Travelers Ins. Co. v. George McArthur and Sons

• Decision Date: 27 October 1964
• Citation: 25 Wis.2d 197,130 N.W.2d 852
• Parties: The TRAVELERS INSURANCE CO., a foreign corp., Plaintiff-Respondent, v. GEORGE McARTHUR & SONS, a domestic corp., Defendant-Respondent, Welded Tube Co. of America, Philadelphia, Pa., Impleaded Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 852

130 N.W.2d 852

25 Wis.2d 197

The TRAVELERS INSURANCE CO., a foreign corp., Plaintiff-Respondent, v. GEORGE McARTHUR & SONS, a domestic corp., Defendant-Respondent Welded Tube Co. of America, Philadelphia, Pa., Impleaded Defendant-Appellant.

Supreme Court of Wisconsin.

Oct. 27, 1964.

The defendant, George McArthur & Sons (hereinafter McArthur), is a Wisconsin corporation engaged in the manufacture and sale of hammocks. The hammocks are suspended upon a metal hammock stand. It appears that McArthur sold such a hammock and stand to Barker's, Inc., a store in Orange, Connecticut. A customer of Barker's was injured as the result of an alleged defect in the hammock stand. She sued Barker's there and recovered. The Travelers Insurance Co., Barker's insurer, reimbursed Barker's for the amount of the judgment and then commenced an action against McArthur here in Wisconsin. McArthur then impleaded Welded Tube Company of America (hereinafter Welded Tube). The corss-complaint against Welded Tube alleges that the hammock stand was manufactured by Welded Tube, a Pennsylvania corporation, not licensed in Wisconsin, and that the hammock stand was defective. It was agreed by stipulation that this hammock stand was never in Wisconsin, but at the request of McArthur, Welded Tube shipped the hammock stand from its factory directly to Barker's at Orange, Connecticut.

Petersen, Sutherland, Axley & Brynelson, Madison, for appellant.

Hill, Miller & Quale, Baraboo, for defendant-respondent.

HEFFERNAN, Justice.

The pleadings do not reveal how, when, or where the contract between McArthur and Welded Tube was entered into.

The impleaded defendant demurred to the cross-complaint on the ground that upon the face thereof the court lacks jurisdiction over the person of Welded Tube, in that 'Welded Tube Company of America is not engaged in substantial or in isolated activities within this state, whether such activities are wholly interstate, intrastate or otherwise; and further that * * * the action does not arise out of any act or omission within this state by the defendant * * *.'

The trial court overruled the demurrer on the basis that the policy of the law was to avoid multiplicity of suits, and in the event the action could not be maintained here it would mean the commencement of another lawsuit in Pennsylvania.

The circuit court found that jurisdiction was based on sec. 262.05(3), State., in that the contract was entered into in Wisconsin and that this, therefore, constituted an 'act or omission' within Wisconsin by the defendant. We cannot be agree with the learned trial judge.

Chapter 262 relates to the commencement of civil actions, and sec. 262.06, Stats., describes methods of obtaining personal service over defendants. No objection is raised to the method of service, but the defendant by its demurrer claims that there are no facts alleged that are sufficient to confer personal jurisdiction as provided in sec. 262.05, Stats.

The trial court relied upon section (3) of 262.05, which provides as follows:

'262.05 Personal jurisdiction, grounds for generally. Al court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 262.06 under any of the following circumstances:

'(3) Local act or omission. In any action claiming injury to person or property within or without this state arising out of an act or omission within this state by the defendant.'

The trial court reasoned that this section was applicable since the injury occurred without the state as the result of an act or omission within this state by the defendant, and that act within the state was 'when they (Welded Tube) stepped across the line and entered into a contract in Wisconsin.'

We can find no allegations in the cross-complaint, in the stipulation, or elsewhere that lead to the conclusion that this was a Wisconsin contract or that there was an act or omission by Welded Tube in wisconsin, The only fact that can be gleaned from the cross-complaint or stipulation is that McArthur ordered hammock stands from Welded Tube, but that at the request of McArthur these stands never came into Wisconsin and were sent from Pennsylvania to Orange, Connecticut. If jurisdiction is to be preducated on the situs of the contract, the facts as alleged are not dispositive of that question. The facts are not sufficient to resolve this problem on the basis of any rules of contract law.

McArthur in its argument before the circuit court attempted to found jurisdiction upon sec. 262.05(4), Stats., which provides as follows:

'262.05 Personal jurisdiction, grounds for generally. A court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 262.06 under any of the following circumstances:

'(4) Local injury; foreign act. In any action claiming injury to person or property within this state arising out of an act or omission outside this state by the defendant, provided in addition that at the time of the injury either:

'(a) Solicitation or service activities were carried on within this state by or on behalf of the defendant; or

'(b) Products, materials or things processed, serviced or manufactured by the...