Parris v. H. G. Fischer & Co.

• Decision Date: 19 March 1941
• Docket Number: 165.
• Parties: PARRIS v. H. G. FISCHER & CO.
• Court: North Carolina Supreme Court

13 S.E.2d 540

219 N.C. 292

PARRIS v. H. G. FISCHER & CO.

No. 165.

Supreme Court of North Carolina

March 19, 1941

Action to recover damages for alleged wrongful seizure of certain personal property. The plaintiff is a physician resident in Northampton County, and the defendant is an Illinois corporation engaged in the manufacture and sale of electro surgical medical equipment.

Plaintiff attempted to bring defendant into court by service of process on the Secretary of State in accord with the provisions of C.S. § 1137. Defendant entered special appearance and moved to strike out the purported service of summons on the ground that defendant was not doing business in this state and had no property therein. The court found as a fact that defendant was doing business in the state, and denied the defendant's motion.

It is alleged in the verified complaint that the property in question, a short wave therapeutic machine, was purchased by plaintiff from defendant through its representative, and payment secured by a conditional sale contract, providing payment in monthly installments, defendant accepting in part payment plaintiff's own therapeutic machine. Plaintiff alleged that, in consequence of false representations in the sale and defendant's failure to make adjustment, the violation of his home in the wrongful seizure of this property by defendant's agent constituted an actionable wrong for which damages were prayed.

The following letter from defendant to plaintiff, under date of April 3, 1940, was offered: "Under date of March 30th our dealer representative, Mr. George F. Hatch, of Henderson wrote us that he had made a second trip to Rich Square to see you but unfortunately did not find you in although he waited over an hour. As he is located quite a distance from you and because of the press of business he has not been able to get into your territory very often lately, when he noticed that your door was left open so that anyone might enter and found that the Short Wave was apparently not being used as it was covered with dust, he decided the best thing to do was to take it back to Henderson with him. This, of course, is strictly in accordance with our legal rights as your contract was in default. However, we are indeed sorry that he was unable to see you personally and demonstrate the machine to your satisfaction so that you might reinstate the contract by bringing it up to date."

Also another letter from defendant to plaintiff, dated April 12 1940, was offered: "Under date of November 16, 1939, you signed a conditional sale contract, covering the purchase of a Model 'S' Short Wave outfit. You agreed by this contract, to pay us $14.10 a month beginning January 1, 1940, for a period of 23 months and a final payment of $17.30 to be paid December 1, 1941. When you signed the contract you acknowledged the outfit to be in perfect working order as represented and you agreed to make the payments. On December 11, 1939, we mailed you a schedule of your payments and we asked you, at that time, to notify us if there were any irregularities. You did not notify us at that time that there were and we naturally assumed that everything was okay. Our Dealer Representative, Mr. Hatch, went to Rich Square on March 30th, which was the second time he was there, but was unable to see you. Your place of business was wide open and Mr. Hatch removed the Short Wave machine. We would be very glad to instruct Mr. Hatch to replace the machine in your office upon receipt of certified check for $56.40, covering the first four installments, which are delinquent."

The conditional sale contract was offered showing sale of the machine by the defendant to the plaintiff for $401.60, subject to credit of $60 (for plaintiff's own machine), payable in monthly installments. This contract provided that the title to the property should remain in the defendant corporation until the payment in full of the purchase price, and was signed by the plaintiff, and on behalf of the defendant by Geo. F. Hatch, "dealer representative." At the time of repossessing the machine, defendant's representative left a note for the plaintiff in which he said, "We have taken out the machine," and signed it as representing the defendant.

Defendant offered affidavits of its treasurer and of Geo. F. Hatch, setting out its method of doing business through dealer-representatives in North Carolina, who were limited in authority to the sale of defendant's products on a discount basis, offers to purchase to be accepted by defendant at its home office.

The defendant excepted to the ruling of the court below in denying its motion to strike out the service of summons, and appealed.

V. D. Strickland, of Rich Square, for plaintiff, appellee.

Eric Norfleet, of Jackson, for defendant, appellant.

