St. Mary's Oil Engine Co. v. Jackson Ice & Fuel Co.

• Citation: 138 So. 834,224 Ala. 152
• Decision Date: 17 December 1931
• Docket Number: 7 Div. 998.
• Parties: ST. MARY'S OIL ENGINE CO v. JACKSON ICE & FUEL CO.
• Court: Supreme Court of Alabama

138 So. 834

224 Ala. 152

ST. MARY'S OIL ENGINE CO v. JACKSON ICE & FUEL CO.

7 Div. 998.

Supreme Court of Alabama

December 17, 1931

Rehearing Denied Jan. 21, 1932.

Appeal from Circuit Court, Talladega County; R. B. Carr and W. B Merrill, Judges.

Action by the Jackson Ice & Fuel Company against the St. Mary's Oil Engine Company. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Knox Dixon, Sims & Dixon, of Talladega, for appellant.

Harrison & Stringer, of Talladega, for appellee.

BROWN J.

This action is by appellee, a domestic corporation, against the appellant, a nonresident or foreign corporation that has not qualified under the provisions of the Constitution and the statutes enacted in pursuance thereof, requiring foreign corporations to have a known place of business and to designate an agent upon whom process may be served. Constitution 1901, § 232.

The controversy between the parties arises out of a sale of two "St Mary's Diesel Oil Engines" and the equipment necessary to their installation, sold by the defendant to the plaintiff, and for which the plaintiff had paid in part.

The complainant on which the case was tried consists of counts D E, and F.

Count D seeks to recover the purchase money, after rescission of the contract of sale, because of a breach of warranty.

Count E declares on a breach of warranty embraced in the contract of sale.

Count F is double in its aspects, and is rested on a rescission of the contract because of the breach of warranty, and fraud and deceit practiced by the defendant in inducing the plaintiff to purchase the machinery.

The suit was instituted in Talladega county, Ala., and the summons and complaint was served by the sheriff of that county on defendant's office manager and bookkeeper, "M. F. Hucke, as Agent of St. Mary's Oil Engine Company, a body corporate, Defendant," commanding it to appear before the circuit court of said county within thirty days from the service of said process.

The fact of such service was communicated by Hucke to the defendant, and before pleading, the defendant appeared specially and, limiting its appearance to question the sufficiency of service to give the court jurisdiction over the person of the defendant, moved the court to quash the service, and by plea in abatement asserted that the county wherein the suit was instituted was not the proper venue.

The grounds on which the motion to quash was rested are that at the time the action was commenced and at the time of the service of the summons and complaint on Hucke, the defendant was a foreign corporation domiciled in the state of Missouri; "that it is not now, nor was it at any of said times doing business by agent in Talladega County;" that on to wit, the 14th of October, 1929, when the summons and complaint were served and noted on the process "as having been made upon one M. F. Hucke as agent for" defendant, said Hucke was not authorized or empowered to accept service for said corporation, nor was he such officer or agent of defendant upon whom valid service could be made, at the time and place of such service, "nor was said defendant doing business by him at said time and place within the provisions of section 10471, Code of 1923."

The plea alleges "that at the time this action was commenced and at the time of the purported service of said summons and complaint it (the defendant) was a foreign corporation, having its domicile in the State of Missouri, and that it was not at any of said times, and is not at the present time doing business in the State of Alabama, Talladega County, by agent or otherwise."

After a demurrer interposed by the plaintiff to the plea was overruled, by agreement-of the parties the question of law and fact raised by the motion and plea was submitted to the court, sitting without a jury, on depositions taken by the defendant and testimony given ore tenus by the plaintiff, and documentary evidence, and thereupon the motion to quash was denied and the plea overruled.

Thereafter the case was tried on its merits, resulting in a verdict and judgment for the plaintiff, and from that judgment the defendant has appealed.

The ruling of the court on the motion to quash the service presents the question of due process of law within the meaning of the Fourteenth Amendment of the Federal Constitution, and appellant's contention is that service, to be efficacious, must be made on an officer or agent of the corporation while such officer or agent is in the exercise of corporate functions-that is, performing an act or function for which the corporation was primarily created-and that Hucke, the person served, was not exercising any such power.

