Court Opinion

ID: 9625365
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:38:14.768273+00
Date Added: 2024-06-11T12:20:31.214982
License: Public Domain

JOHNSON, Vice Chief Justice.
This is an action brought by W. P. Milling Company, a corporation, as plaintiff, against the defendants, Ward R. McGavren and S. Howes Company, Inc., a foreign corporation, for damages resulting from alleged' breach of warranty of fitness of certain milling machinery purchased from defendants. The parties will be referred to as they appeared in the trial court.
The case was tried to a jury and resulted in a verdict and judgment in favor of plaintiff and against the one defendant only, S. Howes Company, who has perfected this appeal. Verdict and judgment having been in favor of the other defendant, McGavren, he need not be further considered as a party to the litigation. The defendant, S. Howes Company, was a foreign corporation not domesticated in this state and service of summons was had upon it by service on the Secretary of State. At every stage of the proceeding, the defendant objected to the jurisdiction of the court over it because it was a foreign corporation. That is the only proposition presented here. Therefore, the only question necessary for determination is whether or not said defendant was doing business, or had done 'business, in this state, making it amenable to legal process herein.
The plaintiff was organized for the purpose of constructing and operating a grain mill in Muskogee, Oklahoma. For all purposes of the case before us, all of the acts occurred in the year 1948. At that time, Ward R. McGavren was an independent broker, dealing in mill machinery on commission, with his place of business in Okla-home City. He had not had previous dealings with the defendant. The plaintiff desired purchasing a corn with cob and husk separator. It had purchased other mill machinery through McGavren and had ordered a separator, but was unable to get delivery on it. On January 12, McGavren mailed to the plaintiff information and circulars on a machine manufactured by defendant and recommended the purchase of a certain type and size. Inclosed in the letter were order blanks which McGavren recommended be filled out and mailed to the defendant in care of him, McGavren. The machine was ordered in the manner suggested, for delivery not later than June. McGavren acknowledged receipt of the order and forwarded it to the defendant. It was necessary that the order be accepted by the defendant at its home office, the machine to be shipped direct to the plaintiff. Previous to the order, McGavren explained the situation to the defendant and asked that the machine be guaranteed. In reply, the defendant wrote McGavren that it would guarantee the machine to perform as represented.
During the ensuing months, McGavren, after collaborating with defendant, gave detailed instructions to the plaintiff for all construction of the elevator and shuck house. Plaintiff built these structures in conformity with the instructions. There was considerable delay in the delivery of the machine and, before its shipment, the defendant had McGavren make an investigation of the different routes for the purpose of determining the best and fastest way to ship. It was shipped directly from the defendant’s plant f. o. b. to the plaintiff, arriving the early part of October. Shortly thereafter, McGavren was in Muskogee, while the machine was being installed. He asked one of the officers of the plaintiff if the invoice had been received. When informed that it had, he remarked that there was a discount if the purchase price was paid immediately. A check therefor was written by plaintiff to defendant and delivered to McGavren who forwarded it to said defendant. He was to receive his sales commission from the purchase price.
After the installation was complete, the machine was put into operation, and, within a few hours, the shucks were set on fire by the friction and carried into the shuck house while still burning. The resulting fire destroyed the shuck house. McGavren was notified and he went to Muskogee. When he was there, the machine was again *657started and another ire resulted. McGav-ren immediately called the defendant by telephone to report the condition. The defendant then notified a salesman in Kansas City to investigate, which he did. The defendant then wrote plaintiff that, based upon the report, other fans were being sent to be substituted in the mill. The trouble was not eliminated and defendant offered to take the machine back. The plaintiff refused the offer because of its losses, troubles, and the expenses necessary for removal and return of the machine. This action was filed for recovery of the damages on April 26, 1950.
Plaintiff in Error cites, quotes from, and principally relies upon the case of Wills v. National Mineral Company, 176 Okl. 193, 55 P.2d 449. There the question was whether the undomesticated foreign corporation was doing business within the state so as to be sued in this state and service of process obtained upon it. Therein we held that the quality, character and quantity of business conducted within the state may be sufficient to subject a foreign corporation to local process and yet be insufficient to require it to take out a license.
As will be readily seen from a reading of some of the recent cases discussed in leading Law Review articles (see Vol. 1 Okl.Law Review, 294-5 (1948); Vol. 45 Mich.Law Review, 218-21 (1946) ; 25 Col. Law Review, 1018 (1925); Vol. 16 Univ. of Chicago Law Review 523-24 (1949); Vol. 26 Univ. of So.Cal.Law Review, 215-16), dealing with the subject of the meaning of “doing business” for the purpose of making a foreign corporation amenable to local process, there is no rule of thumb by which determination may be made as to what constitutes the required amount of transacting business. Each case must depend upon the character of its particular facts. This, in substance, was the holding in the Wills case, supra. While this principle is approved by a majority of the courts, it is of little help in determining whether specific activities constitute such “doing of business” as to make the foreign corporation liable to local process.
