Case Title: O'Brien v. Lanpar Company

Citation: 399 S.W.2d 340

Docket Number: A-10947

State: texas

Court: Texas Supreme Court

Date: 1966-02-02T00:00:00Z

Document:
399 S.W.2d 340 (1966) James H. O'BRIEN, Petitioner, v. LANPAR COMPANY, Respondent. No. A-10947. Supreme Court of Texas. February 2, 1966. Rehearing Denied March 9, 1966. Akin, Vial, Hamilton, Koch & Tubb, James A. Knox, with above firm, Dallas, for petitioner. James H. Martin, Dallas, for respondent. POPE, Justice. The question is whether an Illinois court had jurisdiction over a defaulting Texas corporation when it rendered an in personam judgment against the nonresident Texas corporation. Plaintiff James H. O'Brien, an Illinois attorney, sued defendant Lanpar Company in Illinois and obtained a judgment for $2,848.25 and costs. Lanpar is a Texas corporation and was served with process in Texas. Plaintiff then brought suit in Texas upon that judgment and the trial court sustained defendant's motion for summary judgment, holding that the Illinois judgment was not entitled to full faith and credit in Texas. The Court of Civil Appeals affirmed the judgment of the trial court. 391 S.W.2d 483. We reverse the judgments below. On June 24, 1960, Lanpar's president, Mr. W. W. Parmeter, went to Chicago and, after a conference, employed O'Brien *341 as the corporation's attorney to prosecute an action on its behalf in the Federal Court in Illinois. Lanpar agreed to compensate O'Brien on an hourly basis for his services. O'Brien successfully prosecuted the case in Illinois, and Lanpar paid a part of his fee but refused to pay the balance. O'Brien then filed suit. Process was served upon Lanpar at its place of business in Dallas by the Dallas County Sheriff. Defendant did not appear in answer to O'Brien's action, and the Illinois court granted default judgment for O'Brien. It is our opinion that the Illinois court had jurisdiction to render the in personam judgment and it is entitled to full faith and credit. The validity of the Illinois judgment is controlled by the law of Illinois but must satisfy the due process clause. Commonwealth of Massachusetts v. Davis, 140 Tex. 398, 168 S.W.2d 216 (1942), cert. den., 320 U.S. 210, 63 S. Ct. 1447, 87 L. Ed. 1848, reh. den., 320 U.S. 811, 64 S. Ct. 31, 88 L. Ed. 490; United States Fidelity & Guaranty Co. v. Richey, 18 S.W.2d 231 (Tex.Civ.App.1929, writ ref.). O'Brien asserted jurisdiction over the nonresident Texas corporation under Sections 16 and 17, Illinois Civil Practice Act. Ill.Rev.Stat. 1960, ch. 110. The relevant portions are: Essentially the problem is whether Lanpar's president's act in going to Illinois and in making the contract to employ an attorney to act on the corporation's behalf in prosecuting the Illinois action, was "[t]he transaction of any business" in Illinois under Section 17(a), Illinois has repeatedly held that the quoted sections reflect a purpose to assert jurisdiction over nonresident defendants to the extent permitted by the due process clause. People, State of California v. Western Tire Auto Stores, Inc., 32 Ill. 2d 527, 207 N.E.2d 474 (1965); Gray v. American Radiator and Standard Sanitary Corp., 22 Ill. 2d 432, 176 N.E.2d 761 (1961); Nelson v. Miller, 11 Ill. 2d 378, 143 N.E.2d 673 (1957); Kropp Forge Co. v. Jawitz, 37 Ill.App.2d 475, *342 186 N.E.2d 76 (1962); See Haas v. Fancher Furniture Co., 156 F. Supp. 564 (N.D. Ill.1957). The Supreme Court of the United States in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945) ushered in the concept that a state could assert in personam jurisdiction over a foreign corporation, assuming proper notice is given, if the foreign corporation has had certain minimum contacts with the state, saying: The Supreme Court reasserted its minimum contacts test in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957). It there held that a Texas court should have given full faith and credit to a California judgment against a nonresident Texas corporation. Sufficient contacts with the forum existed because the defendant Texas corporation mailed a reinsurance certificate to a California resident in that state. The California resident accepted the offer and thereafter paid his premiums by mail from California. The Court wrote: The Supreme Court of Washington in Tyee Construction Co. v. Dulien Steel Products Inc., 62 Wash. 2d 106, 381 P.2d 245, 251 (1963) reviewed the concept and stated three basic factors which should coincide if jurisdiction over a nonresident corporation is to be entertained: The Illinois judgment is entitled to full faith and credit. No one questions the fact that notice was given and that due *343 process was satisfied on that matter. The action was one which arose out of and was a part of the very contact for which Lanpar's agent visited Illinois. Lanpar's president purposefully went to Illinois to make contractual arrangements for an attorney. That contact was substantial rather than casual or fortuitous. Kaye-Martin v. Brooks, 267 F.2d 394 (7th Cir. 1959), cert. den., 361 U.S. 832, 80 S. Ct. 54, 4 L. Ed. 2d 75. The contact and contract were made in Illinois. Cf. Grobark v. Addo Machine Company, 16 Ill. 2d 426, 158 N.E.2d 73 (1959). Plaintiff O'Brien did not depend upon his own unilateral activity with respect to one who was outside and remained outside of Illinois, but upon the fact that Lanpar's agent contacted him in Illinois. Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958); 72 Harv.L.Rev. 695 (1959); See Thode In Personam Jurisdiction, 42 Tex.L.Rev. 279 (1964); Wilson, In Personam Jurisdiction Over Nonresidents: An Invitation and a Proposal, 9 Baylor L.Rev. 363 (1957); Stimson, 48 Am.Bar. Ass'n Jr. 725, 729 (1962); Annot., 49 A.L.R.2d 668 (1956). Some confusion exists between the term "doing any business" used in the Illinois so-called Long-Arm statute and the phrase "transacting business" found in Article 8.01 of the Texas Business Corporation Act, V.A.T.C.S. The Texas Act specifically states that maintaining or defending any action or suit may not constitute transacting business in this State. It should be remembered, however, that it is the Illinois law and not the Texas law that is in point. Moreover, whether Illinois had in personam jurisdiction with respect to the matters arising out of the very contacts between Lanpar and O'Brien in Illinois is a different matter from the question whether Lanpar or any other nonresident corporation does or does not subject itself to actions generally. See Thode, 42 Texas L.Rev. 279, 298. Section 8.01 relates to the general intrastate regulation of corporations. This is a different problem from that of a state's power to assert jurisdiction over a nonresident corporation arising out of and limited to its contacts in the forum state. Both O'Brien and Lanpar filed and urged motions for summary judgment. The trial court overruled O'Brien's motion, sustained defendant Lanpar's motion and rendered judgment that O'Brien take nothing. The intermediate court affirmed. We reverse the judgments of both courts and render judgment for plaintiff, James H. O'Brien, for the sum of $2,848.25 and costs in the sum of $25.35, that being the amount of the Illinois judgment. Rules 501, 505, Texas Rules of Civil Procedure; Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396 (1958).