Case Name: Hale E. ROBERTS v. WORTHEN BANK & TRUST COMPANY
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1966-03-07
Citations: 183 So. 2d 811
Docket Number: No. 43608
Parties: Hale E. ROBERTS v. WORTHEN BANK & TRUST COMPANY.
Judges: All Justices concur except GILLESPIE, P. J., who dissents, and JONES, J., who took no part.
Reporter: Southern Reporter, Second Series
Volume: 183
Pages: 811–819

Head Matter:
Hale E. ROBERTS v. WORTHEN BANK & TRUST COMPANY.
No. 43608.
Supreme Court of Mississippi.
March 7, 1966.
Stratton & Jones, Brookhaven, for appellant.
R. Pearce Phillips, Brookhaven, for ap-pellee.

Opinion:
BRADY, Justice.
This is an appeal from a judgment of the .Circuit Court of Lincoln County, Mississippi, against appellant in the sum of $8,-050.31. The judgment was rendered on a judgment obtained in the Chancery Court of Pulaski County, Arkansas. Appellant had filed a general demurrer to appellee's declaration; the demurrer being overruled and judgment entered, appellant appeals.
The record discloses that the litigants in this cause entered into a written stipulation of'facts in the Circuit Court of Lincoln County, Mississippi. It was stipulated that the facts are to be considered as alleged in the declaration. Briefly, the pertinent facts therein are as follows:
On June 15, 1962, and at all times, the appellant was a nonresident of the State of Arkansas and a resident and citizen of Brookhaven, Lincoln County, Mississippi; the appellee, Worthen Bank & Trust Company, is a banking corporation organized under the laws of Arkansas' with its principal place of business at Little Rock, Arkansas.
On June 15, 1962, the .appellant, for a valuable consideration, executed and de^ livered to the appellee a promissory note in the amount of $29,575.80. Contemporaneously with the execution and delivery of said note, and for the purpose of securing the same, appellant executed and delivered to the appellee an aircraft chattel mortgage encumbering one 1958 Apache super custom model, two motor aeroplane. The note and chattel mortgage were executed in the city of Little Rock, Arkansas, and the chattel mortgage was duly acknowledged in the manner prescribed by law and recorded on July 9, 1962. On September 13, 1963, the above described aircraft was located in Pulaski County, Arkansas. The litigants agree that the two transactions above represent the business transacted by the appellant in the state of Arkansas, upon which jurisdiction was based in that suit which was filed by the appellee against appellant in Pulaski County, Arkansas, in which a personal decree and judgment were rendered in favor of appellee against appellant on October 31, 1963, in the sum of $20,-565.11.
The jurisdiction of the Arkansas Court was asserted under Act 101 of the General Assembly of Arkansas, 3A Arkansas Statutes Annotated sections 27-2501 — 27-2507 (Supp.1963), approved February 28, 1963, and referred to as the Uniform Interstate and International Procedure Act. The statute's definition of a person includes an individual, "whether or not a citizen of this State The Act provides that: "A court may exercise personal jurisdiction over a person, who acts directly as to a (cause of action) arising from the person's (a) transacting any business in this State;" and that: "When jurisdiction over a person is based solely upon this section, only a (cause of action) arising from-acts enu merated in this section may be asserted against him." The Act provides that: "When the exercise of personal jurisdiction is authorized by this section, service may be made outside this State by any form of mail addressed to the person to be served and requiring a signed receipt." The Act further provides that: "When service is made by mail, proof of service shall include a receipt signed by the addressee or other evidence of personal delivery to the addressee satisfactory to the court."
A copy of the summons for the appellant in the suit in the Chancery Court of Pulaski County, Arkansas, together with the service and a copy of the complaint filed therein, was deposited by United States certified mail at Little Rock, Arkansas, addressed to the appellant at his post-office box address in Brookhaven, Mississippi, and was delivered to the appellant on September 16, 1963, on which date appellant signed the return receipt, which was returned to the sender in Little Rock, Arkansas, and filed with the Chancery Clerk of Pulaski County, Arkansas, together with the affidavit as to service of process upon appellant of Stanley E. Price, attorney for the appellee.
