La Porte Heinekamp Motor Co. v. Ford Motor Co.
| Citation | 24 F.2d 861 |
| Decision Date | 10 April 1928 |
| Docket Number | No. 3500.,3500. |
| Parties | LA PORTE HEINEKAMP MOTOR CO. v. FORD MOTOR CO. |
| Court | U.S. District Court — District of Maryland |
Henry Zoller, Jr., of Baltimore, Md., for plaintiff.
Haman, Cook, Chesnut & Markell, of Baltimore, Md., for defendant.
La Porte Heinekamp Motor Company brought a suit at law in the superior court of Baltimore city against the Ford Motor Company. The declaration contains six common counts, in assumpsit, for money payable by the defendant to the plaintiff, and also a special count in which it is alleged that on January 2, 1924, the defendant granted to the plaintiff the privilege of selling Ford Automobiles and other products, within the boundary of the United States; that the plaintiff accepted the grant, and, in the exercise thereof, built up under the aid and instigation of the defendant's agents an extensive and lucrative business in automobile parts, and continued to operate it profitably until April 1, 1927, when the defendant arbitrarily withdrew from the plaintiff the privilege of continuing the business after April 15, 1927, without compensation either for the business or for the large stock of parts purchased for the purpose of supplying the demands of the business. The damages claimed are $100,000. The defendant was summoned by service on Byron J. Wilson, its agent and traveling representative. The case was removed from the state to the federal court on the ground of diverse citizenship; the plaintiff being a Maryland, and the defendant a Delaware, corporation. After the removal of the case, the defendant appeared specially, and made a motion to quash the service of summons on the ground that the defendant at the time of the suit was not doing business in the state of Maryland. Testimony was taken, and the following facts were disclosed:
The Ford Motor Company has no factory, warehouse, or office in Maryland. It has a factory in Detroit, Mich., and various assembling plants throughout the country, where automobiles are put together, the nearest of which to Baltimore is located at Chester, Pa. It also has a place of business in Washington. There are no sales of automobiles or other products by the Ford Motor Company to users in Maryland. A number of dealers are appointed in Maryland, as in other parts of the country, but they do not sell as agents of the company. The cars are purchased from the company outright, and are shipped from Chester, on sight draft with bill of lading attached, or, if driven into Maryland, are delivered to dealers upon receipt of check. The dealers are selected, having regard to their qualifications, standing in the community, and financial condition. They are appointed by the company at Detroit upon the recommendations of the branch manager in Chester.
Byron J. Wilson is the traveling representative of the Ford Motor Company, under the supervision of the Chester branch, which covers Maryland, Delaware, and Virginia. He has no office in Maryland, and has no authority to make contracts for the company. Speaking generally, his duties are to call on the dealers from time to time to see that they are carrying on the business in a proper manner, and that satisfactory service is furnished to the public. For the same purpose, he also calls upon and inspects the places of business of the service dealers or garages which render service and make repairs to Ford cars. He endeavors also in every way to stimulate sales by the dealers and to instruct them in methods of salesmanship. Thus stated, his activities may seem to be so small a part of the defendant's business that it would be incorrect to say that the Ford Motor Company is doing business in Maryland, as that phrase has been interpreted by the state and federal courts. Indeed there are certain decisions of the courts in similar cases which go to this extent. See Southeastern Dist. Co. v. Nordyke, etc., Co., 159 Ga. 150, 125 S. E. 171; Holzer v. Dodge Bros., 233 N. Y. 216, 135 N. E. 268; Zimmers v. Dodge Bros. (D. C.) 21 F.(2d) 152; S. S. McMaster, Inc., v. Chevrolet Motor Co. (D. C.) 3 F.(2d) 469.
But, when the activities of the traveling representative in the case at bar are more closely examined, it becomes clear that he performs duties more varied than those described in the cases cited, and exercises an important function for his employer in Maryland. He has spent on the average of 5 days a week in Baltimore, residing nearly always at the same hotel, where he has been within easy reach of the Ford dealers. He has called upon the dealers and service stations constantly, and has exercised an intimate supervision and control over their business. When the suit was brought, there were 10 dealers in Baltimore city, and, during an earlier period, when the Ford factory was in full blast in the manufacture of model T, recently abandoned, there were 13 dealers in Baltimore city and 30 dealers in the state. In addition, there were between 300 and 400 service dealers or garages entitled to display a sign "Authorized Ford Service." The agent was useful in selecting dealers and service stations; his recommendations being submitted from the Chester branch to the factory at Detroit for final approval. Coming from the man on the ground, such recommendations were not without weight.
Each dealer annually entered into a contract with the Ford Motor Company, which was called a sales agreement, although strictly speaking it was not a contract for the sale of cars. Therein the dealer was granted the privilege of selling cars, accessories, etc., and agreed to maintain a properly equipped salesroom and service station, acceptable to the company, and prominently located. The company was to be in no way responsible for any of the charges of the business. The dealer agreed to furnish before the end of each year an estimate of the number of cars he would sell in the following year, in order that the company might determine the prospective requirements of its business; but the company, while agreeing to give the estimate careful attention, did not promise absolutely to furnish the cars. The agreement fixed the rate at which the cars should be sold by the company, together with the discount, and provided that the title to all the products should remain in the company until paid for. The price of the cars, and the amount of the freight charges to be charged by the dealer to the retail buyers, were fixed. The dealer promised to obtain from each purchaser a written order, together with a cash deposit of a fixed amount, and to furnish these orders to the company upon request. The company was given the right to visit the dealer's place at any time and check up the retail buyers' orders. The agreement did not run for any particular length of time, for it was provided that it might be canceled at any time upon written notice by either party.
It is noteworthy that the dealer is not an agent of the Ford Motor Company, and that the company assumes no responsibility for his...
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