In Oklahoma the question is raised chiefly by two statutes, Title 18 Okl.Stat.Ann. § 1.17 and § 472, which provide in effect that any foreign corporation “engaging in or transacting business” within the state can be sued and served by local process. Whenever the question has been raised of whether a corporation’s activities within the meaning of these statutes constitutes “doing business” (a term not defined by statute) this Court has held almost without exception that the corporation was liable to local process. For cases see 4 Oklahoma Digest Corporations, Recent cases, Wills case, supra; International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057; Jeter v. Austin Trailer Equipment Co., 122 Cal.App.2d 376, 265 P.2d 130 and Kneeland v. Ethicon Suture Laboratories, Inc., 118 Cal.App.2d 211, 257 P.2d 727, indicate a definite disposition to broaden the application of the term “doing business”. In Isaacs “An Analysis of Doing Business” 25 Col.Law Review 1018, supra, the author distinguished “doing business” under three legal purposes, namely, service of process, taxation, and qualification, the degree of activity required rising in the order named. The multiple standard for “doing business” is categorically stated to be the law in 20 C.J.S., Corporations, § 1828, and was recognized in the Wills case, supra.
It is argued that the factual situation in the instant case indicates only an isolated transaction, or a single transaction was not continuous in nature, and therefore, did not constitute “doing business” within the State, subjecting defendant to local process. Such argument is not based upon reason and justice. Courts of a particular state should have jurisdiction over all disputes arising out of contracts made (or to be performed) within the state, regardless of the number of contracts of the defendant which were made (or to be performed) there. Moreover, the test as to what activities will subject the foreign corporation to suit is “qualitative” not simply “mechanical” or “quantitative”. Marlow v. Hinman Milking Machine Co., D.C., 7 F.R.D. 751, 753, and cases cited therein. Therein it was said that the question is whether defendant was “doing business” *658•not the number of transactions or length ot time it was doing business. The defendant there was a foreign corporation whose .agents solicited orders for milking machines, which were shipped by the corporation from •its factory located in another state. Its agents advised with the purchasers how to use, or operate the machines and sometimes made minor repairs. There the facts were held sufficient to constitute “doing business” •within the state. To substantiate the holding, the court, in the opinion, said:
“ * * * The trend of the modern decisions is to hold the foreign corporation within more strict limits of Accountability in local courts. As now, Justice Rutledge of the Supreme Court .held while serving in the Court of Appeals for the District of Columbia, ‘ * * * very little more than “mere .•solicitation” is required * * * ’ to render a foreign corporation ‘ “present” for jurisdictional purposes.’ Frene v. Louisville Cement Co., 1943, 77 U.S.App.D.C. 129, 134 F.2d 511, 515, 146 A.L.R. 926. The United States Supreme Court appears to have verified this in International Shoe Co. v. State of Washington, supra. In that case the defendant manufactured footwear in Missouri and maintained no office in the State of Washington, where it had 'been served and sued. It employed ■eleven to thirteen salesmen in Washington under the direct supervision and •control of a sales manager in St. Louis, Missouri. The salesmen were residents ■of and lived in, Washington. Their principal activities were confined to Washington. The salesmen showed samples to prospective customers and sometimes rented permanent or temporary sample rooms in buildings or hotels. Their authority was limited •to ‘exhibiting their samples and soliciting orders from prospective buyers, at prices and on terms fixed by appellant.’ 'The orders were transmitted to the defendant’s Missouri office for acceptance or rejection and the merchandise was shipped f. o. b. from points outside Washington to purchasers in Washington. All merchandise shipped into Washington was invoiced at the place of shipment, and collections were made from that point. None of the salesmen were authorized to make collections or to enter into any contracts. Upon those facts, the Supreme Court held that the International Shoe Company’s contacts with, and activities in, the State of Washington were such that it was ‘doing business’ in that state.”
In keeping with the modern trend of judicial action we hold that facts herein disclose sufficient grounds for holding that defendant, a foreign corporation, was doing business within the state of Oklahoma and amenable to local legal process thereby rendering it present for jurisdictional purposes.
Judgment affirmed.
WELCH, CORN, ARNOLD and BLACKBIRD, JJ., concur.
HALLEY, C. J., and DAVISON, O’NEAL and WILLIAMS, JJ., dissent.