Tilley v. Keller Truck & Implement Corp.

• Decision Date: 09 March 1968
• Docket Number: 22,319 and 22,320,Nos. 22,249,s. 22,249
• Citation: 200 Kan. 641,438 P.2d 128
• Parties: Donald D. TILLEY, (et al.) (Consolidated with Cases), Appellants, v. KELLER TRUCK AND IMPLEMENT CORPORATION, a corporation, Appellee, and International Harvester Company, a corporation, Defendant. N. 44968.
• Court: Kansas Supreme Court

Page 128

438 P.2d 128

200 Kan. 641

Donald D. TILLEY, (et al.) (Consolidated with Cases Nos 22,249, 22,319 and 22,320), Appellants, v. KELLER TRUCK AND IMPLEMENT CORPORATION, a corporation, Appellee and International Harvester Company, a corporation, Defendant.

N. 44968.

Supreme Court of Kansas.

March 9, 1968.

Syllabus by the Court

1. In construing a statute the legislative intent is to be determined from a general consideration of the whole act.

2. In determining legislative intent the court may properly look to the purpose to be accomplished, the necessity and effect of the statute.

3. The constitutionality of a statute is presumed and all doubts must be resolved in favor of its legality and before it may be stricken down it must clearly appear the statute violates some express or implied provision of the constitution.

4. The provisions of K.S.A. 60-308, authorizing personal service outside the state, are examined, construed and determined to be constitutionally within the due process requirements of the Fourteenth Amendment to the Constitution of the United States.

5. Persons and corporations engaged in the manufacture, sale or servicing of products submit themselves to in personam jurisdiction of the courts of this state if they have received or can anticipate some direct or indirect financial benefit from the sale, trade, use or servicing of their product within this state.

6. In an action brought in Kansas against a local retail dealer of Colorado arising from injuries received in Kansas based on negligence alleged in the inspection, sale and servicing of a defective and hazardous truck, the record is examined and it is held the defendant has not submitted itself to the jurisdiction of the courts of this state within the requirements of K.S.A. 60-308(b)(5). It is further held the order dismissing the action as to the defendant is affirmed.

J. Eugene Balloun, Great Bend, argued the cause, and H. Lee Turner, Max E. Eberhart and Jack G. Duncan, Great Bend, were with him on the brief for appellant.

Tudor W. Hampton, Great Bend, argued the cause, and Jerry M. Ward and Herb Rohleder, Great Bend, were with him on the brief for appellee.

FROMME, Justice:

This appeal was taken from an order quashing service and dismissing four cases as they relate to Keller Truck and Implement Corporation. Claims for relief in damages were filed in four separate cases asking for in personam judgments based upon injuries received in a car-truck accident in Barton County, Kansas. The cases were consolidated for all purposes necessary to the instant appeal. Summons was served in each case upon the defendant Keller Truck personally in the State of Colorado as provided in K.S.A. 60-308.

The order quashing service and dismissing the actions against Keller Truck does not affect the defendant International Harvester Company, a corporation, and our decision here will not predispose the claims for relief so far as they relate to the International Harvester Company.

The injuries received by each of the plaintiffs are alleged to have been caused when the right rear wheel of a new truck owned and operated by the plaintiff Donald D. Tilley broke completely. The truck overturned in the highway immediately in front of a car owned and operated by plaintiff Frank V. Kincaid. A collision of the car and truck resulted. It was alleged the wheel was defectively manufactured, assembled and tested by the manufacturer, International Harvester Company. It was further alleged the retailer, Keller Truck, was negligent in selling, inspecting and delivering the same. A second count in each claim for relief alleged a breach of express and implied warranty of fitness for use. The other two plaintiffs were passengers in the Kincaid vehicle.

The facts upon which the order of dismissal was based are not in dispute. These facts are taken from the petition, from an affidavit and from depositions obtained and filed in support of the motions to dismiss.

The plaintiff Tilley lived in Boulder, Colorado, and purchased the truck from the defendant Keller Truck in Lafayette, Colorado. Keller Truck is a Colorado corporation and is an authorized retail dealer in new trucks manufactured by International Harvester Company. Plaintiff Tilley was engaged in the cattle business at Boulder, Colorado. After purchasing the truck Mr. Tilley drove it to Missouri and on returning home he took the truck to the dealer for a 'thousand mile checkup'. The mechanic checked the wheel flange nuts, noticed a grease leak on the wheel flange and completed the work required by the 'thousand mile checkup'. At that time the odometer registered 1600 miles.

