Thompson v. Ford Motor Co.

• Decision Date: 15 June 1942
• Docket Number: 15429.
• Citation: 21 S.E.2d 34,200 S.C. 393
• Parties: THOMPSON v. FORD MOTOR CO.
• Court: South Carolina Supreme Court

21 S.E.2d 34

200 S.C. 393

THOMPSON v. FORD MOTOR CO.

No. 15429.

Supreme Court of South Carolina

June 15, 1942

W B. Martin, of Orangeburg, for appellant.

Cansler & Cansler, of Charlotte, N. C., and Robinson &amp Robinson, of Columbia, for respondent.

BONHAM Chief Justice.

Two issues present themselves for determination in this case:

(1) Was the respondent doing business in this State in the sense required to subject it to the jurisdiction of the Courts thereof, at the time this cause of action arose, and at the time of the commencement of the action; and

(2) Was service made on its agent so as to support a personal judgment against it.

These two questions are so interrelated, and are so intermingled in their discussion by some of the authorities which will be cited herein, that to some extent they will be treated together.

The action was instituted on May 9, 1941, by the service of a summons without a complaint, by delivering a copy of the summons to C. E. McAlister, an employee of the respondent while he was in the town of Branchville, South Carolina. In due time the respondent, a foreign corporation, served upon appellant's counsel a notice of a motion, seeking an order setting aside the service, and at the same time served upon appellant's counsel certain affidavits and a copy of a contract, dated December 22, 1938, between the respondent and D. W. Gavin & Co., Inc. In reply thereto, the appellant served his affidavit upon opposing counsel. Upon the affidavits and the exhibits attached thereto, the motion was heard and granted by the Honorable M. M. Mann, pre siding Judge, who filed an order, dated July 3, 1941, in which he set aside the service upon the respondent upon the grounds that C. E. McAlister was not an agent of the respondent upon whom process could be served, and that the respondent was not doing business in South Carolina, so as to subject it to the jurisdiction of the Courts of this State. The case comes to this Court upon appellant's exceptions to the order of Judge Mann.

From the affidavits submitted by the respondent, it appears that it is a corporation organized and existing under the laws of the State of Delaware, having its principal place of business at Dearborn, Michigan, that it maintains a branch office, and has a branch manager, at Charlotte, North Carolina, which latter office has jurisdiction over the sale of its products to dealers in South Carolina, that the contract referred to herein with D. W. Gavin & Co., Inc. (one of the original defendants in this action), was executed by an officer of D. W. Gavin & Co., Inc., at Charlotte, North Carolina, and that it was executed by the respondent at its principal place of business and that it was subsequently returned to respondent's branch office at Charlotte, North Carolina, through which branch all of respondent's agreements with dealers in this State are made. It further appeared from the respondent's affidavits that C. E. McAlister is an employee of the respondent under the direction of the Charlotte, North Carolina, branch thereof.

With reference to the duties of his employment with the respondent, this affiant said that he visits those who deal in the respondent's products for the purpose of encouraging the sale of parts and accessories, of assisting dealers in training their mechanics, and, when requested by the dealers, by reason of his technical knowledge of, and familiarity with cars and trucks manufactured by the respondent, to assist the mechanics of the dealers in ascertaining the cause of mechanical troubles in cars or trucks complained of by customers of the dealers, and advising such mechanics how to correct such troubles. The affiant admitted the delivery to him of a copy of the summons in this case while he was at Branchville, South Carolina, but made no specific reference to his duties in connection with his sojourn at that place. The other affidavits of the respondent likewise made scant reference to the purpose of Mr. McAlister's trip on this particular occasion. The affidavit of J. J. Donavan, branch manager of respondent's branch at Charlotte, North Carolina, also stated that C. E. McAlister was at Branchville, South Carolina, on May 9, 1941 and that a copy of the summons was there delivered to him, but was silent as to further specific facts relating to Mr. McAlister's exact duties in Branchville.

