Stanga v. McCormick Shipping Corporation, 17491.

• Decision Date: 24 July 1959
• Docket Number: No. 17491.,17491.
• Citation: 268 F.2d 544
• Parties: Mr. and Mrs. A. T. STANGA, Appellants, v. McCORMICK SHIPPING CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

268 F.2d 544 (1959)

Mr. and Mrs. A. T. STANGA, Appellants, v. McCORMICK SHIPPING CORPORATION, Appellee.

No. 17491.

United States Court of Appeals Fifth Circuit.

June 25, 1959.

Rehearing Denied July 24, 1959.

COPYRIGHT MATERIAL OMITTED

William McM. King, Thomas J. Meunier, Ellis, Lancaster, Daly & King, Dodd, Hirsch, Barker & Meunier, New Orleans, La., for appellants.

Andrew R. Martinez, William E. Wright, New Orleans, La., Terriberry, Rault, Carroll, Martinez & Yancey, New Orleans, La., of counsel, for appellee.

Before HUTCHESON, Chief Judge, and CAMERON and BROWN, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

The basic questions here are (1) whether service of process upon a local travel agency which has booked the space, and executed and issued the passage ticket for a voyage wholly outside of Louisiana is valid as to the nonresident steamship company in a passenger's suit for injuries, and (2) if not, was the District Court right in ordering a final dismissal.

As the Court is not unanimous as to the correctness of the District Court's action in setting aside the particular service of process, this opinion is constructed in subparts to more clearly indicate its action. Chief Judge HUTCHESON and Judge BROWN are in substantial agreement with Parts I through VIII. In Part IX Chief Judge HUTCHESON and Judge CAMERON, who concurs in the result, affirm the holding on validity of the service of process, as to which Judge BROWN'S dissent is set forth in Part X. Part XI is Judge BROWN'S separate opinion on an issue the majority of this Court does not reach. In Part XII we reverse the action of the District Court in entering a final order of dismissal.

I.

Mrs. A. T. Stanga purchased a ticket for a round trip cruise from Miami, Florida to Havana, Cuba and Nassau aboard McCormick Shipping Corporation's SS Yarmouth Castle from the D. H. Holmes Travel Bureau in New Orleans, Louisiana. The ticket was purchased August 22, 1957, and the cruise left as scheduled from Miami on August 30. Unfortunately, while on board Mrs. Stanga alleges that her "shoe caught on the defective and unseaworthy metal stripping on a step of the stairway leading to the dining hall * * * catapulting her down the flight of stairs to the landing, below, * * *."

But as we indicate by our introductory question, this fact situation which raises the usual questions of shipowner's liability for personal injury has not been reached because of preliminary questions as to the adequacy of service of process. McCormick contends that the Holmes Travel Bureau was not a proper agent of McCormick for service. The District Court granted McCormick's motion to quash the process and thereafter dismissed the case for want of jurisdiction.

II.

As this case comes to us on affidavits, the facts relevant to service of process may be briefly summarized. McCormick is not a Louisiana corporation. It has not qualified to do business in Louisiana as a foreign corporation, LSA-Rev.Stat. § 12:202, nor appointed an agent for service of process in Louisiana as that section would require. It has no offices in Louisiana. It has no agents or employees in Louisiana — unless one turns out to be the Holmes Travel Bureau. None of its ships has ever been in New Orleans or other Louisiana ports.

McCormick is a Panamanian corporation. It has appointed Eastern Shipping Corporation in Miami, Florida as its limited general agent, under contract to sell space on the Panamanian SS Yarmouth Castle and Liberian SS Evangeliane, and to purchase stores for the ships, repair them, handle the payroll, deal with the Port Authorities, and lease necessary dock, warehouse and office space. It authorized Eastern to promote "sales of tickets through other agencies." There is no indication of how many travel agencies have been furnished with McCormick tickets by Eastern, but we may take judicial notice of the fact that there are thousands of travel agencies in this country and abroad capable of arranging for space with as many transportation companies.

Of course, McCormick and Eastern denied that Holmes Travel Bureau was an "employee" or "agent" of McCormick or Eastern. But their conclusions do not preclude our evaluation of the facts. See J. R. Watkins Co. v. Stanford, La.App.1951, 52 So.2d 325, 330.

