Opinion
Page __
__ Cal.App.2d __ 338 P.2d 596 Harold L. COSPER, Plaintiff and Appellant, v. SMITH & WESSON ARMS CO., a corporation, et al., Defendants. Smith & Wesson, Inc., Respondent. Civ. 5677. California Court of Appeals, Fourth District May 6, 1959Hearing Granted July 1, 1959.
[338 P.2d 597] Morris B. Chain and Milton M. Younger, Bakersfield, for appellant.
Borton, Petrini, Conron & Brown, Bakersfield, for respondent.
MUSSELL, Justice.
This is an action for personal injuries alleged to have been sustained by plaintiff when the cylinder of a revolver, purchased by him from defendant F. Morton Pitt and manufactured by Smith & Wesson, Inc., a Massachusetts corporation, 'exploded and blew apart', causing the permanent loss of vision in plaintiff's right eye.
Service of summons and complaint on Smith & Wesson, Inc., was attempted to be made by serving Walter K. Lookabaugh as the alleged agent, sales manager and manufacturer's representative for Smith & Wesson Arms Company in California. Special appearance on motion to quash service was made by Smith & Wesson, Inc., supported by the affidavit of Carl L. Hellstrom, president of said company. The motion was heard on this affidavit and on counter affidavits filed by plaintiff. The trial court granted the motion to quash service of summons and plaintiff appeals from the order granting it, claiming that Smith & Wesson, Inc., was 'doing business' in the state of California and that proper service upon Smith & Wesson, Inc., was effected by service upon Walter K. Lookabaugh. These issues were tried on affidavits and involved issued of fact.
In Griffith Co. v. San Diego College for Women, 45 Cal.2d 501, 507, 508, 289 P.2d 476, 479, 47 A.L.R.2d 1349, the court said:
"An appellate court will not disturb the implied findings of fact made by a trial court in support of an order, any more than it will interfere with express findings upon which a final judgment is predicated. When the evidence is conflicting, it will be presumed that the court found every fact necessary to support its order that the evidence would justify. So far as it has passed on the weight of evidence or the credibility of witnesses, its implied findings are conclusive. This rule is equally applicable whether the evidence is oral or documentary."
In Fuller v. Lindenbaum, 29 Cal.App.2d 227, 230, 84 P.2d 155, 157, on an appeal from an order granting a motion to quash service of summons, the court said:
'Furthermore, in the consideration of an appeal from an order made upon affidavits involving the decision of a question of fact, an appellate court is bound by the same rule that controls it where oral testimony is presented for review. If there is any conflict in the affidavits, those in favor of the prevailing party must be taken as true, and the facts stated therein must be considered established. (Citations.)'
In Murray v. Superior Court, 44 Cal.2d 611, 619, 284 P.2d 1, it is said that an appellate court will not disturb the implied findings of fact made by a trial court in support of an order, any more than it will interfere with express findings upon which a final judgment is predicated; that when the evidence is conflicting, it will be presumed that the court found every fact necessary to support its order that the evidence would justify; that so far as it has passed on the weight of the evidence, its implied findings are conclusive; and that this rule is equally applicable whether the evidence is oral or documentary.
[338 P.2d 598] The affidavit of Carl R. Hellstrom, president of Smith & Wesson, Inc., filed in support of the motion to quash, is as follows:
'I, Carl R. Hellstrom, President of Smith & Wesson, Inc. on oath depose and say:
'That Smith & Wesson, Inc. is a Massachusetts Corporation with its offices and manufacturing facilities in Springfield, Massachusetts.
'That Smith & Wesson, Inc. is not qualified to do business in California, and has not filed an application to do business in California, and has not requested the Secretary of State, or other lawful authority, to do business in California.
'That Smith & Wesson, Inc. has no agents, salesmen, or other employees residing in California, nor any resident representative authorized to adjust any claims or complaints against Smith & Wesson, Inc in California.
'That Smith & Wesson, Inc. has never had, nor does it now have offices in California, nor has it held any sales conventions in California.
'That Smith & Wesson, Inc. has no property, inventory or assets in California.
'That Smith & Wesson, Inc. does not solicit retail business, but distributes its products F.O.B. Springfield through regular wholesale and dealer channels. Sales promotions are principally conducted by long established firms known as manufacturer's representatives, which on their own time and expense solicit business in several allied lines against an over-riding discount, or commission, on business initiated by them.
'That the Walter Lookabaugh Co. of California and its predecessor, the Paul S. Linforth Co., have been known to us as general manufacturer's representatives specializing in the sporting goods field.
'That Smith & Wesson, Inc. has never had, nor does it now have, any contract or agreement with them except that they were, in common with their other lines, to promote on a non-exclusive basis the sale of our products on the west coast against a straight commission of 5%.
'That Smith & Wesson, Inc. does not now have, nor has it ever had, any financial interest in the Lookabaugh Co. or its predecessors, and that Smith & Wesson, Inc. does not have any control or jurisdiction of the Walter Lookabaugh Co. or its employees.