The affidavit of the appellant alleged that he purchased a Ford truck from D. W. Gavin & Co., which advertised with advertisement furnished by the respondent, that D. W. Gavin & Co. was a duly authorized Ford dealer, that appellant had no notice of any limited relations existing between respondent and D. W. Gavin & Co., and that he paid the respondent's listed price therefor, under a warranty, not from D. W. Gavin & Co., but from respondent, that the said truck was of good workmanship, in sound condition, and that the respondent would, within a period of ninety days, and before the truck had been driven four thousand miles, repair defects which may appear and develop therein; that immediately, and within said period and mileage, the motor in the truck proved to be seriously defective in a manner which affiant alleged; that appellant immediately notified respondent's said dealer, at St. George, South Carolina, and that the dealer attempted and failed to rectify the trouble.

The affiant further deposed that on March 26, 1941, he wrote respondent of the truck's defective condition, and that respondent replied, stating that "we note that your truck was purchased through our dealer at St. George, S. C.", and suggesting that appellant return the truck to the said dealer in order that the dealer might be in a position to check the unit completely and be in a position to advise appellant what should be done. Thereupon appellant again, in pursuance of the terms of this letter, a copy of which respondent had sent to the dealer, took the truck to the dealer, who a second time failed to rectify or find the trouble or defect therein. Deposing further, appellant stated that a few days prior to May 9, 1941, in pursuance of the said letter, one C. E. McAlister telephoned him to the effect that respondent had sent him as its agent and representative in the place of a Mr. F. D. Russell, to contact appellant regarding the defective truck, and requested appellant to send it to the dealer's place of business. This was done, and pursuant to the said letter C. E. McAlister examined the motor in the truck, but failed to locate the cause of the trouble, and therefore was unable to repair it, and that subsequently C. E. McAlister was served with the summons herein, whereupon C. E. McAlister transmitted the summons to his principal and employer, the respondent.

Attached to appellant's affidavit was the letter which has been referred to, marked "Exhibit A", together with a second letter, marked "Exhibit B", from respondent to appellant, dated May 5, 1941, in which respondent stated: "We are asking our representative, Mr. F. D. Russell to contact you in the very near future regarding this matter" with further reference to the Ford truck. In connection with the contents of this letter appellant had deposed that respondent had sent C. E. McAlister in the place of F. D. Russell.

The contract between respondent and D. W. Gavin & Company is a long, highly complex, and ingenious instrument, the copy of which, in the transcript of record, fills seventeen printed pages. It is an inescapable conclusion from the affidavits filed by the respondent that the contract was prepared by, and phrased by, the respondent. Two of such affidavits, one by the manager of respondent's branch at Charlotte, North Carolina, and one by the chief clerk of that office, refer to the present contract as being similar to the standard form of sales agreement between respondent and its dealers. Such standard forms could scarcely have been prepared by any one except the respondent.

The contract in the present case contains many interesting provisions. It provides that the Company agrees to sell, and the dealer agrees to purchase for resale, Ford passenger automobiles, commercial automobiles, trucks, accessories and other things, upon certain conditions, "subject to the right reserved by Company to sell to other dealers and direct to retail purchasers in the United States without obligation of any kind to Dealer on any such sale." It provides that the "Company will sell its products to Dealer at such prices as are from time to time established by Company plus Company's charge for distribution and delivery" together with a provision for reimbursing the Company for certain tax payments.

It is provided that "title to all Company products, except in a case where the invoice shows sale to be on credit, shall be and remain with Company until actual receipt of the full purchase price in cash by Company." With reference to checks and other negotiable paper from the dealer, the agreement provides: "Until Company has received cash in full payment of any such check, draft or other commercial paper, its right to retake and resell Company products for which such paper is issued shall continue." It is provided that the prices of all Company products shall be subject to change from time to time, that the dealer agrees to maintain a place of business "and only one place of business" (subject to one or two exceptions) and that such place of business shall be "located in a place and equipped in a manner acceptable to Company; to display conspicuously thereon approved Ford signs; to install and maintain therein the tools, machinery and equipment recommended by Company; to employ sufficient, competent salesmen to solicit adequately all potential purchasers of Company products in the...