Roy v. North Am. Newspaper Alliance, Inc.

• Decision Date: 30 December 1964
• Citation: 205 A.2d 844,106 N.H. 92
• Parties: Alphonse ROY v. NORTH AMERICAN NEWSPAPER ALLIANCE, INC., et al.
• Court: New Hampshire Supreme Court

Page 844

205 A.2d 844

106 N.H. 92

Alphonse ROY v. NORTH AMERICAN NEWSPAPER ALLIANCE, INC., et al.

Supreme Court of New Hampshire.

Argued Sept. 10, 1964.

Decided Dec. 30, 1964.

McLane, Carleton, Graf, Greene & Brown, G. Peter Guenther and Bois & Laflamme, Manchester, for plaintiff.

Upton, Sanders & Upton, Concord, for defendant North American Newspaper Alliance Inc., et al., furnished no brief.

Devine, Millimet, McDonough, Stahl & Branch and E. Donald Dufresne, Manchester (Joseph A. Millimet, Manchester, orally), for defendant North American Newspaper Alliance, Inc.

KENISON, Chief Justice.

The basic question in this case is whether it is consistent with due process to hold that the defendant foreign corporation is amenable to the judicial jurisdiction of this state by substituted service on the Secretary of State pursuant to RSA 300:11, 12. The pertinent part of RSA 300:11(c), which was enacted by Laws 1949, s. 206, provides that the Secretary of State is authorized to accept service on any foreign corporation 'transacting business in this state.' See Uniform Interstate and International Procedure Acts, s. 1.03(a)(1) and Commissioners' note in 9B Uniform Laws Annotated 75 (1963 supp.). A capsule summary of some of the decisions in this jurisdiction are relevant to an understanding of the development of 'judicial jurisdiction over a foreign corporation as to causes of action arising out of * * * an act done, or caused to be done, by the corporation in the state or resulting in consequences there * * *.' Restatement (Second), Conflict of Laws s. 91a (Tent. draft No. 3, 1956).

More than a century ago when the jurisdiction over foreign corporations was minimal in Libbey v. Hodgdon, 9 N.H. 394 (1838), this court 'took the bold step' of allowing a suit against a Maine corporation under a statute which did not expressly include foreign corporations. Henderson, The Position of Foreign Corporations in American Constitutional Law 82 (1918). In the Libbey case, supra, at 396 the court reasoned as follows: '* * * If, upon principles of law or comity, corporations created in one jurisdiction are allowed to hold property and maintain suits in another it would be strange indeed if they should not also be liable to be sued in the same jurisdiction. If we recognize their existence for the one purpose, we must also for the other. If we admit and vindicate their rights, even-handed justice requires that we also enforce their liabilities; and not send our citizens to a foreign jurisdiction in quest of redress for injuries committed here.'

Under the paralyzing effect of Pennoyer v. Neff, 95 N.S. 714, 24 L.Ed. 565, and its successors this court faithfully but unhappily followed the federal decisions as to what constituted doing business by a foreign corporation. Thus in Campbell v. United States Radiator Corporation, 86 N.H. 310, 311, 167 A. 558 (1933), it was noted that the 'presence' of a foreign corporation 'is as indubitably shown by a single act as by many transactions. But we have no concern with the adequacy or correctness of the reasons given for a rule of federal constitutional law.' In that case we followed International Harvester Co. of America v. Commonwealth of Kentucky, 234 U.S. 579, 585, 34 S.Ct. 944, 58 L.Ed. 1479 and Bank of America v. Whitney-Cent. Nat. Bank, 261 U.S. 171, 43 S.Ct. 311, 67 L.Ed. 594 noting '[I]t is not the function of the state court to review the adequacy of the supporting logic.'