'That the Walter Lookabaugh Co. buys its own samples and that no help or assistance is given them by Smith & Wesson, Inc., except such advertising material as is furnished by Smith & Wesson, Inc. to the general jobbing trade throughout the world.
'/s/ Carl R. Hellstrom
'Then appeared personally, Carl R. Hellstrom, President of Smith & Wesson, Inc., and swore that the above recited facts are true and correct to the best of his knowledge and belief.
'/s/ Vera G. Rockstroh'
In opposition to the motion appellant filed the affidavit of counsel for appellant in which he stated that on May 7, 1957, he took the deposition of Walter K. Lookabaugh in which Lookabaugh made certain statements relative to his business transactions with Smith & Wesson, Inc. This deposition was not signed or filed with the trial court and the court ruled that it was not admissible. Moreover, the statements in the affidavit of counsel alleged to have been made by Lookabaugh are clearly hearsay and of no probative value. Other statements of counsel in his affidavit are made on information and belief.
In the affidavit of Lynn A. White, deputy chief of police in Los Angeles, filed in opposition to the motion, affiant states that in 1956 he wrote to Smith & Wesson, Inc., asking that a representative of the company be sent to call upon them to discuss alleged structural weaknesses of Smith & [338 P.2d 599] Wesson firearms and that Lookabaugh called upon him and stated that he was a representative of the company and had come to discuss complaints.
Depositions of Hannah A. Giegerich, Frank W. Symonds and Harold O. Austin were offered by appellant. Objection to these depositions and motions to suppress them were made by Smith & Wesson, Inc., and the trial court ruled that they were not admissible as depositions since they were taken without notice. However, the court evidently considered them as affidavits. These alleged depositions or affidavits are not made a part of the record before us and while they might result in a conflict in the evidence, the facts stated in the affidavit of Carl Hellstrom, president of Smith & Wesson, Inc., substantially support the trial court's conclusions that
'1) Walter Lookabaugh is not (a) an officer of defendant Smith and Wesson, Inc., nor (b) 'the general manager in this state' of said defendant, nor (c) the designated agent of said defendant for service of process in California;
'2) That defendant Smith and Wesson, Inc., is not doing business in California in the sense required to make it amenable to process there.'
In Gordon Armstrong Co. v. Superior Court, 160 Cal.App.2d 211, 217, 325 P.2d 21, 24, the court, in discussing the concept of 'doing business' which will subject a foreign corporation to local process, quoted the following from Jeter v. Austin Trailer Equipment Co., 122 Cal.App.2d 376, 388, 265 P.2d 130:
"By way of recapitulation of the current state of the law under the evolving concept of the 'doing business' requirement, it is deducible from the cases that the essentials of due process are fully met, at least for the purposes of amenability to local process and jurisdiction, if a foreign corporation maintains substantial contacts with a state through a course of regularly-established and systematic business activity, as distinguished from casual, isolated, or insubstantial contacts or transactions. The court must be astute to weigh the facts of the individual case to determine whether the particular type of activity in, relation to, or nexus with, the forum is of such substance as will make it just and equitable to conclude that a corporation is 'doing business' in the sence required by the purpose at hand."
In West Publishing Co. v. Superior Court, 20 Cal.2d 720, 727, 128 P.2d 777, 780, it is said:
"A foreign corporation is amenable to process to enforce a personal liability, in the absence of consent, only if it is doing business within the state in such manner and to such extent as to warrant the inference that it is present there. And even if it is doing business within the state, the process will be valid only if served upon some authorized agent.' The determination of this jurisdictional question 'is often a matter of great difficulty and extreme nicety. No all-embracing rule as to what is doing business has been laid down."
In the instant case the affidavit of the president of Smith & Wesson, Inc., establishes on appeal not only the facts stated therein but all facts which reasonably may be inferred therefrom. It appears from said affidavit that Smith & Wesson, Inc., is a Massachusetts corporation with its offices and manufacturing facilities in Springfield, Massachusetts; that it is not qualified to do business in California; that it has no agents, salesmen, or other employees residing in California, nor any resident representative authorized to adjust any claims or complaints for the company; that it has no offices in California and has no property inventory or assets in California; that it does not solicit retail business but distributes its products f. o. b. Springfield through regular and dealer channels; that sales promotions are principally conducted by firms known as manufacturers' representatives, which on their [338 P.2d 600] own time and at their own expense solicit business in several allied lines against an overriding discount or commission on business initiated by them; that the company has never had a contract or agreement with the Lookabaugh Company, except that they were, in common with other lines, to promote on a nonexclusive basis the sale of Smith & Wesson products on the west coast against a straight commission of five percent; that Lookabaugh Company buys its own samples and that no help or assistance is given them by Smith & Wesson except such advertising material as is furnished by Smith & Wesson to the general jobbing trade throughout the world.
