Western Gas Appliances, Inc. v. Servel, Inc.
Western Gas Appliances, Inc. v. Servel, Inc.
Opinion of the Court
We are here confronted with the question of whether the defendant corporation was doing business in this state so that service of summons upon its regional service manager brought it within the jurisdiction of our courts.
Defendant, a Delaware corporation, has its principal place of business in Indiana, where it manufactures gas and electric home appliances which are distributed nationally through wholesale distributors in the various states. Plaintiff, Western Gas, Inc., was for several years one of such distributors. On June 10, 1951, Servel terminated its contract and gave Zion’s Cooperative Mercantile Institution of Salt Lake City the franchise. As a result of alleged
It is not disputed that Servel maintains no place of business of any kind in Utah, has no office, telephone nor real nor personal property, and has no employee located here. Because of this, plaintiff attempted service of summons on defendant by serving a Mr. Frank Reid, regional service manager for Servel, who was temporarily within the state of Utah staying at a hotel.
The trial court granted defendant’s motion to dismiss for lack of jurisdiction. Plaintiff appeals.
The part of rule 4(e) (4) U.R.C.P. dealing with service of summons on corporations and under which plaintiff claims to have acquired jurisdiction of the defendant is:
“If no * * * officer or agent [of the corporation] can be found in the state, and the defendant * * * does business in this state, then upon the person doing such business * *
There is implicit in the trial court’s order granting the motion to dismiss a finding that defendant was not doing business in Utah although he made no express findings of fact. As this court stated in Mower v. McCarthy :
“In reviewing a case * * * where issues of fact are involved and there are no findings of fact, we do not review the facts but assume that the trier of the facts found them in accord with its decision, and we affirm the decision if from the evidence it would be reasonable to find facts to support it.”
Also to be remembered is that plaintiff has the burden of affirmatively showing that defendant was doing business within the state.
Under Servel’s contract with its distributor title to all shipments passed from Servel in Indiana. The contract
Plaintiff cites and relies on Industrial Comm. v. Kemmerer Coal Co.
There is no evidence that the defendants’ employees either solicited, or made, any direct sales of goods in Utah, or sold any destined for Utah except to the wholesale distributors. The statement of Seward Abbott, regional manager for Servel, is:
“No * * * representative of Servel has business relations with any dealers [retailers] or members of the public in Utah.”
Plaintiff seeks support in the statement of its president, Harold A. Fresne, that a former regional service manager of the defendant
“Blair Hughes * * * [while] an employee of Servel * * * has serviced defendant’s products in the State of Utah on many and numerous occasions.”
This matter would not be controlling for three reasons: (1) The court was not obliged to so find because of the evidence that the regional service manager had no such duty and does not perform such services; (2) Mr. Hughes was a “former” regional service man and his activities did not relate to the time in question; (3) there is no indication that Hughes or Servel made any charge or received any compensation for such services, and (4) it is extremely doubtful whether servicing equipment, even if by Servel, would amount to doing business within the state. However, as is apparent from the circumstances herein delineated,
No authority has been cited which would support a conclusion that the activities of defendant herein above enumerated, are sufficient to render a foreign corporation amenable to process. It is indisputable that the mere presence here of an officer of a foreign corporation will not subject it to suit,
It is also well settled that an isolated transaction such as the installation of the one air-conditioning unit and heating system would not create the status of doing business here.
“* **•£**« [the corporation’s presence] is manifested only by casual, sporadic, or isolated exertions of the kind which it ordinarily performs, these indicia of its presence are too equivocal and uncertain to support the inference that it is doing business here.”
Thus before defendant’s acts could properly be classified as doing business within the State, it would have to be
We are appreciative of the fact that the policy underlying decisions of the court in cases such as this requires consideration of fair play to citizens desiring to seek redress in court for claimed injuries, as well as to the fact that foreign corporations who do business here should not be afforded any unfair advantage against local competing companies who pay taxes and licenses for doing business here and are subject to the jurisdiction of our courts.
But jurisdiction of citizens of other states may not be arbitrarily conferred by the law, nor assumed by the courts, of sister states. Under the federal constitution as interpreted by the United States Supreme Court, the authority of state courts over foreign corporations is limited to circumstances where they do
“business in the state * * * in such a manner and to such an extent that its actual presence there is established.”10
In this context, as noted in International Shoe Co. v. State of Washington,
“used merely to symbolize those activities of the corporation’s agent within the state which courts will deem to be sufficient to satisfy the demands of due process.”
If the rule were otherwise, burdens might be imposed upon manufacturers of nationally known and marketed products which they would be unwilling to risk, thus making it difficult or impossible for resident wholesalers to
There has been cited no authority, and we have found none which would bring the paucity of facts upon which plaintiff contends that the defendant Servel was doing business here within the meaning of that phrase as established by the numerous cases adjudicated upon the subject.
Affirmed. Costs to respondent.
Mayer v. Wright, 234 Iowa 1158, 15 N. W. 2d 268.
106 Utah 476, 150 P. 2d 373.
St. Clair v. Cox, 106 U. S. 350, 1 S. Ct. 354, 27 L. Ed. 222.
Holzer v. Dodge Brothers, 233 N. Y. 216, 135 N. E. 268; S. B. McMaster, Inc., v. Chevrolet Motor Co., D. C., 3 F. 2d 469; Truck Parts, Inc., v. Briggs Clarifier Co., D. C., 25 F. Supp. 602.
See Truck Parts, Inc., v. Briggs Clarifier Co., supra, Peebles v. Chrysler Corp., D. C., 57 F. 2d 867.
See Advance-Rumely Thresher Co. v. Stohl, 75 Utah 124, 283 P. 731.
202 Minn. 544, 279 N. W. 561, 566.
Bank of America v. Whitney Central National Bank, 261 U. S. 171, 43 S. Ct. 311, 312, 67 L. Ed. 594; Street & Smith Publications v. Spikes, 5 Cir., 120 F. 2d 895.
McGraff v. Charles Antell, Inc., 123 Utah 166, 266 P. 2d 703; see 146 A. L. R. 946, 101 A. L. R. 129, 60 A. L. R. 1011.
Concurring Opinion
Justice.
I concur in the result. At the incipience of his opinion, Mr. Justice CROCKETT quotes from Mower v. McCarthy, 122 Utah 1, 245 P. 2d 224, 226, as follows:
“In reviewing a case * * * where issues of fact are involved and there are no findings of fact, we do not review the facts but assume that the trier of the facts found them in accord with its decision, and we affirm the decision if from the evidence it would be reasonable to find facts to support it.”
In certain cases, it is no doubt proper for this court to indulge in that assumption. In my dissenting opinion in Mower v. McCarthy, I explained why I thought in view of the state of the record in that case we could not indulge in that assumption. In the instant case, I think we need not resort to that assumption. While it is true that the trial court made no findings of fact, the court did state in its “Order and Judgment of Dismissal” that “the defendant corporation is not subject to service of process within the State of Utah.” Thus I think it clear without indulging in any assumption that the trial court found that the defendant was not doing business in Utah.
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