It appears without dispute that the defendant is a foreign corporation, and that it has not qualified to do business in Alabama; therefore the provisions of section 232 of the Constitution requiring foreign corporations to qualify by establishing a place of business in this state and the designation of an agent upon whom process may be served, as a prerequisite to engaging in business in this state, and the statute enacted in pursuance thereof, in so far as they provide a mode of service on foreign corporations, are confined to corporations that have qualified thereunder, and are foreign to the question in this case. Jefferson Island Salt Co. v. E. J. Longyear Co., 210 Ala. 352, 98 So. 119.

The law is well settled that to sustain an action against a nonresident in the state court, the court must have jurisdiction of the subject-matter of the suit and the person, acquired by service of process authorized by the statutes of the state, and consistent with due process under the Fourteenth Amendment of the Federal Constitution. And as a general rule, a nonresident, whether an individual or a corporation, is suable in the state courts upon a cause of action arising within the jurisdiction of the state, if service of process efficacious to give jurisdiction of the person can be perfected. Equitable Life Assurance Society v. Vogel's Ex'x, 76 Ala. 441, 52 Am. Rep. 344; Weymouth v. Washington, Georgetown & Alexandria R. Co., 1 MacArthur (8 D. C.) 19; 14a C.J. 1383, § 4099.

The cause of action declared on by the plaintiff arises out of an alleged breach of warranty embodied in a written contract between the parties of date July 17, 1927, whereby the defendant sold to the plaintiff two Diesel oil engines, one of the engines at the time of the sale being located in this state, and delivered f. o. b. Stevenson, Ala. Both engines with their equipment were installed in plaintiff's plant in Jackson, Ala., by the defendant.

Embodied in the contract were stipulations to the effect: (1) That when properly installed, the company (defendant) guarantees said machinery to deliver its full rated horse power and to operate successfully on crude oil or any of its distillates, provided the fuel oil used is clean and free from water and other impurities, and flows to the engine and is of a specified test. (2) That if complaint be made to the company by the purchaser that the machinery is not meeting the aforesaid guaranty, "then the Company shall have a right to make test of said machinery, and such test consists of three eight-hour day's operation of said machinery. Such test shall be conducted by the engineer of the Company who shall have entire charge thereof. The purchaser shall furnish the load necessary for such test, and all assistance, fuel and other things necessary for such test." That if the test is not satisfactory to the purchaser, the company shall have a reasonable time to remedy such "defects and deficiencies." (3) If within a reasonable time after such test "it shall appear to be beyond the power of the company to make such machinery operate according to said guarantee, then the purchaser shall remove the machinery at the expense of the company within a reasonable time and ship said machinery to the company at its expense, and the company shall refund to the purchaser all purchase money paid to the company, and the contract shall thereby become null and void."

At the time the contract was entered into, as appears from the contract itself, and from other evidence offered, the plaintiff paid part of the purchase money in cash and part by exchange of two engines of smaller horse power theretofore purchased by it from defendant, plaintiff giving its note for the balance.

The evidence offered by the plaintiff on the hearing of the motion further goes to show that the machinery did not operate as guaranteed, and plaintiff after notice removed the machinery from its plant, stored it, and notified the defendant.

In the meantime, the defendant had transferred and assigned plaintiff's notes to a finance corporation who had brought suit thereon in Clarke county against the plaintiff, which was still pending.

The evidence further shows that during the years 1927, 1928, and 1929, the defendant had sold some of the engines manufactured by it to different and sundry persons, as the court was authorized to find, under like contracts as that made with the plaintiff, some of which were erected and installed by the defendant, and through its engineers sundry inspections and tests were made of the machinery in the plaintiff's plant and in the plants of other of its customers.

It further appears that the defendant had, in the person of one Hill, who resided in Montgomery, Ala., a representative who had authority to take applications from prospective purchasers of its Diesel oil engines, to be submitted to and accepted by the defendant at its home office, and defendant advanced money to him in the way of commissions, and who by the authority of defendant's president called on plaintiff's president to adjust...