Scholnik v. National Airlines

• Decision Date: 04 February 1955
• Docket Number: No. 12170.,12170.
• Citation: 219 F.2d 115
• Parties: Thelma SCHOLNIK, Appellant, v. NATIONAL AIRLINES, Inc., Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

219 F.2d 115 (1955)

Thelma SCHOLNIK, Appellant, v. NATIONAL AIRLINES, Inc., Appellee.

No. 12170.

United States Court of Appeals, Sixth Circuit.

February 4, 1955.

Ralph Rudd, Cleveland, Ohio, Marvin C. Harrison, Harrison, Spangenberg & Hull, Cleveland, Ohio, on brief, for appellant.

Edward D. Crocker, Cleveland, Ohio, Arter, Hadden, Wykoff & VanDuzer, Cleveland, Ohio, on brief, for appellee.

Before ALLEN, McALLISTER and MILLER, Circuit Judges.

MILLER, Circuit Judge.

The appellant, Thelma Scholnik, a citizen of Ohio, filed this action in the District Court for the Northern District of Ohio against National Airlines, Inc., a Florida corporation, to recover damages in the amount of $40,000 for personal injuries sustained on or about June 11, 1951 while a passenger in a National Airlines plane while the plane was over Florida in flight from Havana, Cuba, to Miami, Florida. The complaint alleged that the injuries resulted from being thrown out of her seat into the aisle by reason of the negligent operation of the plane. The District Judge sustained appellee's motion to quash service of summons and to dismiss the complaint, holding that the appellee was not doing business in Ohio, that the summons was not served on an authorized agent of the appellee, and that the District Court in Ohio had no jurisdiction over it. This appeal followed.

The facts are not in dispute and are shown by affidavits, a deposition and documentary evidence to be as follows: National Airlines, Inc., hereinafter referred to as National, is engaged in the business of transporting passengers by airplane. It has certificates from the Civil Aeronautics Board for operation over routes from New York to Miami, Florida, from Jacksonville and Tampa, Florida to New Orleans, Louisiana and from Tampa to Havana, Cuba. It operates no flights into the State of Ohio and maintains no office in Ohio. Some of its planes operating from the south into Washington, D. C. are thereafter flown from Washington into Cleveland, Ohio, under an Equipment Interchange Leasing Agreement, hereinafter referred to as the Lease, entered into between National and Capital Airlines, Inc., hereinafter called Capital. Capital is a Delaware corporation, separate and distinct from National, is neither a parent nor a subsidiary corporation to National, and, unless made so by the Lease, is not the servant or employee of National.

The Lease has this factual base. National does not operate any flight to the northwest of Washington. Capital operates a flight from the northwest (Cleveland, Ohio) into Washington but not to the south thereof. During the summer six months, May through October, Capital's business increases and it becomes short of equipment. National has equipment which it can furnish to Capital during this period. In the winter months, November through April, when Capital's business falls off, it has excess equipment which it can furnish to National. The leasing of such equipment by one to the other enables the two lines to operate continuous through flights between Cleveland and Miami or Havana, stopping at Washington. Under the Lease, a National plane, after arriving at Washington from the South, is leased, together with its National operating crew, to Capital, and then continues on to Cleveland over the Capital route. Similarly, a Capital plane after arriving in Washington from Cleveland, is leased, together with its Capital operating crew, to National, and then continues south over the National route. Through tickets are sold by each line, which show that the trip northwest of Washington was being made by Capital, and that the trip south of Washington was being made by National. Such through transportation is advertised by Capital out of its Cleveland office.

The Lease, entered into on June 2, 1950, was subject to, and became effective only on, approval by the Civil Aeronautics Board, and was so approved. It provided that from November 1st to April 30th of each year Capital would lease certain aircraft and flight crews to National, and from May 1st to October 31st of each year National would lease certain aircraft and flight crews to Capital, the leases being for the purpose of providing through service on such of the schedules of the parties thereto connecting at Washington as the parties shall determine by mutual agreement. The lease of the aircraft and flight crews became effective upon delivery of the aircraft in question by the owner to the lessee, and the lease terminated upon the delivery of the aircraft by the lessee to the owner. Such delivery was ordinarily to be made immediately after the aircraft arrived at the ramp at the airport then serving the city of Washington. A written receipt describing the aircraft and the time of such delivery was executed by the receiving carrier.

The Lease provided:

"Each party shall have the exclusive right, subject to the orders of the Civil Aeronautics Board, to fix the scheduled stops to be made on its routes, and nothing contained in this agreement shall be construed to grant either party any right whatever (a) to determine whether any flight of the other party shall be operated or cancelled in whole or in part or (b) to exercise any control over any operation or business or affairs of or interest in the other party, except as may be specifically provided for herein or as may be an incident of this agreement.

"Flights with planes leased under the terms of this agreement shall be under the absolute operational control of the lessee during the period of the lease, and the leased flight crews shall be under the exclusive operational control of the lessee during the period of the lease. * * *

"The lessor of aircraft and equipment hereunder shall make such change in the radio equipment in its aircraft as to conform to the assigned frequencies of the lessee."

The Lease also contained the following provisions: The lessor was responsible for loss of or damage to its aircraft and equipment while leased to the other, except that the lessee would be liable to the lessor for such loss or damage as (1) occurred when the aircraft was on the ground and not taxiing in or out with respect to a flight, and (2) occurred as a result of negligence on the part of the lessee or its employees. Each party would at all times maintain appropriate insurance covering its responsibilities for loss of or damage to aircraft while under lease. The lessee was to keep in full force and effect at its expense insurance insuring both itself and the other party, as their respective interests might appear, against liability for injuries to or deaths of passengers and third parties, and damage to property caused by the operation or possession of such aircraft. The lessee agreed to indemnify the other party during the period in which it had possession of the aircraft against all damage or claims caused by the operation or possession of such aircraft.

The Lease contained lengthy and detailed provisions with respect to the rental for leased aircraft and flight crews. In general, certain types of expense, measured in cents per revenue mile, were allocated to each airline, (1) when operating as lessee and (2) when operating as lessor. The lessee was to keep an accurate record of the revenues generated by the leased aircraft on the mileage operated under lease. The lessor and lessee would each receive such proportion of such revenues as their respective expenses per plane mile bore to the total expenses per plane mile, which division would be continued until the lessor and lessee each recovered their expenses. In the event the flights with leased equipments resulted in revenues above the expenses of both lessor and lessee, the excess of such revenues was to be divided 45% to the lessor and 55% to the lessee.

Historically, the jurisdiction of a court to render a judgment in personam against a defendant depended upon the presence of the defendant within the territorial jurisdiction of the court. Pennoyer v. Neff, 5 Ott. 714, 95 U.S. 714, 24 L.Ed. 565. The strictness of that rule has given way somewhat to the present view that due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend...