Tucker v. International Salt Co.

• Decision Date: 06 September 1961
• Citation: 13 McCanless 95,209 Tenn. 95,349 S.W.2d 541
• Parties: , 209 Tenn. 95 Paul TUCKER, Plaintiff in Error, v. INTERNATIONAL SALT COMPANY, Defendant in Error.
• Court: Tennessee Supreme Court

Page 541

349 S.W.2d 541

13 McCanless 95, 209 Tenn. 95

Paul TUCKER, Plaintiff in Error, v. INTERNATIONAL SALT COMPANY, Defendant in Error.

Supreme Court of Tennessee.

Sept. 6, 1961.

Bearman & Bearman, Memphis, for plaintiff in error.

John H. Wilbur, of Armstrong, McCadden, Allen, Braden & Goodman, Memphis, for defendant in error.

SWEPSTON, Justice.

The only question for decision is whether or not under the stipulated facts the defendant in error, the International Salt Company, is doing business in the State of Tennessee so as to be subject to the jurisdiction of the courts of this State.

The trial court held that the Salt Company was not so doing business, sustained the plea in abatement and held that the attempted service of process on the traveling salesman of the Salt Company who resides in Shelby County to be void.

In the interest of brevity, the stipulation of facts will be somewhat abbreviated. Paul Tucker sued the Salt Company for breach of contract and on a quantum meruit for damages for breach of a contract between Tucker and the Salt Company. Service of process was attempted by serving the same upon Lloyd T. Williams, Jr., the sole salesman who represents the International Salt Company for sale to wholesale grocers and manufacturers in Shelby County, Tennessee. The Salt Company is a New Jersey corporation with its principal office in Pennsylvania; there are no officers or directors of the Salt Company in the State of Tennessee and at the time of the service of process and since that time Lloyd T. Williams, Jr., was neither an officer or other head of the Salt Company, nor was he a director of that Company.

Said Williams has a written contract with the Salt Company to sell its products, receives a salary of $526 per month plus a bonus if sales exceed a minimum quota; he carries and distributes a card upon which there is inscribed in large black letters International Salt Company Clarks Summit, Pennsylvania, and in smaller letters Lloyd T. Williams, Jr., Special Merchandising Representative; he uses and distributes literature supplied by the Salt Company to aid him in his sales of its products, which literature he keeps in the automobile furnished to him by the Salt Company, which automobile is owned by the Salt Company, registered in Shelby County, Tennessee, and Williams is given an expense allowance for the operation and upkeep of said automobile; Williams signs order blanks when he receives orders from a customer but no contracts between the Salt Company and wholesale or retail dealers in the State of Tennessee are made but said orders, which are sent to the Salt Company office by either Williams or the customer, are expressly designated as 'offers', which must be accepted by the International Salt Company upon receipt of it in Pennsylvania before becoming binding; payments by customers for products delivered to them are made directly to the Salt Company in Pennsylvania; Williams carries samples of his Company's products, he is allowed to handle only the Salt Company's products; he makes a weekly report; he has called on two or three past due accounts, and in one case was given a check in payment of a past due account payable to the Salt Company which he forwarded directly to the Company; his immediate superior resides and has offices in New Orleans, Louisiana and he has no superior residing in the State of Tennessee; Williams has no authority to adjust orders for the Salt Company, as adjustments are handled through the New Orleans office, but he can pass on to the customer the Company's position on any matter that needs adjustment if requested to do so by the Company; Williams spends about four days a month on the average soliciting orders in Tennessee; all invoices sent with products from the Salt Company to Shelby County bear the name of Williams as salesman; the Salt Company during the year 1960 made approximately $10,000 from sales made to wholesale grocery houses in the Western District of Tennessee alone; Williams occasionally suggests to the Salt Company new ideas and methods in selling the Company's products in this area.

The attempted service of process was made under T.C.A. § 20-217 providing as follows:

'Service on corporate officers.--Service of process on the president or other head of a corporation, or, in his absence, on the cashier, treasurer, or secretary, or, in the absence of such officers, on any director of such corporation, shall be sufficient. If the action is commenced in the county in which the corporation keeps its chief office, the process may be served on any one of the foregoing officers, in the absence of those named before him. If neither the president, cashier, treasurer, or secretary resides within the state, service on the chief agent of the corporation, residing at the time in the county where the action is brought, shall be sufficient.'

In the absence of any of the officers or directors named in said statute, service was had on Williams as the chief agent of the corporation residing in the county at the time where the action is brought. This statute is construed to apply to foreign corporations as well as to domestic ones. Stonega Coke & Coal Co. v. Southern Steel Co., 1910, 123 Tenn. 428, 131 S.W. 988, 31 L.R.A.,N.S., 278, and other cases cited under note 3 in the Code to said section.

The insistence is made in behalf of Tucker, plaintiff in error, that 'if Williams was then, in fact, such a 'chief agent', the defendant in error was properly served and was before the trial court if the defendant in error was 'doing business' in the state.'

It is next urged that the Salt Company was doing business on two theories. The first is that T.C.A. § 20-220 provides as follows:

'Foreign corporations subject to actions.--Any corporation claiming existence under the laws of the United States or any other state, or of any country foreign to the United States, or any business trust found doing business in this state, shall be subject to suit here to the same extent that corporations of this state are by the laws thereof liable to be sued, so far as relates to any transaction had, in whole or in part, within this state, or any cause of action arising here, but not otherwise. Any such corporation or trust having any transaction with persons, or having any transaction concerning any property situated in this state, through any agency whatever, acting for it within the state, shall be held to be doing business here within the meaning of this section.'

It is then stated in the brief that 'it is clear from the stipulated facts that defendant in error was 'doing business' under this test, that the contract between plaintiff in error, a Tennessee resident, and defendant in error for personal services in aid of one of the Company's Shelby County salt brokers (see declaration, R. 3), 'relates to a transaction had, in whole or in part, within this State."

This insistence must be overruled for the reason that the stipulation controls and it fails to show that there was a contract for personal services in aid of one of the Company's Shelby County salt brokers. Therefore, we cannot determine whether or not this alleged contract relates to any transaction had in whole or in part within this State.

Again, it is insisted that the Salt Company was doing business in Tennessee so as to subject it to service of process, as attempted, because it is alleged that the stipulation shows other activities beyond the mere solicitation of others in interestate commerce.

Counsel relies upon the following cases to sustain his argument on the facts: Life Insurance...