When the shackles were loosened by International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, and the Supreme Court discarded the theories of constructive presence and implied consent in favor of a test which emphasized minimum contacts with the State so that the assumption of jurisdiction did not offend 'traditional notions of fair play and substantial justice,' this court adopted the rationale of that case without limitation. See Grace v. Procter & Gamble Company, 95 N.H. 74, 76, 57 A.2d 619, 621 (1948) where it was stated that the International Shoe decision 'indicates that the problem of jurisdiction over foreign corporations will hereafter be treated more realistically.' See also, Taylor v. Klenzade Products, 97 N.H. 517, 92 A.2d 910 (1952). Some significance may be attached to the fact that after the Grace case the Legislature at its next session in 1949 enacted RSA 300:11(c), providing that service of process could be made on the Secretary of State for any foreign corporation 'transacting business in this state.' In LaBonte v. American Mercury Magazine, Inc., 98 N.H. 163, 96 A.2d 200, 38 A.L.R.2d 742 (1953) a foreign publishing corporation was held amenable to service under this statute in a libel action where the printing and distribution of its magazine by a domestic corporation was done on its behalf in this state. 2 Hornstein, Corporation Law and Practice, s. 584, note 7 (1959).

The New Hampshire statute has been interpreted as '* * * exerting jurisdiction over foreign corporations up to the constitutional limit.' W. H. Elliott & Sons Co. v. Nuodex Products Co., 243 F.2d 116, 124 (1st Cir.1957). This view of the New Hampshire statute is correct and was adhered to in Sanders Associates, Inc. v. Galion Iron Works & Mfg. Co., 304 F.2d 915, 919 (1st Cir.1962), where the court stated that the objective of the New Hampshire statute was '* * * to exercise jurisdiction to the full extent of the constitutional limit.' See also, Benson v. Brattleboro Retreat, 103 N.H. 28, 30, 164 A.2d 560, 84 A.L.R.2d 409. It is thus clear that RSA 300:11(c), as heretofore construed and applied, has a long arm and a long reach. ALI, Study of the Division of Jurisdiction Between State and Federal Courts 70-71 (Tent. draft No. 1, 1963); Cardozo, The Reach of the Legislature and the Grasp of Jurisdiction, 43 Cornell L.Q. 210 (1957).

The Pearson column was received by teletype by the defendant in its New York office where it was stenciled and mimeographed and shipped to subscribing newspapers on the East Coast. The promotion, distribution and sales of the defendant's news features to newspapers in New Hampshire were conducted almost exclusively by mail and less frequently by telephone. Its promotional material was forwarded in the same manner. During the period from August 1959 to November 1962, the date of the hearing, the defendant sent promotional material to the majority of daily newspapers in this state. The defendant acted as agent for authors and artists and its duties were to sell the particular feature for the author and make an accounting to him. The only visits made to New Hampshire by defendant's salesmen were one made in 1956 and another for an unknown purpose in 1959.

Under the contract between the defendant and the columnist Pearson the defendant agreed to 'devote its best efforts to secure newspaper publication of the column throughout the world.' Under the contract Pearson gave the defendant 'the exclusive first publication rights thereto in newspapers throughout the world' and agreed not to release anything for publication without the permission of the defendant. Under this contract Pearson agreed to indemnify the defendant against damages arising out of libel and other legal liabilities. Pearson was paid a guaranteed amount plus a percentage of the revenue from sales to newspapers by the defendant.

The defendant contends 'that there is a tradition against taking jurisdiction over foreign publishers based on alleged libels unless there is a very substantial and continuous activity by the publisher in the forum state.' Annot. 38 A.L.R.2d 747. Insull v. New York World-Telegram Corporation, 273 F.2d 166 (7th Cir.1959); Walker v. General Features Corporation, 319 F.2d 583 (10th Cir.1963). One able commentator in the field of conflict of laws has suggested that 'Insull must go' and has submitted the following arguments: 'An Illinois resident claimed to have been harmed by articles mailed into Illinois by defendants. The Illinois libel laws are clearly designed to protect Illinois residents against defamation; Illinois has an interest in applying those laws in such a case. It is no more unfair to subject a newspaper publisher than a valve maker [Gray v. American Radiator & Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761] to suit here when both have deliberately caused their wares to be consumed in Illinois. It is no answer that only a relatively few copies of the...