June 15, 1936.
Before SHIPP, J., Hampton, January, 1935. Affirmed.
Actions by Wiggins Sons, Inc., against the Ford Motor Company. Decree for defendant, and plaintiff appeals.
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. Wigging.
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., 1914-D, 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., 1918-C, 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; 14 A.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 Pennsylvania.
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. III.); 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 Okla. 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. (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., 1917-E, 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 Carolina. The opinion of Judge Watkins in the Phillips case holds that the Buick Motor Company is not doing business in South Carolina.
The facts in these three cases are practically identical with the facts in the cases at bar. It will also be noted that recent decisions from the Supreme Court of Georgia in the Burkhalter case and the Supreme Court of Alabama in the Hall case held that the Ford Motor Company, which operates in a similar fashion in those two states, is not doing business therein.
The only decision to the contrary cited before me is the decision of the District Court of Maryland in the case of La Porte Heinekamp Motor Co. v. Ford Motor Co., 24 F.2d 861, in which the District Court in that state held that the Ford Motor Company was doing business in Maryland.
An examination of the facts in that case, however, show that the Ford representatives in that state were systematically and regularly collecting money for the Ford Motor Company and maintained a constant and intimate supervision of the business of the dealers, facts which are not present in the case at bar. That decision was reviewed by Judge Cochran in the DuPre case and distinguished from the activities of the Ford Motor Company in South Carolina.
Furthermore, there are recent and quite pertinent decisions of the Supreme Court of the United States which are controlling upon this question and with which the decision of the Maryland District Court conflicts. In Bank of America v. Whitney Cent. National Bank, 261 U.S. 171, 43 S. Ct., 311, 67 L.Ed., 594, the Court held that the fact that the defendant bank, domiciled in New Orleans, maintained the relationship of principal and agent with six New York banks which regularly performed various acts in New York on behalf of the defendant, including receiving and delivering in New York securities belonging to the defendant, paying various persons in New York for such securities, making other payments on behalf of and at the direction of the defendant, receiving money in New York on behalf of the defendant and other similar acts, did not constitute doing business in New York by the defendant so as to enable the Court to acquire jurisdiction over the defendant by serving process on its president while temporarily there. The Court held that jurisdiction taken of foreign corporations does not rest upon a fiction of constructive presence, but must flow from the fact that the corporation itself does business in the state in question in such a manner and to such an extent that its actual presence there at the time of service of process is established.
In Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct., 250, 69 L.Ed., 634, the Supreme Court entirely negatives the proposition upon which the decision in the La Porte case was largely based; i. e., that close supervision by a foreign corporation of its dealers within another state constitutes doing business within the latter. In this case the Court held that the fact that an Alabama corporation, a subsidiary of the defendant, a Maine corporation, was domesticated and engaged in business in North Carolina, that the parent corporation owned all of the stock of the subsidiary and completely controlled and dominated it, both commercially and financially, in substantially the same manner that the parent corporation controlled its various branches in other states, which were not separately incorporated, did not constitute doing business in North Carolina on the part of the parent corporation, and that service of process on the subsidiary could not bring the parent into the Courts of that state.
The fact that the cause of action arose in South Carolina is not material to the question of doing business. Rosenberg Bros. Co. v. Curtis Brown Co. (D.C.), 285 F., 879; Id., 260 U.S. 516, 43 S.Ct., 170, 67 L.Ed., 372.
Two recent South Carolina cases apply in general the propositions of law as outlined herein. State v. W.T. Rawleigh Co., 172 S.C. 415, 174 S.E., 385; Dyar v. Ga. Power Co., 173 S.C. 527, 176 S.E., 711. The activities of the Rawleigh Company are very similar to the activities in this State of the Ford Motor Company. It seems to this Court that the decision of the South Carolina Supreme Court affirming the circuit decree that the Rawleigh Company was not doing business in this State is practically conclusive on the issues before the Court. Taking that decision along with the opinion of Mr. Justice Bonham in the Dyar case and the other authorities cited herein, and applying them to the facts in this case, I have reached the conclusion that the Ford Motor Company is not doing business in South Carolina in such a manner and to such an extent as to warrant the inference that it is present here. I have therefore reached the conclusion that this Court has no jurisdiction of the Ford Motor Company.
This conclusion renders unnecessary a decision on the question of whether Edward Livesey was such an agent of the company on whom process could be properly made. Our statute as to service on agents is very broad. Under the authorities, however, the decisions of the United States Supreme Court as to the definition of an agent on whom process could be served would seem to be controlling. State v. W.T. Rawleigh Co., supra; Dyar v. Ga. Power Co., supra.
In Jenkins v. Bridge Co., 73 S.C. 526, 528, 53 S.E., 991, 992, which is cited with approval by the Circuit Court in the Rawleigh case, it is held that authority of an agent to contract is sufficient to constitute agency under the South Carolina statute, but that a claim of agency based on any authority short of power to contract has been rarely maintained.
It will be seen from the facts in these cases that Edward Livesey had no authority to contract in behalf of the Ford Motor Company. As a matter of fact, he had no authority to even write letters to the dealers, or receive money, not being a bonded employee. It therefore appears that, even if the Ford Motor Company were doing business in the State, which it was not, Edward Livesey is not such an agent as could be served within the interpretation of our statute. State v. W.T. Rawleigh Co., supra; Dyar v. Georgia Power Co., supra; Phillips v. Buick Motor Co., supra.