Accepting the foregoing facts stated in said affidavit as true, and the facts which reasonably may be inferred therefrom, we can not say as a matter of law that Smith & Wesson, Inc., was 'doing business' in California under the rules announced in the foregoing decisions.
As is said in Jeter v. Austin Trailer Equipment Co., supra, 122 Cal.App.2d 376, 381, 265 P.2d 130, 134: 'Whether a corporation is doing business in a state in the sense required by a process statute is peculiarly dependent upon the facts of the particular case.' And in Confidential, Inc. v. Superior Court, 157 Cal.App.2d 75, 79, 320 P.2d 546, 549, it was held that 'The burden rests upon a plaintiff who has served process upon a foreign corporation to establish that it was doing business in the state at the time of service, or had other sufficient contacts with its people or affairs to warrant the inference that it had subjected itself to the state's jurisdiction. (Citations.)'
The implied finding of the trial court that plaintiff failed to establish that Smith & Wesson, Inc., was doing business in the state of California is supported by the record before us. The purported service was not made on the secretary of state as provided for in Corporations Code, section 6501, nor was a preliminary order under said section obtained. Service was attempted under section 6500 of the Corporations Code, which provides for service of process on a foreign corporation by delivery by hand of process to '(a) to the president or other head of the corporation, a vice president, a secretary, an assistant secretary, the general manager in this State, or if the corporation be a bank to a cashier or an assistant cashier, * * *'. (Italics added.) Appellant's contention is that Walter K. Lookabaugh is the general manager of Smith & Wesson, Inc., in this state. The burden of proving that Lookabaugh was the authorized agent or general manager of said corporation in this state was upon plaintiff. In this connection, it appears from the affidavit of Carl H. Hellstrom that Smith & Wesson, Inc., has no agents, salesmen or other employees residing in California and there is no evidence that Lookabaugh was or is the general manager of said corporation. On appeal we are required to accept the statement of Hellstrom as true. Fuller v. Lindenbaum, supra, 29 Cal.App.2d 227, 228, 84 P.2d 155. In West Publishing Co. v. Superior Court, supra, 20 Cal.2d 720, 727, 128 P.2d 777, it is held that even if a foreign corporation is doing business in this state the process will be valid only if served upon some authorized agent. The same rule is recognized in Jeter v. Austin Trailer Equipment Co., supra, where the court said, 22 Cal.App.2d at page 388, 265 P.2d at page 138:
'A foreign corporation may be doing business in a state through the instrumentality of independent contractors located therein, yet those persons through whom its local business is conducted may not be so bound to the foreign corporation as to make them agents capable of receiving process on behalf of the corporation. (Citations.)'
In Smith and Wesson, Inc. v. Municipal Court, 136 Cal.App.2d 673, 289 P.2d 26, an attempt was made to support the agency of Lookabaugh by the statements of Lookabaugh to an investigator that he was a sales representative of the corporation and has an office in San Francisco. It was there held that the statements of Lookabaugh were not admissible to prove that he [338 P.2d 601] was an agent of the company. It was further held that the facts adduced at the hearing of the motion to quash service of summons and complaint were not sufficient to make Smith & Wesson, Inc., amenable to process of the courts of this state.
Appellant relies heavily on Gray v. Montgomery Ward, Inc., 155 Cal.App.2d 55, 317 P.2d 114, also decided by this court. In that case defendant Duro-Metal Products Company filed a special appearance and motion to set aside service of summons and complaint on the ground that the corporation was not doing business in California. The matter was heard on affidavits and the affidavit of E. Bellezzo, the manufacturer's agent handling Duro-Metal products in California, showed that he was the manufacturer's agent in California; that he called upon dealers and prospective dealers in California and new dealers were appointed upon his recommendation; that he checked proposed dealers' credit, type of distribution and type of salesmen employed. He testified that once a dealer for Duro was appointed he called upon him urging him to stock with and promote sales of Duro-Metal products; that he occasionally delivered catalogues and brochures furnished by Duro-Metal products to dealers and was under the supervision of a sales manager who maintained an office in Illinois; that he received a commission on orders delivered to him personally and on others mailed directly to the company. Under the circumstances, it was held that Duro-Metal was doing business through him. The factual situation in that case differs materially from that in the case before us and the opinion is not inconsistent with what we have heretofore said herein.
The record shows that on July 14, 1958, appellant filed an application herein to produce additional evidence, including the deposition of Walter K. Lookabaugh. The application was denied by order of this court on August 27, 1958. Appellant, at the oral argument on appeal herein, made a motion that we reconsider the previous ruling on the application. The deposition of Walter K. Lookabaugh was lodged with the court and, while it was not received as additional evidence, we have read and considered it. The motion to reconsider is denied.
The order granting the motion to quash summons and complaint is affirmed.
GRIFFIN, P. J., and SHEPARD, J., concur.