain specified Missouri counties and who was in charge of the 'branch office' set up and from which he, as Caloric's exclusive agent, regularly sold Caloric's products to Missouri distributors and dealers which he had established.

The business activities of a foreign corporation which would constitute doing business in this state so as to make it amenable to personal service were reviewed and concisely stated in the case of Hayman v. Southern Pacific Co., Mo., 278 S.W.2d 749. In that case plaintiff, a brakeman on defendant's railroad, was injured while riding on one of defendant's trains in the State of California. Defendant operated no railroad lines or other facilities in Missouri and, while it maintained an office in St. Louis, the sole activity of the employees therein was the solicitation of freight and passenger business over defendant's line. This court, in holding that the Circuit Court of the City...