Mr. Tilley then hauled a second load of cattle destined for Missouri but the right rear wheel broke in Barton County, Kansas. The injuries complained of in these actions resulted.

Keller Truck did a strictly local retail business in Lafayette, which city is over 150 miles from the Kansas-Colorado line. The manager of the corporation testified he had been with Keller Truck more than three years and during that time they had not sold a single truck to a non-resident of Colorado. The corporation has never been qualified to do business in Kansas and has not sought such qualification. It has never maintained a place of business or a point of distribution, owned or used real or personal property, delivered merchandise to or performed services for residents in Kansas. None of its officers, directiors, employees and agents have resided in Kansas during their association with the corporation. The company has never solicited business or performed services within the State of Kansas and products sold or serviced by it are not consumed or used in Kansas in the ordinary course of trade and use.

The manager of the corporation did know, or had reason to know, the plaintiff Tilley was going to use the truck to haul some cattle to Missouri. He could reasonably foresee this truck would travel through the State of Kansas.

In order to more clearly define the posture of the parties in this case we will refer to the appellants as the plaintiffs and to the appellee Keller Truck as the defendant or the corporation.

The plaintiffs contend the business activities of the defendant fall within the purview of K.S.A. 60-308(b)(5) and subject the corporation to in personam jurisdiction in Kansas. They contend provision (ii) of subsection (5) of the statute should be construed to authorize such jurisdiction when the defective truck caused injury in Kansas and defendant could foresee a use of the truck in Kansas.

The Defendant in this case could reasonable anticipate the sale and service in Colorado would have potential consequences in Kansas if its acts and omissions resulted in injury in this state.

The trial court determined that the particular provision of the statute (K.S.A. 60-308(b)(5)(ii)) required more than an injury coupled with a foreseeable use of the truck in Kansas. It based its decision upon a lack of minimum contact by which the defendant purposefully availed itself of the privilege of conducting activities within Kansas, and without which it could not be subjected to in personam jurisdiction.

In order to understand the permissible reach of our statute authorizing personal service outside the state it is necessary to review briefly certain decisions of the United States Supreme Court which bear upon the due process requirement of the Fourteenth Amendment to the United States Constitution, § 1.

Prior to the year 1945 the traditional approach to accessiblity of a defendant to in personam jurisdiction was based upon 'presence of domicile' in the forum state, (Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091; Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278, 132 A.L.R. 1357.) or upon 'implied consent' from doing business in the forum state. (Lafayette Ins. Co. v. French et al., 59 U.S. (18 How.) 404, 15 L.Ed. 451; People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587; Intertional Harvester Co. v. Commonwealth of Kentucky, 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479.)

The more recent approach to accessibility grows out of five decisions of the United States Supreme Court in which that court defined certain concepts of due process in several fact situations to determine if personal service outside a forum state upon a 'non-domiciliary' met the substantive due process requirement of the Fourteenth Amendment.

The term 'non-domiciliary' will be used to designate a person or corporation not accessible to in personam jurisdiction on the basis of presence, domicile, residence or doing business as understood prior to 1945.

The five decisions of the Supreme Court of the United States had all appeared prior to the enactment of K.S.A. 60-308 and the notes of the advisory committee that assisted in drafting this legislation make reference to the first two of these decisions. These decisions are: Internat. Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057, decided in 1945; Travelers Health Ass'n Commonwealth of Virginia ex rel. State Corporation Commission, 339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154, decided in 1950; Perkins v. Benguet Consol. Min. Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485, decided in 1952; McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223, decided in 1957; and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, decided in 1958.

The decisions involved a variety of state statutes in a variety of fact situations but all had one common determinative question. (i. e.) What are the proper standards to be met when imposing in personam jurisdiction upon a non-domiciliary, in order to comply with the due process clause?

In International Shoe the court stated:

'* * * (D)ue process requires only that in order to subject a defendant to a judgment in...