It is therefore ordered and adjudged that service of process in the two above-entitled cases be, and hereby is, set aside and the special appearance sustained.
Messrs. George Warren and Thos. M. Boulware, for appellant, cite: Service of process: Sec. 434, Code 1932; 246 U.S. 78; 62 L.Ed., 587; 227 U.S. 218; 57 L.Ed., 218; 172 U.S. 602; 43 L.Ed., 569; 156 U.S. 518; 13 F., 358; 18 How., 404; 15 L.Ed., 451; 172 U.S. 602. Doing business: 24 F.2d 861; 227 U.S. 218; 125 S.E., 171; 233 N.Y., 216; 135 N.E., 268; 21 F.2d 152; 3 F.2d 469; 246 U.S. 79; 62 L.Ed., 587; Ann. Cas., 1918-C, 537; 243 U.S. 264; 61 L.Ed., 710; 205 U.S. 530; 51 L.Ed., 916; 228 F., 209; 172 U.S. 602; 43 L.Ed., 569; 262 U.S. 312; 67 L.Ed., 996; 16 F.2d 122. Messrs. Cansler Cansler and Robinson Robinson, for respondent, cite: As to findings of Circuit Judge subject to review: 123 S.C. 515; 116 S.E., 101; 30 A.L.R., 248; 172 S.C. 415; 174 S.E., 385; 124 S.C. 346; 117 S.E., 594; 30 A.L.R., 168; 145 S.C. 530; 143 S.E., 269; 168 S.C. 516; 167 S.E., 833. Conditional sales agreement: 112 S.C. 243; 99 S.E., 836; 130 S.C. 521; 126 S.E., 649. As to federal authorities controlling where foreign corporation concerned: 247 U.S. 21; 62 L.Ed., 963; 251 U.S. 373; 64 L.Ed., 632; 293 S.W. 760; 52 A.L.R., 723; 192 N.C. 155; 133 S.E., 424; 14 C.J., 1372; 93 S.C. 103; 76 S.E., 117; 123 S.C. 515; 172 S.C. 415; 174 S.E., 385. Doing business: 246 U.S. 78; 62 L.Ed., 590; 29 F.2d 164; 2 L.R.A. (N.S.), 127; 9 L.R.A. (N.S.), 1214; 196 U.S. 432; 49 L.Ed., 540; 42 F.2d 712; 104 S.W. 1139; 185 F., 173; 127 F., 1008; 125 S.E., 171; 150 S.E., 701; 3 F.2d 469; 135 N.E., 268; 21 F.2d 152; 276 P., 274; 176 F., 1010; 57 F.2d 867; 177 P., 583; 116 S.E., 333; 189 S.W. 444; 147 So., 603. Agency: 73 S.C. 528; 52 S.E., 991; 174 S.E., 391; 33 N.W., 653; 17 A., 1079; 40 N.E., 527; 92 N.C. 590; 172 U.S. 602; 43 L.Ed., 569; 158 F., 697; 21 R.C.L., 1351.
June 15, 1936. The opinion of the Court was delivered by
This action and another, based on an alleged breach of contract, were commenced by the service of the summons and complaint on one Edward Livesey, a traveling representative of the Ford Motor Company. The defendant, upon due notice, made special appearance in both cases for the purpose of moving the Court to set aside the service on two grounds: (1) That the company was not doing business in South Carolina; and (2) that the person served was not the agent or representative of the defendant. The matter was heard by his Honor, Judge Shipp, on certain documentary evidence and the testimony of several witnesses taken before him; and in a full and well-considered decree, filed March 29, 1935, the Court sustained the motion on both grounds, and ordered that the service of process in the cases be set aside. From the order made this appeal is taken.
We have repeatedly held that findings in a law case are not subject to review by this Court, unless absolutely unsupported by evidence. In Lipe v. Railway Company, 123 S.C. 515, 116 S.E., 101, 30 A.L.R., 248, it was said: "A conclusion as to either of the points indicated (similar to the questions presented here), necessarily involves the determination of a question of mixed law and fact, but the result of such determination by the Circuit Judge is essentially a finding of fact which this Court has no power to review, unless wholly unsupported by evidence or manifestly influenced or controlled by error of law." See, also, McSwain v. Grain Provision Co., 93 S.C. 103, 76 S.E., 117, Ann. Cas., 1914-D, 981; State ex rel. Kerns v. Life Insurance Co., 168 S.C. 516, 167 S.E., 833; State of South Carolina v. W.T. Rawleigh Co., 172 S.C. 415, 174 S.E., 385; Dyar v. Georgia Power Co., 173 S.C. 527, 176 S.E., 711.
We have examined with care the record before us; and we cannot say that the findings of Judge Shipp are entirely without evidence to support them or that they are attributable, as contended by the appellant, to an erroneous conception or application of the law. On the contrary, his conclusions find ample support in the testimony, and we approve the result reached.
The Circuit decree, therefore, which will be reported, is affirmed.
MESSRS. JUSTICES CARTER, BONHAM, BAKER and FISHBURNE concur.