In addition to the stipulation of facts, the record further discloses that the service as required by Act 101 of the General Assembly of Arkansas, approved February 28, 1963, was in order, and that the appellant made no appearance and filed no pleadings. A default judgment was taken against appellant for the sum of $20,565.11; said judgment and decree constituted a first and prior lien on" the aforesaid Apache aero-plane, which was condemned and sold by the commissioner of said court on December 12, 1963, for the sum of $14,000, the highest bid offered. On the same date, the total judgment, interest, and costs owing by appellant amounted to $22,050.31. After applying the proceeds of the sale, there remained a deficiency on said judgment of $8,050.31. On February 11, 1964, in the Chancery Court of Pulaski County, Arkansas, a deficiency judgment for said sum of $8,050.31, together with 6% interest thereon from December 12, 1963, was granted to the appellee against appellant by said court. No part of the deficiency judgment of $8,-050.31 has been paid and no appeal was ever prosecuted from said deficiency judgment, which is now in full force and effect against the appellant and is past due.
Unable to collect the deficiency judgment in Arkansas, appellee filed this suit in the Circuit Court of Lincoln County, Mississippi, against appellant. The appellant filed a general demurrer to the declaration, which was overruled. Appellant declining to plead further, a judgment was entered against him in the sum of $8,050.31, with interest at 6% per annum from December 12, 1963, until paid.
Attached as Exhibit A to the stipulation of facts was a photostatic copy of the note and chattel mortgage.
The promissory note executed by the appellant on June 15, 1962, provided for the payment at the appellee's office in Little Rock, Arkansas, of $29,575.80, "in 60 consecutive monthly instalments payable on the 29th day of each month, commencing July, 1962, each of said instalments except the one last maturing to be in the sum of $492.93 _»
The appellant's first contention is that the Arkansas Uniform Interstate and International Procedure Act cannot be constitutionally applied to acquire personal jurisdiction over the appellant. In support thereof, appellant asserts that prior to the enactment of said statute the appellant transacted only one isolated item of business, a loan for the purchase of an airplane, in Arkansas, and that subsequent thereto the state of Arkansas passed the Act which subjected him personally to the jurisdiction of the Arkansas Court by reason of the item of business which he had already performed. The appellant urges that this did not constitute the necessary minimum contacts, and that to subject him to the jurisdiction of the Arkansas courts offends the traditional notions of fair play and substantial justice in violation of the due process clause of the Constitution of the United States.
We consider the first contention of appellant, that he transacted only one isolated item of business in Arkansas. Appellant relies strongly upon the well reasoned case of Mladinich v. Kohn, 250 Miss. 138, 164 So.2d 785 (1964), in support of this point. The Mladinich case does not afford the appellant any help for the reason that factually it is not comparable to the case at bar. The Mladinich suit was brought against a resident of the state of Louisiana for a slander alleged to have been committed by his agent in making a speech in Harrison County. This Court, speaking through its present Chief Justice, W. N. Ethridge, pointed out that the defendant did no business in the state of Mississippi; that a religious association in this state had invited him to make a speech in a Baptist Church in Biloxi. His Louisiana employer did not know anything about the speech and had nothing to do with it. He received no remuneration for the speech, which he considered a civic duty and courtesy in response to the invitation. We accordingly held that the speech was an isolated, single act done with no financial gain in view and did not constitute the minimal contacts sufficient to give this state jurisdiction; that the quality and nature of his activities were inconsequential, and it would be unreasonable under these circumstances to assume jurisdiction. Chief Justice Ethridge further pointed out that the assumption of in personam jurisdiction over him would offend "traditional notions of fair play and substantial justice." In addition, appellant urges that "doing business" under the Mississippi rule to acquire jurisdiction requires the doing of a series of acts or a continuous activity, citing Century Brick Corp. of America v. Carroll, 247 Miss. 514, 153 So.2d 683 (1963); Davis-Wood Lbr. Co. v. Ladner, 210 Miss. 863, 50 So.2d 615 (1951) ; Mississippi Wood Preserving Co. v. Rothschild, 201 F.2d 233 (5th Cir. 1953).
