Case Name: ROYAL FURNITURE COMPANY v. WICHITA FURNITURE COMPANY
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1920-12-08
Citations: 180 N.C. 531
Docket Number: 
Parties: ROYAL FURNITURE COMPANY v. WICHITA FURNITURE COMPANY.
Judges: 
Reporter: North Carolina Reports
Volume: 180
Pages: 531–534

Head Matter:
ROYAL FURNITURE COMPANY v. WICHITA FURNITURE COMPANY.
(Filed 8 December, 1920.)
Summons — Process—Service—Nonresidents—Principal and Agent — Corporations.
Under tbe principle tbat valid service of summons can be made upon a nonresident, by service upon bis agent bere having charge or management of a branch of bis principal’s business requiring tbe exercise of bis own judgment or discretion; it is held that service in this State, upon the agent of a nonresident furniture corporation, who had discretionary power or judgment in purchasing furniture, is valid in plaintiff’s action to recover on a contract of sale of furniture made with the same person.
Appeal by defendant from Harding, Jat tbe May Term, 1920, of Caldwell.
This is an Action to recover $324 alleged to be due by contract.
Tbe defendant, a foreign corporation, entered a special appearance, and moved to dismiss upon tbe ground tbat H. T. Leslie was not a managing agent of defendant, and upon tbe bearing of tbe motion tbe following facts were found and tbe following order made:
“1. A summons was issued herein on 27 August, 1919, wbicb was served by tbe sheriff of Caldwell County on tbat date. Tbe sheriff made return as follows: ‘Served on 27 August, 1919, "by leaving a copy of tbe same with H. T. Leslie, managing agent of tbe defendant company/
“2. Tbe defendant is a corporation of tbe State of Kansas. Tbe said H. T. Leslie is its employee, but is not an officer or director of tbe corporation.
“3. Tbat at tbe time of the service of tbe said summons upon tbe said H. T. Leslie in Lenoir, Caldwell County, tbe said H. T. Leslie was on a visit to said town in behalf of tbe defendant for tbe purpose of buying furniture for tbe defendant. Tbe said Leslie is buyer of tbe defendant corporation, and has authority to make purchases as above. Tbe order upon wbicb tbe controversy and suit arose was made by said Leslie in behalf of bis principal. The l'efusal to pay the bill which is tbe subject of this suit was made by defendant through tbe agency of tbe said Leslie. Upon tbe occasion when tbe service was made upon the said Leslie be was present in North Carolina for tbe purpose of making contracts for merchandise for tbe defendant, and did actually enter into contracts for tbe purchase of furniture in' behalf of said defendant.
“Tbe court therefore bolds tbat tbe said Leslie having power to contract a debt for tbe defendant corporation within this State, is such a managing .agent that be may be served with summons for the recovery of said debt, and denies tbe motion of defendant upon its special appearance, and directs tbat answer be filed within thirty days from tbe adjournment of this term.” Defendant excepted.
Tbe action was afterwards tried, and from a judgment for tbe plaintiff defendant appealed.
Marie Squires for plaintiff.
Lawrence Waleefield for defendant.

Opinion:
AxxobN, J.
Leslie, upon whom tbe summons was served, made tbe contract for tbe defendant on wbicb tbis action rests. He was tbe buying agent of tbe defendant, and as sneb bad to exercise bis discretion and rely on bis own judgment. At tbe time tbe summons was served be was in North Carolina, engaged in making contracts for tbe defendant for merchandise, and while here did make such contracts. Tbe letter refusing to pay tbe claim of tbe plaintiff is signed, "The Wichita Wholesale Furniture Company, per H. T. Little."
These facts fully sustain tbe ruling that Leslie was a managing agent upon wbom service of tbe summons could be made.
