Winfield v. United Fruit Co.
Winfield v. United Fruit Co.
Opinion of the Court
Defendant, a New Jersey corporation, operates a fleet of three, and sometimes more, steamships between the port of San Francisco and certain points in Central and South America. The vessels touch at Los Angeles on their north-bound trips. Appellant was hired by respondent at San Francisco as a storekeeper aboard the S. S. “Chiriqui” for her voyage from San Francisco to Port Armuelles, Panama, and return to San Francisco. While at sea off the Central American coast, plaintiff suffered an injury for which he brought this action in the municipal court, under the so-called Jones Act, being section 33 of the United States Merchant Marine Act of 1920 (46 U. S. C. A., sec. 688), claiming $2,000 damages. Summons was served in San Francisco upon defendant’s manager, and defendant appeared specially and moved to quash the service upon the ground that it was a New Jersey corporation; that the cause of action sued upon did not arise in California or relate to business or transactions within this state, and that the court had no jurisdiction of the subject matter or of the person of the defendant. The motion was heard upon affidavits and oral testimony touching the operations and business of defendant in California and was granted. Defendant has never done any of the things required by law to qualify it to transact business within this state.
Defendant maintains at least one commercial bank account in San Francisco, wherein the proceeds of the sale of bananas and other merchandise are deposited. Out of this account the seamen are paid in cash, and the account is subject to checks drawn by defendant’s accountant at San Francisco under the direction of its manager. Claims for damaged cargo are adjusted at the San Francisco office, and money collected for prepaid freight on outgoing shipments is deposited in the local bank account, as are also the proceeds of passenger tickets. Advertisements are carried by defendant in shipping journals published in San Francisco. The manager reports on other than routine matters to the company’s New York office; but the San Francisco office is called by the defendant its division office.
Appellant’s right under the Jones Act to sue in a state court where valid service of summons can be° effected was settled in 1932 by the decision in Bainbridge v. Merchants etc. Co., 87 U. S. 278 [53 Sup. Ct. 159, 77 L. Ed. 302, 1933 A. M. C. 32]; and the trial judge so held, in reliance on Mitchell v. Pacific Steamship Co., decided by this department in 1930.
We are satisfied from the facts of record, summarized above, that defendant at the time summons was served was doing business within this state; that the person upon whom service was made was its manager, within the meaning of section 411 of the Code of Civil Procedure (Milbank v. Standard Motor Construction Co., 132 Cal. App. 67 [22 Pac. (2d) 271], and cases cited); that consequently—passing for the moment the question of interstate commerce—there was a valid service. The record surely shows that defendant ever since 1927 has been transacting “within the state some substantial part of its ordinary business by its officers or agents appointed and selected for that purpose”. (Davenport v. Superior Court, 183 Cal. 506, 508 [191 Pac. 911].) Defendant earnestly contends, however, that this business is purely interstate and foreign in character, and not at all intrastate, and that to compel it to litigate in a state court is to unduly burden interstate commerce. It is further contended that a foreign corporation, even if it is present in a state (because doing an interstate and foreign business therein) may not, unless it has consented, be sued on transitory causes of action arising elsewhere, but which are unconnected with any corporate action by it within the jurisdiction. In support of this contention, defendant relies upon a long line of cases starting with Old Wayne Mutual Life Assn. v. McDonough, 204 U. S. 8 [27 Sup. Ct. 236, 51 L. Ed. 345], decided in 1906, and coming down to Louisville & Nashville R. R. Co. v. Chatters (Southern Ry. Co. v. Chatters), 279 U. S. 320 [49 Sup. Ct. 329, 73 L. Ed. 711], decided in 1929. The Old Wayne case holds that the statutory consent of a foreign corporation to be sued does not extend to causes of action arising in other states. This principle was applied in Simon v. Southern Ry. Co., 236 U. S. 115 [35 Sup. Ct. 255, 59 L. Ed. 492], strongly relied upon by defendant, holding that service under a Louisiana statute was not “effective to give the District Court of (New) Orleans jurisdiction over a defendant as to a cause of action arising in the State of Alabama”. The reason for the rule is thus given by Hr. Justice Lamar at page 130: “Otherwise, claims on contracts wherever made and suits for torts wherever committed might by virtue of such compulsory statute
Panstwowe Zaklady Graviozne v. Automobile Ins. Co. of Hartford and Baltimore & Ohio R. R. Co., 36 Fed. (2d) 504, was commenced in the state court and thence removed. It was an action against a railroad company engaged in interstate commerce for loss on the high seas of merchandise shipped under an Illinois bill of lading to Baltimore, and thence transshipped to a European port. “So far as appears,” says the court, “the transaction was in no way connected with this state [New York], or with any agency of the defendant located here.” A motion to dismiss, as against the railroad company, for lack of jurisdiction was granted on the ground of the burden upon interstate commerce and on the authority of the Old Wayne, Simon and Davis cases and Atchison, Topeka & Santa Fe Ry. Co. v. Wells, supra. In addition to the cases just discussed, the defendant relies upon Mitchell Furniture Co. v. Selden Breck Construction Co., 257 U. S. 213 [42 Sup. Ct. 84, 66 L. Ed. 201], a suit brought in Ohio by an Ohio corporation against a Missouri corporation upon a contract made in Illinois to be performed in Michigan. The basis for the decision was that the defendant was not doing business in Ohio, and the contract sued on was neither made, nor was it to be performed, there.
