SB McMaster, Inc. v. Chevrolet Motor Co.

• Decision Date: 06 January 1925
• Citation: 3 F.2d 469
• Court: U.S. District Court — District of South Carolina
• Parties: S. B. McMASTER, Inc., v. CHEVROLET MOTOR CO.

3 F.2d 469 (1925)

S. B. McMASTER, Inc., v. CHEVROLET MOTOR CO.

District Court, E. D. South Carolina.

January 6, 1925.

Edward L. Craig, of Columbia, S. C., for plaintiff.

R. B. Herbert, of Columbia, S. C., for defendant.

ERNEST F. COCHRAN, District Judge.

This action was commenced in the court of common pleas for Richland county, S. C., by the service of a summons and complaint upon A. Barrow, the manager of the Barrow-Chevrolet Company; the latter company alleged to be the agent of the defendant, the Chevrolet Motor Company. The defendant filed its petition and bond for the removal of the cause into this court. The affidavit verifying the petition is made by Charles Rivers Carroll, to the effect that he is an attorney and counselor at law in the office of John Thomas Smith, Esq., general counsel for the defendant, and that he is fully acquainted with the facts referred to in the petition; that he has read the petition and knows the contents thereof; that the allegations of the petition are true to his own knowledge, except such as are therein stated on information and belief, and as to such matters he believes them to be true; and that the reason this verification is made by him, and not by the petitioner, is that the petitioner is a foreign corporation, to wit, a corporation of the state of New Jersey, and is absent from the jurisdiction, and that there is no person other than the deponent who is capable of verifying the petition.

The defendant appeared in this court for the sole purpose of objecting to the jurisdiction and moved to set aside the service of the summons and complaint and dismiss the action on the ground that the defendant was a foreign corporation and not doing business in South Carolina, and on the further ground that the service of the summons and complaint was not upon any agent of the defendant. This motion is based upon the affidavit of L. A. Barrow, general manager of the Barrow-Chevrolet Company, stating that a certain contract between the Chevrolet Motor Company and the Barrow-Chevrolet Company (a copy being attached to the affidavit) is the only contract existing between the said parties, and that the Barrow-Chevrolet Company is in no way the agent of the Chevrolet Motor Company, and that the only relation existing between the said companies is set forth in the said contract. The affidavit is not contradicted. The plaintiff contends that the terms of this contract show that the defendant is engaged in business in South Carolina, and that the Barrow-Chevrolet Company is the defendant's agent for such purpose, while the defendant contends that the terms of the contract show that the relationship is not one of agency but of vendor and vendee, and that the defendant is not doing business in this state.

The plaintiff has made a motion to remand the case to the state court on two grounds: (1) That the verification is defective in that the verification states that the allegations of the petition are true of the affiant's own knowledge, except such as are therein stated on information and belief, when neither the petition nor the verification states which matters are upon personal knowledge and which are stated on information and belief; and (2) that the verification is made by an attorney at law and not by an officer of the corporation.

These two motions were heard at the same time, but logically the motion to remand should be considered and disposed of first, because if the case should be remanded to the state court, this court should not and would not pass upon the motion to set aside the service.

As to the first ground upon which plaintiff seeks to have the case remanded, the plaintiff's contention is that a verification in the form made in this case is insufficient, under the state statutes and that under the act of Congress known as the Conformity Act (Comp. St. § 1537) this court would be bound by the state decisions construing those statutes. The plaintiff relies upon sections 417 and 418 of the Code of Civil Procedure of South Carolina of 1922, vol. 1, as construed in Hecht v. Friesleben, 28 S. C. 184, 5 S. E. 475, Burmester v. Moseley, 33 S. C. 251, 11 S. E. 786, and Addison v. Sujette, 50 S. C. 201, 27 S. E. 631, that where a verification of a pleading is to the effect that the same is true to deponent's own knowledge except as to those matters therein stated on information and belief, and that as to those matters he believes them to be true, such verification is defective unless it is indicated or pointed out either in the pleading or in the verification which matters are upon personal knowledge and which matters are upon information and belief. There are respectable cases which hold that where the allegations of the pleadings are in positive form, the statement in the verification as to the matters stated on information and belief may be construed as surplusage. See 22 En. Pl. & Pr. 1045, 1046. But the South Carolina cases and probably the weight of authority is to the contrary. See 31 Cyc. 542; Robinson v. Gregg (C. C.) 57 F. 186. The South Carolina cases, however, are based upon the theory that such a verification is defective because no indictment for perjury can be based thereon. There are differences between the South Carolina perjury statute and the federal perjury statute (compare perjury statutes of South Carolina, Crim. Code 1922, vol. 2, §§ 335, 332, with the federal perjury statute as contained in U. S. Criminal Code, § 125; R. S. U. S. § 5392; Compiled Stats. 1918, § 10295), and I am not prepared to hold that under the federal perjury statute an indictment could not properly be framed on a verification of this kind.