There was no evidence of any written contract or agreement between Eastern and Holmes. Whoever may have initiated the action, Eastern sent Holmes a supply of blank "passage contract forms." McCormick and Eastern press hard the fact that Eastern had to approve the assignment of all space for passengers dealing with Holmes. This is correct as to the space, but as a practical matter Eastern did not undertake to pass on the individuals as all of Holmes' clients were apparently satisfactory to Eastern if space were open on the voyage. In fact, Mrs. Scully's (Mrs. Stanga's daughter who purchased the ticket for her) affidavit indicates that Holmes first gave her information and literature. Later at her request Holmes checked on space for Mrs. Stanga and three relatives. When she subsequently decided to purchase the ticket for the four passengers, Holmes handled the entire transaction for her in New Orleans by issuing the ticket in return for payment by her check for the full fare.

The passage ticket is headed "McCormick Shipping Corporation/Eastern Shipping Corporation, agents/Cruise Ticket/Passenger's Receipt," and there is a blank at the bottom where the contract is to be signed by an "Agent." The name "D. H. Holmes Travel Bureau" is typed above that blank on Mrs. Stanga's ticket No. C13779 which is then signed by Mr. W. H. Worden, Sr., one of the partners operating the Holmes Travel Bureau. On the reverse side of the ticket proper was a contract between "Carrier" and "Passenger" in twenty numbered clauses and about 4,000 words. At the bottom there was a place for the "Passenger's signature" which was signed by Mrs. A. T. Stanga. There was also the following: "McCormick Shipping Corporation/Eastern Shipping Corporation, Agent/by: ........... /Agent's Signature." Again, this was signed by Mr. W. H. Worden, Sr., as the agent of McCormick and Eastern.

Mr. James L. McCall, the other partner of Holmes, stated in his affidavit that a United States Deputy Marshal left a "Summons and Complaint" with him on June 3, 1958. It was directed to McCormick, and he was requested to send it on to Eastern, which he did. McCormick therefore had actual notice of the suit.

III.

As Holmes clearly was not a person described in F.R.Civ.P. 4(d) (3), 28 U.S.C.A. validity of the service of process depends wholly on it having been "served * * * in the manner prescribed by the law of the state in which the service is made for the service of summons * * * upon any such defendant * *."

Thus have we come face to face with the law of Louisiana. The Louisiana law, the background and development of which is set forth in Comment, 14 La.L.Rev. 625 (1954), provides for both (1) a foreign corporation which has, or should have, appointed an agent for receiving service of process, LSA-Rev.Stat. § 13:3471(5) (a-c), and (2) a foreign corporation which is not required to appoint an agent under Louisiana law. § 13:3471(5) (d). In the former case three methods are possible: (a) service upon the designated agent, (b) service upon any agent or employee over eighteen in any office maintained by the corporation in Louisiana, if the designated agent is not available, or (c) if neither the designated agent nor any agent or employee is available, then service may be made upon the Secretary of State.

In situation (2), of a foreign corporation not required to designate an agent, Section 3471(5) (d),¹ added by amendment in 1950, provides that service may be made upon any employee or agent of the foreign corporation if (i) it is carrying on business activities within the state, (ii) through its own employees or agents, and (iii) the cause of action results from or relates to acts performed in the State. Each of these requirements raises its own question. Was Holmes an employee or agent? Was McCormick carrying on business activities in Louisiana? Did the cause of action relate to an act performed in Louisiana?

IV.

In determining the sufficiency and validity of service of process on a foreign corporation under laws of the forum state, the problem divides itself along lines of state and national interest. The first part is to ascertain whether the state law means to encompass the challenged service. This question — at least as to diversity cases which this one is — is wholly a matter of state law, Lone Star Package Car Co. v. Baltimore & O. R. Co., 5 Cir., 1954, 212 F.2d 147, 153; Pulson v. American Rolling Mill Co., 1 Cir., 1948, 170 F.2d 193, 194; Rosenthal v. Frankfort Distillers Corporation, 5 Cir., 1951, 193 F.2d 137, 141. The second is conditioned on an affirmative answer to the first, and then presents the problem whether the state law as thus applied offends the Federal Constitution.

As a practical matter, the field soon narrows down to the effect and application of the 1950 Amendment, § 3471(5) (d), note 1, supra, concerning a foreign corporation "not one required by law to appoint an agent for service of process." Nothing is accomplished by inquiring whether McCormick was "doing business" within the State of Louisiana so as to be subject to LSA-Rev.Stat. §§ 12:202 and 13:3471(5) (a-c). If a foreign corporation is "doing business" under Section 202 and 3471, it certainly includes the lesser standard of one which "has engaged in business activities * * * through acts performed by its employees or agents in this state" under Section 3471(5) (d). But a conclusion of "doing business" is itself inadequate since Louisiana has long declared that the appointment of a process agent for such a corporation covers only a cause of action which arises out of or is connected with business done in Louisiana. "Even when present and amenable to suit it may...