DEVIN Justice.

It was conceded that the defendant is a foreign corporation without process agent or property in the state, and that service of process could only be had under the provisions of C.S. § 1137 upon the ground that it was "doing business in this state." It was found as a fact in the court below that defendant was doing business in the state, and that finding constituted the basis upon which defendant's motion for dismissal for want of lawful service was denied.

There was no request that the court find the supporting facts upon which its conclusion that defendant was doing business in the state was based, and hence it will be presumed that the court found sufficient facts to support its conclusion. Rosser v. Matthews, 217 N.C. 132, 6 S.E.2d 849; Hinkle v. Scott, 211 N.C. 680, 191 S.E. 512. If the finding by the court below that defendant was doing business in this state is supported by evidence appearing in the record, the ruling against defendant's motion must be upheld. Brown v. Coal Co., 208 N.C. 50, 178 S.E. 858. This necessitates an examination of the record to determine if there was evidence of facts sufficient to sustain the ruling.

It appears that defendant is engaged in the business of manufacturing and selling electro surgical medical equipment, including short wave therapeutic machines, and for that purpose maintains "dealer-representatives" in this state. The number and specific territory of these representatives did not appear. One of them is Geo. F. Hatch, who, as such, transacted the business with plaintiff. He sold to the plaintiff one of defendant's short wave therapeutic machines, and took in part payment an old machine of plaintiff. He also had plaintiff execute a conditional sale contract, as security for the balance of the purchase price, payable to the defendant, and this was signed on behalf of defendant by Mr. Hatch, and accepted by defendant. This contract provided, among other things, that the title to the machine sold should remain in the defendant Corporation until the payment in full of the purchase price. Some four months later, the plaintiff having, as defendant contended, failed to make all the payments agreed on, Geo. F. Hatch, acting for and on behalf of the defendant, entered the home of plaintiff, in his absence, and took possession of the machine, under circumstances which gave rise to plaintiff's action. Thereafter, the defendant, in a letter to plaintiff, advised him of the action taken by Mr. Hatch, and in justification of the seizure of the property said: "This, of course, is strictly in accordance with our legal rights, as your contract was in default." Subsequently defendant again wrote plaintiff about the matter, saying: "We would be very glad to instruct Mr. Hatch to replace the machine in your office upon receipt of certified check for $56.40, covering the first four installments which are delinquent."

It would seem reasonably clear that this evidence would tend to support the conclusion that in this instance the defendant was doing the business in North Carolina for which the corporation was created, through its representative, and was thus present in his person. The evidence tends to show that its representative sold defendant's products to plaintiff, executed for it and in its name conditional sale contract, title to the property being retained by defendant Corporation; that on behalf of the defendant he made two visits to plaintiff for the purpose of collecting installments due, and on his last visit undertook collection by repossessing the property; that he was apparently under the control of the defendant--subject to its instructions--and that his actions in the premises were ratified and approved by the defendant, as shown by its letters. This conduct on the part of Hatch transcends the functions of a mere factor or commission merchant who distributes the goods of a manufacturer on commission. As was said in Cape Fear Rys. v. Cobb, 190 N.C. 375, 129 S.E. 828, 829: "He who acts as distributor for another, and not merely as distributor of goods manufactured by the other, acts as his agent."

The right of the state to impose, as a condition upon which corporations may be permitted to do business in the state, that they will accept, as sufficient, service of process on a designated person, is well settled. Lunceford v. Commercial, etc., Ass'n, 190 N.C. 314, 129 S.E. 805; Anderson v. Fidelity Co., 174 N.C. 417, 93 S.E. 948; Peoples Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587, Ann.Cas.1918C, 537; International Harvester Co. v. Kentucky, 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479; American Asphalt Roof Corp. v. Shankland, 205 Iowa 862, 219 N.W. 28, 60 A.L.R. 986; St. Clair v. Cox, 106 U.S. 350, 1 S.Ct. 354, 27 L.Ed. 222.

The statute, C.S. § 1137, provides that jurisdiction of our courts to entertain suits against foreign corporations having no property or process agent in the state, may be...