Title: Aldridge v. Marco Chemical Co.
Citation: 356 S.W.2d 615
Docket Number: 5-2679
State: Arkansas
Issuer: Arkansas Supreme Court
Date: April 30, 1962

356 S.W.2d 615 (1962) Ida Mae ALDRIDGE et al., Appellants, v. MARCO CHEMICAL CO., Appellee. No. 5-2679. Supreme Court of Arkansas. April 30, 1962. Oliver M. Clegg, for Keith, Clegg &amp; Eckert, Magnolia, for appellants. Rose, Meek, House, Barron, Nash &amp; Williamson, by J. W. Barron, Little Rock, for appellee. HARRIS, Chief Justice. The sole question in this litigation is whether appellee is amenable to service under the provisions of Section 27-340, Ark.Stats. (1947), or to state it differently, did the Columbia County Circuit Court acquire jurisdiction over Marco Chemical Company, a foreign corporation, by virtue of service obtained under the authority of that section? Section 27-340 provides as follows: Appellants, engaged in poultry raising and egg producing, instituted suit against appellee, alleging, inter alia: Various counts of alleged negligence on the part of appellee were recited in the complaint, and appellants sought judgment in the amount of $9,950.63. Service was had upon the Secretary of State as agent for service of Marco Chemical Company, and appellee was notified as provided in Section 27-340. Thereafter, the Company filed its motion to quash the process issued, and to dismiss the complaint, for the reason that it was a foreign corporation, and had not been authorized to transact business intrastate in Arkansas, and had not designated an agent within the State upon whom process could be served. On hearing, the court held that the motion to quash should be sustained, and upon appellants' announcing that they elected to stand upon the service of process had, the court dismissed the complaint. From the judgment so entered, appellants bring this appeal. According to a stipulation entered into between the parties, appellee, Marco Chemical Company, is a foreign corporation, organized and existing under the laws of the state of Texas. It has not qualified to transact business in Arkansas. The company is principally engaged in selling animal feeds and ingredients therefor, and does not now have, nor has it ever had or maintained in the state of Arkansas any office, warehouse, or place of business whatsoever. Nor has it ever maintained within this state any physical facilities or any stock or merchandise. The company has no bank account within this state, and no salesmen or representatives who reside in Arkansas. Dealings with Ark-La Feed &amp; Fertilizer Company have been handled, according to the stipulation, in the following manner: Appellee vigorously contends that everything done was in interstate commerce; that its activities do not subject it to service of process as provided in Section 27-340, and, in support of the position taken, relies mainly upon our holding in Rodgers v. Howard, Judge, 215 Ark. 43, 219 S.W.2d 240, the opinion being delivered on April 4, 1949. As a matter of background (which we deem essential to a proper understanding of the issue involved), it should first be pointed out that the United States Supreme Court in International Shoe Company v. State of Washington et al, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, on December 3, 1945, held that a course of activity consisting merely of the solicitation of business, admittedly less than the "doing of business", subjected the acting foreign corporation to personal jurisdiction based upon constructive service. In 1947, the Arkansas General Assembly passed Act 347 (which includes the language of Section 27-340, heretofore mentioned). Dr. Robert A. Leflar, Distinguished Professor of Law, then Dean of the University of Arkansas School of Law, in an article appearing in 3 Arkansas Law Review, p. 18, wrote: In April of 1949, the Rodgers case was decided. Rodgers contended that Campbell Soup Company was amenable to service of process under Act 347, and the Court, noting that the contention posed the difficult question as to the applicability of the rule *619 announced in the International Shoe Company case, said: Less than three months later, this Court, in Chapman Chemical Co. v. Taylor et al, 215 Ark. 630, 222 S.W.2d 820, held that service on appellant, a foreign corporation, under the provisions of Act 347, was valid. There, as here, the foreign corporation argued that it had done no business in this state sufficient to bring it within the provisions of the Act. The facts, as set forth in the opinion, showed that the company sought to introduce the use of 2-4-D in the rice growing area of the state, and to that end, its representatives came into the state and conferred with officers of the Rice Growers Association. A test was made in this state to demonstrate that 2-4-D dust could be distributed from an airplane. From the opinion: In the following year (1950), in American Farmers Insurance Co. of Phoenix, Arizona v. Thomason, Guardian, 217 Ark. 705, 234 S.W.2d 37, in an opinion written by Dr. Leflar (who had, in the meantime, *621 been named Associate Justice of the Court), this Court said: A footnote at this point reads as follows: This, then, is the history of Act 347, and the cases decided thereunder. In the final analysis, appellee depends upon the Rodgers case, and appellants rely upon the Chapman case. Without hesitation or equivocation, we hold that the instant litigation is controlled by the Chapman case. Not only was the product delivered by the company's employees (as in the Chapman case), in a company truck, but this truck was especially equipped to make delivery of the product. The stipulation mentions the various activities engaged in by Marco Chemical Company, and it is noted that deliveries have been made over the state at various times, in addition to several deliveries to Ark-La. In other words, this is not a case of a single, isolated delivery, but consistent sales and deliveries have been made. We think logic unquestionably supports the view taken. Why should a company be permitted to solicit business through personal appeal by its salesmen, sell its product, and make delivery of that product through use of the highways of this state, and to enjoy this privilege without the obligation of defending an action for alleged damages occurring to Arkansas residents because of negligence of the company?[2] This would leave appellee corporation in the unusual, though enviable, position, of "having its cake and eating it, too." The legislature undoubtedly intended, in passing Act 347, to liberalize and extend the area in which foreign corporations could be required to answer in Arkansas for damages arising out of the conduct of their activities within this state. While we think the facts in this case are distinguishable from the facts in the Rodgers case,[3] we do not predicate, nor base this opinion, upon that premise. Actually, we are of the view that the Chapman case, in effect, overruled the Rodgers case, though it did not specifically so state. Therefore, as a matter of removing all doubt, we explicitly state that the Rodgers case can no longer be relied upon as authority for foreign corporations to evade the jurisdiction of our courts in factual situations similar to the one at bar. The judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion. GEORGE ROSE SMITH, J., not participating. [1] Emphasis supplied. [2] The stipulation also reflects that Marco duly registered its products for sale in this state with the State Plant Board as required by Act 108 of 1951; it also filed with the Board quarterly tonnage of its products shipped into the state. Appellants argue and cite authority that this is a further fact which would support their position that Marco Chemical Company was amenable to service in our courts. Since this fact is not considered controlling, we do not enter into a discussion of same. [3] We think there is a vast difference, on the one hand, in shipping goods or products into the state, and having such products delivered by commercial carrier, and, on the other hand, in delivering the product through company representatives.