It will readily be seen that in these cases cited by defendant “Where jurisdiction has been denied, the cause of action not only arose outside the state, but it was not shown to have arisen out of any business conducted by the corporation within it, or to have had any relation to any corporate act there.” (Chatters Case, 279 U. S. 320, 328 [49 Sup. Ct. 329, 331, 73 L. Ed. 711].) In the instant case we assume for the purpose of the decision that defendant’s business in California is exclusively interstate and foreign
In the Davis case (Davis v. Farmers’ Co-operative Equity Co., supra), Mr. Justice Brandéis (at page 315) amplifies the reasons underlying the interstate commerce rule as given by Mr. Justice Lamar, as follows: ‘1 That the claims against interstate carriers for personal injuries and for loss and damage of freight are numerous; that the amounts demanded are large; that in many cases carriers deem it imperative, or advisable, to leave the determination of their liability to the courts; that litigation in states and jurisdictions remote from that in which the cause of action arose entails absence of employees from their customary occupations; and that this impairs efficiency in operation, and causes, directly and indirectly, heavy expense to the carriers; these are mat
In the Davis case, as has been noted, “the transaction was in no way connected with Minnesota or with the soliciting agency there”, but the author of the opinion was careful to remark, “It may be that a statute like that here assailed would be valid although applied to suits in which the cause of action arose elsewhere, if the transaction out of which it arose had been entered upon within the state” (footnote citation to the Harvester Company case and to “Jurisdiction over nonresidents doing business within a state” by Austin W. Scott, 32 Harvard Law Review, 871, 887), and further: “These questions are not before us, and we' express no opinion upon them.” The questions thus left open—and, to some extent, anticipated—in the Davis ease, were squarely presented in the Chatters Case, supra, where the plaintiff Chatters, a citizen of Louisiana, bought a through ticket at the office of the Louisville and Nashville Company in New Orleans for a journey to Washington, D. C., on which trip he was injured in Virginia. The Louisville and Nashville Company was a Kentucky corporation, the Southern Railway, a Virginia corporation. The action was brought in the federal court in Louisiana, process was served upon the Southern’s designated agent in Louisiana (as in the Simon case) and the Southern Company appeared specially and excepted to the jurisdiction upon the ground that the cause of action, which was transitory, arose outside Louisiana, and not out of any business done by the Southern within Louisiana. The ticket was in three parts, (1) over the Louisville and Nashville road from New Orleans to Montgomery, Alabama, (2) over the Atlanta & West Point road from Montgomery to Atlanta, Georgia, and (3) over the Southern road from Atlanta to Washington. Bach of the three roads controlled the
It is self-evident under the facts that San Francisco is the natural and logical place for the trial of this case; and, therefore, that the case is not "within the spirit or reason of the rule against the burdening of interstate commerce. It is equally self-evident that in this case the fact that plaintiff was employed at San Francisco for the voyage upon which he was injured brings the case within the rule of the Chatters case. The making of the contract of employment in California brings the appellant’s injury— suffered upon the high seas—into relation with defendant’s business in this state, just as the purchase by Chatters of his ticket in Louisiana connected his injury with the business of the Southern Railway in the state of suit. Moreover, there are many factors present here which were entirely absent from the cases upon which defendant relies. Unlike the Simon, Davis and Fry cases, Atchison, Topeka & Santa Fe Ry. Co. v. Wells, supra, and Michigan Central R. Co. v. Mix, supra (where the rails of the interstate carriers
Other cases than those herein cited have been presented by both sides, but it is not necessary to discuss them. We are satisfied for the reasons and upon the authority already given that the municipal court has jurisdiction of the subject matter, and of the person of defendant, and that the exercise or assertion of that jurisdiction does not unduly or unreasonably burden interstate commerce.
The judgment appealed from, together with the order quashing service of summons, is reversed, and the' cause remanded to the municipal court for further proceedings looking to a trial on the merits.
Johnson, P. J., and Conlan, J., concurred.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.