"Tbe term 'managing agent' has no strict legal definition, and it is not easy to formulate or lay down a general rule that will govern all cases. Tbe question must depend in every case on tbe kind of business conducted by tbe corporation, what tbe general duties of the supposed 'managing agent' are, and whether it can be fairly said that service on such agent would bring notice to tbe corporation. Much discussion may be found in tbe eases on tbis question, and it is one on which there is some disagreement. Tbe earlier cases held that a managing agent was one who bad full and complete authority in all branches of tbe corporation's business. Tbe later decisions, however, are more liberal in their interpretation of tbe term, and tbe weight of authority and tbe better rule is that a managing agent is one who has exclusive supervision and control of some department of tbe corporation's business, the management of which requires of such person tbe exercise of independent judgment and discretion, and tbe exercise of such authority that it may be fairly said that service of summons on him will result in notice to tbe) corporation." 21 R. C. L., 1353.
"Tbe object of tbe service is attained when tbe agent served is of sufficient rank and character as to make it reasonably certain that tbe corporation will be notified of tbe service, and tbe statute is complied with if be be a managing or business agent on any specified line of business transacted by tbe corporation in tbe State where tbe service is made." Denver & R. G. R. Co. v. Roller, 100 Federal (C. C. A.), 741.
"As a general rule, a managing agent of a foreign corporation, within tbe contemplation of a statute authorizing service of process on such- an officer, is one whose position, rank, and duties make it reasonably certain that tbe corporation will be appraised of tbe service made; in other words, one who stands in tbe shoes of tbe corporation in relation to thá particular business managed by him for tbe corporation. Doe v. Springfield Boiler & Mfg. Co., 44 C. C. A., 128; 104 Fed., 864; Palmer v. Chicago Evening Post Co., 85 Hun., 403; 32 N. Y. Supp., 992; Beale, Foreign Corp., sec. 273; Murfree, Foreign Corp., sec. 215." Note 4 L. R. A. (N. S.), 460.
"It may be said, however, that tbe later decisions are more liberal in interpreting tbe term 'managing agent' tban were tbe earlier ones. While no general rule can be stated wbicb will serve to assist in determining tbe matter, sucb managing agent must be in charge, and have tbe management of some department of tbe corporation's business, tbe management of wbicb requires of tbe agent tbe exercise of an independent judgment and discretion; not that be shall not be under tbe general direction of tbe corporation; all agents are subject to tbe general control of their principals, but in tbe management of bis particular department be shall have authority to manage and conduct it at bis discretion and judgment direct." Federal Betterment Co. v. Reeves, 4 L. R. A. (N. S.), 465.
"A person who has authority to contract a debt for tbe corporation within this State is so far tbe managing agent within tbe State that service may be bad upon him for that debt that will bind tbe corporation. Tbe agent is commissioned to contract tbe debt, and tbe corporation thereby secures tbe benefit of bis services. It must also take tbe burden of being liable to an action therefor." Klopp, Bartlett & Co. v. C. C. G. W. Co., 33 Am. St., 669.
We need not, however, go further tban our own State, as tbe same principle is stated by Hoke, J., in Whitehurst v. Kerr, 153 N. C., 79, as follows: "While there is some apparent conflict of decision in construing these statutes providing for service of process on corporations arising chiefly from tbe difference in tbe terms used in tbe various statutes on tbe subject, tbe cases will be found in general agreement on the position that in defining tbe term 'agent' it is not tbe descriptive name employed, but tbe nature of tbe business and tbe extent of tbe authority given and exercised wbicb is determinative, and tbe word does not properly extend to a subordinate employee without discretion, but must be one regularly employed, having some charge or measure of control over tbe business entrusted to him, or of some feature of it, and of sufficient character and rank as to afford reasonable assurance that be will communicate to bis company tbe fact that process has been served upon him."
All of these conditions are met in this case; tbe defendant was notified of tbe service, and tbe motion to dismiss was therefore properly denied.
No exceptions were taken by tbe defendant on tbe trial of tbe issues.
No error.