The form of the verification may make the case for the prosecution more difficult, but I think that an indictment could, under the federal perjury statute, be legally based upon such a verification. However, be that as it may, I do not think that in this case I am bound by the South Carolina decisions. Congress has provided (Judicial Code, § 29; Comp. St. § 1011) that the petition for removal shall be "duly verified" and the rule is well settled that when Congress has acted, the procedure prescribed by the act of Congress is exclusive and must be followed. Bracken v. Union Pacific Ry. Co. (C. C. A. 8th Circuit) 56 F. 449, 5 C. C. A. 548; In re Cockfield (D. C.) 300 F. 120; Berry v. Mobile, etc. (D. C.) 228 F. 395.

Congress has not defined the words "duly verified." The word "verify" or "verification" does not always imply an oath. At common law, even in legal proceedings it did not always or necessarily imply an oath. 22 En. Pl. & Pr. 1016. Nevertheless, it is clear that the requirement of a verification under modern codes and statutes in legal proceedings and pleadings means to confirm or substantiate by oath. 22 En. Pl. & Pr. 1016; De Witt v. Hosmer, 3 How. Prac. (N. Y.) 284; Patterson v. City of Brooklyn, 6 App. Div. 127, 40 N. Y. S. 581, 582; Harp v. State, 59 Ark. 113, 26 S. W. 714; Summerfield v. Phœnix Assur. Co. (C. C.) 65 F. 292, 296; 8 Words and Phrases, First Series, p. 7295.

Conceding that the verification must be by an affidavit or an oath of the party making it, I am constrained to hold that the affidavit in this case is sufficient. An affidavit in exactly this form was apparently approved by the Circuit Court of Appeals for the Eighth Circuit, in Porter v. Coble, 246 F. 244, 158 C. C. A. 404, and it was expressly decided by Judge Smith in this district that a petition verified in this form was duly verified under the act of Congress. Murray v. Southern Bell, etc., 210 F. 925.

Plaintiff's second ground on the motion to remand is that the verification is made by an attorney and not by the party to the cause or plaintiff's officer. Here again, apparently, the plaintiff bases its ground upon the South Carolina statute, which provides (sections 417, 418, Code of Civil Procedure of 1922, vol. 1) in what cases the verification may be made by an attorney. But the act of Congress is exclusive and does not provide who shall make the verification upon a petition for removal. I see no reason why an attorney may not make the verification, and the federal cases so hold. Porter v. Coble (C. C. A. 8th Circuit) 246 F. 244, 158 C. C. A. 404; Berry v. Mobile & O. R. Co. (D. C.) 228 F. 395.

Even, however, if I thought that the verification was defective in the particulars mentioned, I would not think it proper to remand the case on that ground, but would allow the party to amend. Murray v. Southern Bell, etc. (D. C.) 210 F. 925; R. S. U. S. §§ 948, 954; Compiled Stats. 1918, §§ 1580, 1591; 22 En. Pl. & Pr. 1052.

I will now consider the defendant's motion to set aside the service and dismiss the case. While the motion is based both upon the ground that the defendant is not doing business in the state and that the person upon whom service was made is not defendant's agent, nevertheless the two grounds may be considered together, for under the facts in the case, if the defendant is doing business at all in this state, it is by virtue of the agency created by the contract referred to, and if, per contra, the contract does not create the relation of agency, the defendant is not doing business in the state. In other words, there is no proof or claim before this court that the defendant is doing business in the state save through the acts of the Barrow-Chevrolet Company, under the terms of the contract between that company and the defendant. It is true that the plaintiff does claim that when the defendant exercises the right under the contract to come into the state and inspect the Barrow-Chevrolet's place of business, records, accounts, etc., such acts themselves constitute doing business in the state. But I do not think that such acts alone would constitute doing business in the state in the sense that the defendant would be liable to process in such state. Therefore, as I view it, a decision upon the question of agency will dispose of both...