Trussell v. BEAR MANUFACTURING COMPANY

• Decision Date: 09 March 1963
• Docket Number: Civ. A. No. 619.
• Citation: 215 F. Supp. 802
• Parties: James R. TRUSSELL, Plaintiff, v. BEAR MANUFACTURING COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Tennessee

215 F. Supp. 802

James R. TRUSSELL, Plaintiff, v. BEAR MANUFACTURING COMPANY, Defendant.

Civ. A. No. 619.

United States District Court E. D. Tennessee, Winchester Division.

March 9, 1963.

Clinton H. Swafford, Winchester, Tenn., Sizer Chambliss, Chattanooga, Tenn., for plaintiff.

Josiah Baker, Chattanooga, Tenn., for defendant.

NEESE, District Judge.

This is a tort action. The plaintiff Trussell purchased second-hand a wheel balancer manufactured by the defendant Bear. The original purchase was made from Bedford Auto Supply, a jobber distributing and providing some servicing of Bear's equipment. While utilizing this wheel balancer in his business in Winchester, Tennessee, plaintiff was injured when the balancer separated from a motor vehicle wheel which he was undertaking to balance with the mechanism, and struck his leg. This action followed.

Substituted service of process was had on the defendant Bear through the Tennessee secretary of state, T.C.A. §§ 20-220 and 48-923, and process was served additionally on Malcolm Cade, allegedly an agent of the defendant in this jurisdiction. The defendant is now appearing specially to attack the service of process, the venue of the action, and the jurisdiction of this court.

This court is authorized to follow Tennessee law in the service of process. Rule 4(d), Federal Rules of Civil Procedure.

The defendant Bear is a Delaware corporation with its principal place of business in Illinois. It has no physical facilities at all within Tennessee. It has not designated an agent in this state, on whom process against it may be served. Therefore, if the defendant Bear has made use of the privilege which is extended by law to foreign corporations to do business within Tennessee after proper domestication, it is thereby deemed to have constituted the Tennessee secretary of state its agent for the service of process in situations where such actions arise out of unauthorized business done by it within Tennessee. T.C.A. § 48-923; Shuler v. Wood, D.C.Tenn. (1961), 198 F.Supp. 801, 802; Radford v. Minnesota Mining & Manufacturing Co., D.C.Tenn. (1955), 128 F.Supp. 775, 777-778. Any such transactions complained of, however, must have arisen within this state, and attendant circumstances must have localized the defendant's activities and evidenced "* * * the `presence' in some sense of the corporation in the state". Tucker v. International Salt Co. (1961), 209 Tenn. 95, 101, 349 S.W.2d 541, 544, i. e., where the facts show that the activities of the corporation reveal a "substantial connection" with the state involved. International Shoe Co. v. State of Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95; McGee v. International Life Ins. Co. (1957), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223.

The Court finds from the supporting affidavits submitted in this proceeding that the intrastate activities of the defendant Bear within Tennessee are considerable and that this cause of action arose directly from such intrastate activities:

The defendant Bear entered into a selling agreement with a Tennessee jobber, Bedford Auto Supply, which sold the offending balancer to a Tennessee purchaser from whom the plaintiff Trussell afterward bought it. Bear agreed to furnish Bedford the services of one of its representatives to conduct meetings with Bedford's salesmen, and it also agreed to furnish installation supervision to Bedford's customers after one of its units had been sold and installed. To perform these intrastate portions of its selling agreements, the defendant Bear engages and keeps available for such purposes three of its own representatives.

The aforenamed Cade was Bear's representative in the area of Tennessee where the Bedford Auto Supply, its original customer, and the plaintiff Trussell both are located. Cade agreed to supervise the installation of the defendant Bear's major equipment when sold by Bedford, or another of Bear's jobbers or distributors, within the territory assigned him by the manufacturer; to instruct the customers of Bedford, and other like jobbers and distributors, in the use of such equipment after the sales were consummated; and to promote the sale and use of Bear's equipment in his assigned territory.

While Cade is denominated in his agreement with the defendant Bear as an "independent contractor", these parties lacked the power by the form of their contract to convert an exclusively local business, subject to state control, into an interstate commerce business protected by the federal commerce clause. Browning v. Waycross (1914), 233 U.S. 16, 23...