Williams v. Bruce's Juices
| Decision Date | 09 December 1940 |
| Citation | 35 F. Supp. 847 |
| Parties | WILLIAMS v. BRUCE'S JUICES, Inc. |
| Court | U.S. District Court — Western District of Kentucky |
Nat Ryan Hughes, of Murray, Ky., and Roy M. Shelbourne (of Wheeler & Shelbourne), of Paducah, Ky., for plaintiff.
McMurry & Reed, of Paducah, Ky., for defendant.
The defendant's motion to quash the return upon the summons raises two questions: (1) Whether or not the defendant corporation Bruce's Juices was doing business in Kentucky, and (2) whether or not S. A. Hart, the employee upon whom service was made, was an agent of the defendant corporation for the service of process as provided by Rule 4(d) (3) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, or by Section 51, Subsection 3 of the Civil Code of Practice of Kentucky.
The defendant is a corporation organized under the laws of Florida with its principal office at Tampa. It is engaged in the business of selling canned goods through brokers and distributors for consumption by the general public. It has never maintained an office in Kentucky. It owns no property in Kentucky nor does it have any agent or officer resident or permanently in the State. Following an inquiry received from the plaintiff the defendant corporation sent its representative S. A. Hart to Murray, Ky., to discuss and arrange for the allocation of certain counties in Kentucky to Williams as its distributor. An arrangement was finally entered into between the plaintiff and the defendant under which the plaintiff began to act as distributor for the defendant in certain counties in Kentucky. In this action plaintiff claims that the defendant has breached its contractual obligations arising out of that arrangement.
Defendant contends that its representative S. A. Hart who negotiated with the plaintiff Robert J. Williams at Murray, Calloway County, Kentucky, was merely a salesman with authority to solicit business in Kentucky, whose acts were subject to confirmation by the home office of the corporation in Tampa, Florida, and that he had no authority to enter into any binding arrangement in Kentucky with the plaintiff Williams. It is also claimed that the proposed arrangement negotiated by Hart with the plaintiff was not effective until submitted to the home office and approved by it.
The plaintiff contends that Hart had more authority than a soliciting agent and actually negotiated and closed the contract in Kentucky under which the plaintiff began to operate.
Both plaintiff and defendant substantially agree on the principles of law applicable to this motion. It appears to be well settled that the mere solicitation of business by the agent of a foreign corporation does not constitute the doing of business in such a way as to manifest the presence of the corporation in the State and to justify its enforced appearance in the courts of that State by summons. Peterson v. Chicago, R. L. & P. R. R., 205 U.S. 364, 27 S.Ct. 513, 51 L.Ed. 841; Green v. Chicago, B. & Q. R. R., 205 U.S. 530, 27 S.Ct. 595, 51 L.Ed. 916; Philadelphia & R. Ry. v. McKibbin, 243 U.S. 264, 37 S.Ct. 280, 61 L.Ed. 710; Ballard & Ballard Co. v. Munson S. S. Line, 6 Cir., 25 F.2d 252; Tennessee Publishing Co. v. C. L. Walker & Co., 205 Ky. 420, 265 S.W. 941. However, it is also well settled that although the business transacted by a corporation may be entirely interstate in its character yet where the agent of a foreign corporation does more than engage in a mere solicitation and there is a continuous course of shipments of articles into the State, such acts manifest its presence within the State and make it subject to the jurisdiction of the courts of that State. International Harvester Co. v. Kentucky, 147 Ky. 655, 145 S.W. 393, affirmed, 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479; St. Louis S. W. R. Co. v. Alexander, 227 U.S. 218, 33 S.Ct. 245, 57 L.Ed. 486, Ann. Cas.1915B, 77; Makeever v. Georgia S. & F. Ry. Co., 219 Ky. 699, 294 S.W. 144.
In the opinion of the court the evidence in this case shows that the defendant's representative S. A. Hart had more authority than merely that of a traveling salesman soliciting orders, and that he actually negotiated and concluded the arrangements between the plaintiff and the defendant company while in Murray, Kentucky. He was not sent to Murray for the purpose of soliciting orders, but was sent for the express purpose of negotiating the business deal with the plaintiff, which he negotiated and closed after several conferences over a period of time. His action was not subject to approval by...
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