Wiggins & Sons, Inc. v. Ford Motor Co.

• Decision Date: 15 June 1936
• Docket Number: 14315.
• Parties: WIGGINS & SONS, Inc., v. FORD MOTOR CO.
• Court: South Carolina Supreme Court

186 S.E. 272

181 S.C. 171

WIGGINS & SONS, Inc., v. FORD MOTOR CO.

No. 14315.

Supreme Court of South Carolina

June 15, 1936

Appeal from Common Pleas Circuit Court of Hampton County; S.W. G Shipp, Judge.

Actions by Wiggins & Sons, Inc., against the Ford Motor Company. Decree for defendant, and plaintiff appeals.

Affirmed.

The decree of Judge Shipp is as follows:

These two actions were instituted in the court of common pleas for Hampton county on the 27th day of April, 1932, by handing copies of the summons and complaint to Edward Livesey, a commercial traveler for the Ford Motor Company.

The defendant filed a special appearance in both cases and moved to set aside the process upon two grounds: (1) That Edward Livesey was not an agent of the defendant on whom service of process could properly be made; and (2) that the Ford Motor Company, a Delaware corporation, was not subject to process in the state of South Carolina because it was not doing business here.

When the motions were called up before the Hon. J Henry Johnson, resident judge of the Fourteenth judicial circuit, in September, 1932, he passed an order holding that the special appearance should be heard upon the testimony actually taken before the presiding judge of the Fourteenth circuit at an ensuing term. The matter was marked heard by me when I was assigned to that circuit, and, with the consent of both parties, the testimony was taken before me on October 20, 1933, bearing upon the issues presented by the special appearances. Because of the illness of counsel, it was not argued before me until recently.

In determining the issues before me, it is my opinion that they should be considered in reverse order, because, if the Ford Motor Company is not doing business in the state of South Carolina in a jurisdictional sense, it becomes unnecessary to determine whether Mr. Livesey was a proper agent on whom process may be served.

The testimony before me shows, and I so find, that the Ford Motor Company is a Delaware corporation, with its principal place of business at Dearborn, Mich. At the time of service of process in this case, it maintained a branch at Charlotte, N C., from which point road or zone men traveled into the state of South Carolina. The Ford Motor Company has a standard sales agreement with its dealers. The copy of the agreement offered in evidence shows that it is made at Dearborn, Mich contains a provision that it is a Michigan agreement, and shall be construed under the laws of that state. This contract is an agreement to buy and sell Ford automobiles, trucks, and other products of the Ford Motor Company. It is not a contract which constitutes the dealer an agent of the Ford Motor Company.

Under the terms of the contract and under the evidence before me, the Ford products are sold to the dealers f. o. b. Dearborn, Mich., payable in cash or by paying sight draft attached to the bill of lading (sales agreement, par. 2). The agreement provides for termination by either party upon written notice given by registered mail or by personal delivery. In actual practice the dealer procures his cars in one of two ways: He either goes to Charlotte himself, purchases the car there by paying cash, or he has the car shipped to him at Estill, S. C., order notify bill of lading; that is, the Ford Motor Company consigns the car to itself, takes a negotiable bill of lading, indorses the same, attaches it to a sight draft, sends all of the papers to a local bank, the bank collects the draft, delivers the bill of lading to the dealer, the dealer obtains his car from the carrier.

The duties of the zone men, which the testimony shows were carried out by them, are to assist in the development of the dealers' organization, to recommend to the branch manager prospective dealers, and, when the dealers are appointed, to assist in the carrying out of merchandising programs. These zone men check over service and sales departments of the dealer, his prospective cards, encourage dealers in their work, attempt to arouse their enthusiasm and keep them on their toes, to give them the benefit of the knowledge and experience of the zone men in selling. The testimony shows that on occasion these road men delivered lubrication charts, that they would sometimes attend exhibits at county fairs, would sometimes hold meetings of salesmen in various parts of the state to encourage them.

It will be noted that the zone men did not have authority to either appoint the dealers or terminate their contracts; the authority to do these things being vested in the branch manager at Charlotte or in some officer at the Michigan office. The zone men had no authority to write to the dealers. They had no authority to collect money, and the testimony shows that they did not do any collecting. The zone men all lived in Charlotte, none of them living in South Carolina, and in traveling through South Carolina during the week they usually spent only one night at any one place.

There was testimony in the case that at one time these zone men procured frames for lubricating charts made by a bookstore in Charlotte, which they delivered to the various dealers and collected $1.75 each from the dealer, which was turned over to the bookstore, the Ford Motor Company not obtaining any profit therefrom, but there is no testimony indicating that these zone men collected for the benefit of the Ford Motor Company.