In the case at bar we do not have an isolated single act comparable to a church speech. We have a series of acts culminating in a loan for the purchase of an airplane costing approximately $30,000. The appellant here had a substantial connection with the state of Arkansas. He chose the state of Arkansas as the situs of the business he desired to transact. He availed himself of the benefits and protection of Arkansas law in the preparation and execution of his contracts. He negotiated and secured a substantial loan of $29,575.80 from the appellee by executing a promissory note and a chattel mortgage to evidence and secure the loan. His note provided for sixty monthly installments payable over a period of five years at appel-lee's office in Little Rock, Arkansas, to cover the purchase of the airplane. The injured party is a bank doing business in Arkansas, and the cause of action arises from these acts, due to the appellant's default. We hold that appellant had sufficient minimal contacts with the state of Arkansas in compliance with the rule announced in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
The Arkansas Act 101 was patterned! after the provisions of the Illinois statute enacted in 1956. The decisions of the Illinois Supreme Court go much further in authorizing the entry of in personam judgments under sections 16 and 17 of the Civil Practice Act, Ill.Rev.Stat.1965, c. 110, § 16, 17, than do the Mississippi cases cited by appellant, dealing with the interpretation of Mississippi Code Anriotated section 1437 enacted in 1940, prior to Mississippi's amendment thereto. The Illinois statute as treated in Nelson v. Miller, 11 Ill.2d 378, 143 N.E.2d 673 (1957), has exactly the same language as that which is included in the Arkansas statute, namely: "The transaction of any business within this State." It is this language which must be considered in determining whether the contacts are sufficient in the case at bar. We are not concerned with section 1437, adopted in 1940; as construed in the Mississippi cases cited by appellant, but are concerned with the much broader and more modem statute adopted by the state of Arkansas in 1963. Just as we did not in the Mladinich case "attempt to define a rule pertaining to state jurisdiction over a single, isolated tort committed in this state," so we do not in the case at bar pass upon the question of whether a single act, or item of business, would be sufficient to award jurisdiction. We hold, however, that just as the launching of a ship involves more than its christening just before it slides down the ways into the water, so do the acts of the appellant here constitute more minimal contacts than the signing of a note and a chattel mortgage. The minimal contacts are sufficient to justify the state of Arkansas' asserting in personam jurisdiction over the appellant.
As was pointed out in Nelson v. Miller, supra:
Mr. Justice Holmes's observation, "The foundation of jurisdiction is physical power, McDonald v. Mabee, 1917, 243 U.S. 90, 91, 37 S.Ct. 343, 61 L.Ed. 608, can no longer be read restrictively. The foundations of jurisdiction include the interest that a State has in providing redress in its own courts against persons who inflict injuries upon, or otherwise incur obligations to, those within the ambit of the State's legitimate protective policy. The limits on the exercise of jurisdiction are not "mechanical or quantitative" (International Shoe Co. v. [State of] Washington, 1945, 326 U.S. 310, 319, 66 S.Ct. 154, 159, 90 L.Ed. 95,) but are to be found only in the requirement that the provisions made for this purpose must be fair and reasonable in the circumstances, and must give to the defendant adequate notice of the claim against him, and an adequate and realistic opportunity to appear and be heard in his defense. (11 Ill.2d at 384, 143 N.E.2d at 676.)
In passing, it was pointed out in Century Brick Corporation of America v. Carroll, 247 Miss. 514, 523-524, 153 So.2d 683, 686 (1963), as follows:
Under International Shoe, to comply with due process there must be certain "minimum contracts" with the forum state, so that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." However, the activities in the state should be continuous and systematic, and give rise to the obligation or liability sued upon, although one of these latter circumstances may suffice. (Emphasis added.)
While some jurisdictions have held or indicated that one single transaction of business is sufficient to justify those states in asserting in personam jurisdiction over nonresident defendants, it is unnecessary here, and we do not so hold. McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); Elkhart Eng'r Corp. v. Dornier Werke, 343 F.2d 861 (5th Cir.1965); Gkiafis v. Steamship Yiosonas, 342 F.2d 546 (4th Cir.1965); Wing v. Challenge Mach. Co., 23 F.R.D. 669 (S.D.Ill.1959); Melfi v. Goodman, 69 N.M. 488, 368 P.2d 582 (1962); Old Westbury Golf & Country Club, Inc. v. Mitchell, 44 Misc.2d 687, 254 N.Y.S.2d 679 (Sup.Ct.1964); cf. Note, 37 Miss.L.J. 177-80 (1965). Contra, Allied Finance Co. v. Prosser, 103 Ga.App. 538, 119 S.E.2d 813 (1961).
After considering the above cited cases, among others, we are not persuaded by the decision of the seventh circuit court of appeals in Trippe Mfg. Co. v. Spencer Gifts, Inc., 270 F.2d 821 (7th Cir.1959), wherein it is indicated that the McGee case is limited to the insurance field, nor do we deem it necessary to discuss, for the disposition of this case, the holding in Flexner v. Farson, 248 U.S. 289, 39 S.Ct. 97, 63 L.Ed. 250 (1919), for the reason that it has, in substance, been practically nullified by the subsequent decisions of the United States Supreme Court. Ehrenzweig, Conflict of Laws § 33 at 118-19 (1962); Goodrich, Conflict of Laws § 73 at 128-29 (1964); Leflar, Conflict of Laws § 31 (1959); Stumberg, Conflict of Laws Ch. 4 at 90-96 (1963).
