Spartan Equipment Co. v. Air Placement Equipment Co., 233

• Decision Date: 29 January 1965
• Docket Number: No. 233,233
• Citation: 263 N.C. 549,140 S.E.2d 3
• Parties: SPARTAN EQUIPMENT COMPANY, v. AIR PLACEMENT EQUIPMENT COMPANY.
• Court: North Carolina Supreme Court

Page 3

140 S.E.2d 3

263 N.C. 549

SPARTAN EQUIPMENT COMPANY, v. AIR PLACEMENT EQUIPMENT COMPANY.

No. 233.

Supreme Court of North Carolina.

Jan. 29, 1965.

Dockery, Ruff, Perry, Bond & Cobb, by William H. McNair, Charlotte, for defendant appellant.

Grier, Parker, Poe & Thompson, by Gaston H. Gage, Charlotte, for plaintiff appellee.

PARKER, Justice.

The parties stipulated 'the mechanics of service and return set forth in subsections (a) and (b) of Section 55-146 of the General Statutes of North Carolina were in all respects complied with.'

Judge Walker heard defendant's motion upon two affidavits of T. M. Pfaff, president of plaintiff, to which were attached and made parts thereof thirteen letters by plaintiff and defendant, and upon an affidavit of H. L. Kalousek, president of defendant, an affidavit of James B. Kelly, southeastern territorial manager for defendant, and an affidavit of Jetton King, president of Arrow Construction Equipment Company.

From the affidavits offered by the parties, and from plaintiff's verified complaint, Judge Walker made specific findings of fact. In his findings of fact, after reciting a summary of plaintiff's two causes of action, and that plaintiff is a North Carolina corporation, with its principal office in Mecklenburg County, North Carolina, and that defendant is a Missouri corporation, Judge Walker made the following findings of fact:

'[T]hat (3) on numerous occasions defendant's agents and salesmen, and in particular the defendant's southeastern territorial manager, James B. Kelly made visits in the State of North Carolina on Behalf of the defendant corporation and therein solicited business, instructed purchasers as to the use of machines manufactured by defendant, and supervised the installations of said machines, particularly from October, 1960, to March, 1963, and the Court finds specifically as fact from the complaint and affidavits presented to the Court at the time of said hearing that (4) in particular, the plaintiff's order of September 5, 1961, for a CP-30 concrete placer involved in the alleged breach of contract action and the order for a model 505 mix-elevator involved in the tort action were solicited by agents and representatives of the defendant corporation in the State of North Carolina, and that the said alleged breach of contract cause of action arose out of a contract made by and between plaintiff and defendant at the time complained of in the State of North Carolina and to be performed in the State of North Carolina, and (5) that the alleged cause of action in tort arose out of defendant's activity in the State of North Carolina at the time complained of; and (6) the Court finds further from the affidavits presented and letters appended thereto that there was a reasonable expectation on the part of the defendant that all the said goods solicited, purchased, or installed in North Carolina were to be used within the State of North Carolina; (7) the Court finds from the evidence presented that the defendant has in fact more than the required minimum connection with the State of North Carolina and directly with customers within the State of North Carolina; (8) the Court finds that the arrangements for the payment on a model 610T Airplaco truck rig were completed by agents and representatives of defendant corporation on defendant's behalf within the State of North Carolina; and (9) the Court finds that the defendant did in fact at the time complained of have a direct financial interest in the sale of its products in the State of North Carolina made directly by defendant corporation to purchasers of its products in the State of North Carolina, such sales being handled by representatives of the defendant corporation; (10) the Court finds that Section 55-145 of the General Statutes of North Carolina as applied to the facts of this particular case would not deprive the defendant of its property without due process of law nor deny it the equal protection of the law under the North Carolina Constitution and the United States Constitution.'

Based upon his findings of fact, Judge Walker made the following conclusions of law: Defendant has sufficient contacts with the State of North Carolina so as not to be deprived of its property without due process of law, and so as not to be denied the equal protection of the law, under the United States Constitution and the North Carolina Constitution, in being compelled to submit to the jurisdiction of the courts of the State of North Carolina.

Based upon his findings of fact, and upon his conclusions of law, Judge Walker entered an order denying defendant's motion, and holding that service of summons and complaint on defendant is valid and proper by virtue of G.S. § 55-145, and that such service of process would subject the defendant to a judgment in personam. In his order he allowed defendant 60 days from its date to answer or otherwise plead.