The Ford Motor Company, at the time of the alleged service, according to the testimony, owned no property in South Carolina and maintained no office in South Carolina.

The cancellation of the Wiggins contract, which is the gravamen of the two causes of action, was effected by registered mail from the Detroit office, according to the testimony of Mr. Wiggins.

The first question presented is whether under these facts the Ford Motor Company is subject to the jurisdiction of this court.

Counsel for both sides agree that, in determining whether a foreign corporation is doing business within a state to such an extent as to make it amenable to state jurisdiction, the federal authorities are controlling, because of the question of "due process," "equal protection," and "interstate commerce" involved. York Manufacturing Company v. Colley, 247 U.S. 21, 38 S.Ct. 430, 62 L.Ed. 963, 11 A.L.R. 611; McSwain v. Adams Grain & Provision Company, 93 S.C. 103, 76 S.E. 117 (2), Ann.Cas. 1914D, 981; State v. W. T. Rawleigh Co., 172 S.C. 415, 174 S.E. 385.

In determining what constitutes doing business, the courts have laid down no hard and fast rule, but are inclined to judge each case upon its own merits. People's Tobacco Company v. American Tobacco Company, 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587, 590, Ann.Cas.1918C, 537. The courts, however, have uniformly held that the mere solicitation of business in the state is not sufficient to subject a corporation to legal jurisdiction. People's Tobacco Company v. American Tobacco Company, supra; Davega v. Lincoln Furniture Mfg. Company, 29 F. (2d) 164 (2d C.C.A.N.Y.).

They have held that, if it maintains in the state an advertising agent, that is not sufficient to confer jurisdiction. People's Tobacco Co. v. American Tobacco Company, supra; 14A C.J., 1378.

The ownership and protection of property is not sufficient. Territory of New Mexico ex rel. Caledonian Coal Co. v. Baker, 196 U.S. 432, 25 S.Ct. 375, 49 L.Ed. 540.

The incidental adjustment of a claim is not sufficient. S.E. Dist. Co. v. Nordyke & Marmon Co., 159 Ga. 150, 125 S.E. 171; Davega v. Lincoln Furniture Mfg. Company, supra.

The courts have held that the combination of several of these matters is not sufficient. Green v. Chicago, Burlington & Quincy R. R. Co., 205 U.S. 530, 27 S.Ct. 595, 51 L.Ed. 916, 918; Davega v. Lincoln Furniture Mfg. Company, supra; Hilton v. Northwestern Expanded Metal Company (D.C.) 16 F. (2d) 821; Alpha Portland Cement Company v. Massachusetts, 268 U.S. 203, 45 S.Ct. 477, 69 L.Ed. 916, 44 A.L.R 1219.

The United States Supreme Court, in the Green Case, held that, though the railroad company maintained in Philadelphia a district freight and passenger agent, with numerous subordinates working under him who solicited and obtained freight and passengers, and who maintained an office and occasionally sold tickets, was insufficient to constitute doing business in Pennslyvania.

The decided weight of authority with regard to the activities of the automobile manufacturers in states in which no branch offices are maintained is that such activities do not give jurisdiction to the courts of the state. S. B. McMaster Co. v. Chevrolet Motor Co., 3 F. (2d) 469 (D.C.E.D.S.C.); S.E. Distributing Co. v. Nordyke & Marmon Co., supra; Holzer v. Dodge Bros., 233 N.Y. 216, 135 N.E. 268; Zimmers v. Dodge Bros., 21 F. (2d) 152 (D.C.Ill.); State ex rel. Hupp Motor Car Corp. v. Kanzler, 129 Or. 85, 276 P. 273, 274; Fawkes v. Amer. Motor Car Sales Co. (Overland), 176 F. 1010 (C.C.); Peebles v. Chrysler Corp. (D.C.1932) 57 F. (2d) 867; Auto Trading Co. v. Williams (Used Car Co.), 71 Okl. 302, 177 P. 583; DuPre v. Ford Motor Co., (Memoranda Dec., U.S. Dist. Court, E.D.S.C. Dec. 17, 1928); Phillips v. Buick Motor Co. ^[1] (M. S. Opinion U.S. District Court, S.C. West Dist., Dec. 18, 1931); Burkhalter v. Ford Motor Co., 29 Ga.App. 592, 116 S.E. 333; Barnes v. Maxwell Motor Sales Corp., 172 Ky. 409, 189 S.W. 444, Ann.Cas.1917E, 578; Ford Motor Co. v. Hall Auto Co., 226 Ala. 385, 147 So. 603.

Particular attention should be directed to the three cases from the pens of the district judges in South Carolina. In the McMaster Case and the DuPre Case the opinions of the late lamented Judge Ernest F. Cochran held that the Chevrolet Company and the Ford Motor Company, respectively, are not doing business in South...