Sims v. National Engineering Co.

• Decision Date: 24 October 1963
• Citation: 221 Cal.App.2d 511,34 Cal.Rptr. 537
• Parties: Florence SIMS, Mary Bell Sims and Royce Allen Sims, Minors, by Florence Sims, their Guardian ad Litem, Plaintiffs and Appellants, v. NATIONAL ENGINEERING COMPANY, Defendant and Respondent. Civ. 27343.
• Court: California Court of Appeals Court of Appeals

Page 537

34 Cal.Rptr. 537

221 Cal.App.2d 511

Florence SIMS, Mary Bell Sims and Royce Allen Sims, Minors, by Florence Sims, their Guardian ad Litem, Plaintiffs and Appellants, v. NATIONAL ENGINEERING COMPANY, Defendant and Respondent.

Civ. 27343.

District Court of Appeal, Second District, Division 4, California.

Oct. 24, 1963.

Wise, Kilpatrick & Clayton, and George E. Wise, Long Beach, for plaintiffs and appellants.

Steven M. Martin, Long Beach, for defendant and respondent.

KINGSLEY, Justice.

Plaintiffs are the widow and minor children of a workman who was killed when a machine, manufactured by respondent and sold by it to plaintiffs' intestate's employer, accidentally started. Claiming negligence and breach of warranty, plaintiffs sued four California corporations, a Connecticut corporation, and respondent, an Illinois corporation. All of the defendants except respondent have appeared, some of them have filed cross-complaints for indemnity, and depositions of various California residents have been taken. Respondent, claiming that the court had no jurisdiction over it, moved to quash service of summons purportedly made on it by service on its local distributor. The motion was granted and plaintiffs have appealed. ¹

In order to obtain personal jurisdiction over a foreign corporation, two requirements must be met: (1) the corporation must be 'doing business' in this state, within the meaning of that term as developed by our decisions; and (2) service must be made within this state on a person legally competent for that purpose. Respondent contended in the trial court, and contends here, that neither of these requirements was met in this case. For the reasons hereinafter set forth we reject both contentions.

I

The meaning of the term 'doing business,' as applied to jurisdiction to maintain litigation, has been the subject of a number of recent cases in this state, one of which is an opinion of this court in James R. Twiss, Ltd. v. Superior Court (1963) 215 Cal.App.2d 247, 30 Cal.Rptr. 98. As pointed out in that case, although at one time the courts required such contacts with the state of the forum as to amount to 'presence' of the foreign corporation within the jurisdiction, the modern rule, as stated by the Supreme Court in Henry R. Jahn & Son, Inc. v. Superior Court (1958) 49 Cal.2d 855, 858, 323 P.2d 437, 439, is as follows:

'The statute authorizes service of process on foreign corporations that are 'doing business in this State.' That term is a descriptive one that the courts have equated with such minimum contacts with the state 'that the maintenance of the suit does not offend 'traditional motions of fair play and substantial justice.'' International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 . Whatever limitation it imposes is equivalent to that of the due process clause. "[D]oing business' within the meaning of section 411 of the Code of Civil Procedure is synonymous with the power of the state to subject foreign corporations to local process.' Eclipse Fuel etc. Co. v. Superior Court, 148 Cal.App.2d 736, 738, 307 P.2d 739, 741; * * *.'

Since there is no conflict in the facts as presented to the trial court, the determination of whether or not they disclose a situation within this rule is a matter of law. 'In short, this is not a true case of conflicting evidence in which a reviewing court will refuse to disturb findings based thereon. [Citations.]' (Cosper v. Smith & Wesson Arms Co., (1959) 53 Cal.2d 77, 81, 346 P.2d 409, 412; Emsco Pavement, Etc., Corp. v. City of Los Angeles, (1959) 176 Cal.App.2d 760, 766, 1 Cal.Rptr. 814.) The various declarations disclose that (1) respondent had appointed Otto H. Rosentreter Co., one of the defendants herein, as its exclusive sales agent for its products in California, with express power and obligation to promote the sale of respondent's products by calling on all prospects at least once in every six months, to solicit orders for equipment and for repair parts, subject to the right of respondent to accept or reject such orders, to keep respondent accurately informed of developments in the territory and to report fully on its activities to respondent; (2) such representative had solicited the employer herein involved over a period of years, resulting ultimately in enough interest to justify the representative in asking respondent to submit to the employer a formal proposal for the equipment herein involved; (3) pursuant to such request, respondent had designed the equipment, offered to sell it to the employer, and ultimately shipped it to such buyer and billed it for the purchase price; (4) respondent's sales in California had aggregated between $50,000 and $100,000 a year; (5) the principal executive officers of respondent came to California to consult with its sales representatives on numerous occasions, and the representative and its employees went regularly to Chicago for sales and instructional meetings called by respondent.

These contacts bear a striking similarity to those held to be sufficient to sustain service of process in Cosper v. Smith & Wesson Arms Co., supra 5o Cal.2d 77, 346 P.2d 409, and are far more than were held sufficient in other recent cases on this point. (See: Empire Steel Corp. v. Superior Court (1961) 56 Cal.2d 823, 17 Cal.Rptr. 150, 366 P.2d 502; American Continental Import Agency v. Superior Court (1963) 216 Cal.App.2d 317, 30 Cal.Rptr. 654; ...