There is no merit in the contention of appellant that the Arkansas statute cannot subject him personally to the jurisdiction of the Arkansas Court without'violating the due process clause of the 14th Amendment to the Constitution of the United States, because the Arkansas Act was enacted subsequent to the time he borrowed the money.
The basic question here is whether or not the Arkansas statute impairs the substantive right of the appellant or is simply remedial.
In Safeway Stores, Inc. v. Shwayder Bros., Inc., 238 Ark. 768, 384 S.W.2d 473 (1964), the Arkansas Supreme Court specifically held that Act 101, being remedial only, did not affect the substantive rights of the.appellee, and that service of process pursuant thereto was good even though the cause of action antedated the statute. The Supreme Court of Arkansas stated:
It is of course conceded that Act 101 was enacted some months after Chronister was injured by the alleged negligence of appellee, but it did not, in our opinion, affect any substantive rights of appellee. It was remedial only and therefore must be construed retrospectively in this case. (238 Ark. at 772, 384 S.W.2d at 476.)
There are other authorities which announce the same rule, as follows: McGee v. International Life Ins. Co., supra; Bluff Creek Oil Co. v. Green, 257 F.2d 83 (5th Cir. 1958); Teague v. Damascus, 183 F.Supp. 446 (E.D.Wash.1960); Nelson v. Miller, supra.
In the case of Nelson v. Miller, supra, an Illinois statute's new provision, which authorized the entry of in personam judgments on personal service of summons outside the state, was upheld by the Illinois Court in its application to acquire jurisdiction over a nonresident defendant, personally served in Wisconsin for a tort which occurred in Illinois prior to the effective date of the statute. The United States Court of Appeals in Bluff Creek Oil Company v. Green, supra, held that the retroactive application of the Illinois statute to nonresidents served outside the state did not violate the "due process" clause of the Constitution.
In Teague v. Damascus, supra, it was urged that the service was defective because the act complained of occurred approximately ten months before the statute, under which service was made, was passed. The motion to dismiss on the ground of defective service was denied.
In view of the foregoing authorities and in view of the decision of the United States Supreme Court in the McGee case, it is apparent that there is no merit in appellant's contention that the Arkansas statute (Act 101) cannot be applied to transactions which occurred before its passage, for the reason that the statute is remedial, and neither enlarged nor impaired appellant's substantive right and obligation under his note and chattel mortgage to the appellee. All that the statute did was to afford the appellee an Arkansas forum to enforce whatever substantive rights the appellee had against the appellant, and the appellant had no vested right not to be sued in the state of Arkansas. This certainly cannot offend traditional notions of fair play and substantial justice.
In the McGee case the United States Supreme Court stated as follows:
Turning to this case we think it apparent that the Due Process Clause did not preclude the California court from entering a judgment binding on respondent. It is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with that State. (Cases cited.) (355 U.S. at 223, 78 S.Ct. at 201, 2 L.Ed.2d at 226.)
The question presented in the case at bar is not one involving the purchase of personal property, such as a suit or topcoat, by a shopper or tourist on a weekend junket in another state. Involved here, financially and legally, are business transactions of considerable magnitude, the complete fruition of which required monthly payments extending over a period of five years. The appellant could have conducted his business affairs in any state, but he purposely availed himself of the privileges afforded him by the state of Arkansas. He invoked the benefit and protection of its laws. By such election and the benefits derived from the exercise thereof, he subjected himself to the jurisdiction of the Arkansas courts in any suits arising out of his business transactions.
In the suit filed in Arkansas, the summons, together with copies of the notice and the complaint, having been served upon the appellant by registered mail forty-five days before the date of trial, gave him actual and sufficient notice thereof and afforded him ample opportunity to appear and defend. Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278 (1940); International Shoe Co. v. State of Washington, supra; McGee v. International Life Ins. Co., supra.
We hold that the State of Arkansas had substantial connection with this suit and was justified in making reasonable provisions for redress in its local courts against the appellant.
The appellant, having breached his Arkansas contract, which he elected to execute, cannot now, by crossing a state line, gain asylum in this state and escape the just liabilities of his contractual violations. To hold otherwise would offend our notions of fair play and substantial justice. The decrees rendered against appellant are entitled to full faith and credit in the State of Mississippi. . ,
For the foregoing reasons, the judgment of the Circuit Court is affirmed.
Affirmed.
All Justices concur except GILLESPIE, P. J., who dissents, and JONES, J., who took no part.