Defendant assigns as error the judge's findings of fact Nos. 3, 4, 5, 6, and 7, which assignments of error it has brought forward and discussed in its brief. Finding of fact No. 7 'that the defendant has in fact more than the required minimum connection with the State of North Carolina and directly with customers within the State of North Carolina' is, as defendant contends, a conclusion of law. Finding of fact No. 5 'that the alleged cause of action in tort arose out of defendant's activity in the State of North Carolina at the time complained of' apparently refers to the second cause of action alleged in plaintiff's complaint, and is so discussed in defendant's brief. Even if it is not supported by competent evidence, as defendant contends, it is not decisive in the determination of defendant's motion to quash the service of process here.

The challenged findings of fact Nos. 3, 4, and 6 are supported by statements in the affidavits of T. M. Pfaff, president of plaintiff, and in letters attached thereto, and by allegations of fact in the verified complaint.

In one of Pfaff's affidavits the following facts are stated: In the latter part of April or the first part of May 1958, M. G. Parke, an agent and employee of defendant, was in Mecklenburg and Gaston Counties, North Carolina, in connection with equipment sold by his employer. Later, Parke was in High Point, North Carolina, to demonstrate the use and operation of a Model CP-10 concrete placer sold by his employer, and to instruct the purchaser thereof in its operation. M. G. Parke was again in North Carolina in the latter part of September 1959 on his employer's business to instruct the purchaser of his employer's equipment in its use. In March 1958 plaintiff signed an exclusive distributor agreement with defendant. Plaintiff signed this agreement in North Carolina. This agreement had already been signed by defendant. On 5 September 1961 plaintiff purchased from defendant a Model CP-30 concrete placer, pursuant to its distributor agreement. The distributor agreement was to be performed in North Carolina. The warranties alleged in plaintiff's first cause of action were given to plaintiff in North Carolina. The breach of warranty as to its not being merchantable occurred in the State of North Carolina. M. G. Parke was in North Carolina on his employer's business on other occasions in the year 1958 to negotiate with plaintiff on behalf of his employer, and to explain and instruct plaintiff in the use and operation of his employer's equipment. In March or April 1959 M. G. Parke was again in North Carolina on his employer's business. In February 1960 M. G. Parke was in Wilmington, North Carolina, on his employer's business in connection with the sale of his employer's equipment to Concrete Construction, Inc., to explain the use and operation of this equipment to the purchaser. James B. Kelly, territorial manager for defendant, was in Charlotte, North Carolina, on 30 and 31 March 1961 to explain defendant's new products and complete line of equipment to plaintiff. In September 1961 Kelly was again in North Carolina on defendant's business to set up and put into operation a Model CP-30 concrete placer which plaintiff had ordered from defendant. The order for this concrete placer was solicited by defendant from plaintiff in the State of North Carolina. Prior to this defendant solicited purchases of large quantities of its equipment from plaintiff and others in the State of North Carolina. On 7 March 1961 James B. Kelly was in Charlotte, North Carolina, for the purpose of soliciting business for defendant, and making calls on customers with representatives of plaintiff. In 1963 defendant sent its representatives into the State of North Carolina for the purpose of soliciting business and promoting sales. The equipment mentioned in his affidavit was manufactured and produced by the defendant, and shipped by it into the State of North Carolina for use and distribution within the State. On 9 April 1963 Arrow Construction Equipment Company became a distributor of defendant's equipment within the State of North Carolina, and as a result large quantities of products manufactured by defendant have been shipped into the State of North Carolina for use and distribution therein.

In a letter signed by James B. Kelly, territorial manager, addressed to Pfaff, Spartan Equipment Company, and received 8 September 1961, appears the following: 'We will ship the CP-30 on September 8, if possible, otherwise it will be Monday, September 11. I have advised our traffic man to expedite the shipment all possible and wire you routing and Pro No. I will schedule my trip to arrive as soon as the equipment arrives in order to set it up and put it into operation.' Attached to Pfaff's affidavit is another letter by defendant signed by Kelly, addressed to an officer of plaintiff, dated 27 February 1962, which reads in part: 'I will call you either on Tuesday or Wednesday and let you know my definite flight arrival time. I hope you have some really...