Court Opinion

ID: 9445685
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:36:34.432111+00
Date Added: 2024-06-11T17:30:22.661569
License: Public Domain

LOMBARD, Circuit Judge
(dissenting) .
I think the court’s decision robs the phrase “business venture” of all independent significance, contrary to the plain meaning of the statute. Moreover, the decision is also contrary to recent statements by the Supreme Court of Florida and to the current trend in many states to extend jurisdictional limits, which, concededly, they are at liberty to do if there are certain minimum contacts with the states. See International Shoe Co. v. State of Washington, 1945, 326 U.S. 310, 316, 66 S.Ct. 154, 99 L.Ed. 95; Note, Expanded Concepts of State Jurisdiction over Non-Residents: The Illinois Revised Civil Practice Act, 31 Notre Dame Law. 223 (1956).
Defendant was a holding company which owned and controlled various operating subsidiaries. On February 23, 1946, Louis Silver, president of the defendant, commenced negotiations for the lease of the Florida property involved in this case, on behalf of the defendants. Five months later, on July 18, 1946, defendant “cause [d] to be organized a wholly-owned subsidiary * * * under the name of Ann Lewis Shops of Tampa, Inc.” 142 F.Supp. 417, 418. Louis Silver became president of the subsidiary.
The negotiations started in February finally culminated in the lease and guaranty arrangement involved herein, which was dated September 10, 1946. It was signed by Silver on behalf of both parent and subsidiary on September 10, 1946 in New York City, and by the landlord on October 16, in Tampa.
It seems to me that this extended enterprise of organizing and establishing the business of its subsidiary in Florida easily fits within any plain or other meaning of “business venture” and that this is so regardless of whether defendant retained any stock in the subsidiary. Indeed, if the defendant had retained no stock at all but merely acted as an independent promoter, I find it difficult to see how this suit could be considered as anything but arising out of a business venture in Florida—the establishment of Ann Lewis of Tampa, Inc. The retention of stock should certainly not reduce Florida’s interest in the organization of Ann Lewis of Tampa and we should not fasten on this to interpret Florida’s own enactments in such a way as to inhibit the power she may exercise over non-residents who engage in transactions having contacts with that state.
The majority opinion, however, seems to construe appellant’s ease as resting solely on “ownership and control of subsidiary corporations that are doing business in Florida.” But here jurisdiction need not be based on the activities of a subsidiary in Florida, but on defendant’s own activities which go well beyond mere stock ownership and control. For this reason, there is no need to go into the question of whether Cannon Mfg. Co. v. Cudahy Packing Co., 1925, 267 U.S. 333, *5245 S.Ct. 250, 69 L.Ed. 634, should be “overruled,” for that ease is not in point. Cannon involved the problem of corporate presence, in which it was sought to impose the jurisdiction of a subsidiary’s state over the parent as to a suit not involving any activities by the parent within the subsidiary’s state. See D.C.W.D.N.C.1923, 292 F. 169, 170. The instant case presents a very different situation for here jurisdiction can be based not on the ownership and control of a subsidiary, but on all the parent’s activities in Florida that were required for putting the subsidiary in business, which included the lease and guaranty arrangement, and which lasted for at least eight months.1
We must remember that this is a Florida statute that we are construing, and that we sit as a Florida court. I find it difficult to believe that any Florida court would so inhibit its power as to hold the statute inapplicable to the defendant’s activities in the state, particularly after State ex rel. Weber v. Register, Fla.1953, 67 So.2d 619. In that case, the Supreme Court of Florida seemed to go out of its way to ignore continuous activity in operating an orange grove in Florida, in order to focus on the purchase of the grove and listing it for sale as a distinct venture. The Court said “there is a vast difference between the words ‘a business' and the words ‘business venture’ as used in § 47.16, supra. One may engage in a ‘business venture’ without operating, conducting, engaging in or carrying on a ‘business.’ ” It seems to ine the majority’s stress on the Cannon case, which dealt with “doing business” for corporate presence purposes, reflects a failure to distinguish between “carrying on a ‘business’ ” and “engag[ing] in a ‘business venture’ ” contrary to the explicit distinction made by the Supreme Court of Florida.
Finally, the fact that the phrase “business venture” has been used in the Florida statutes since 1911 does not support the majority view and implication that the Cannon rule is a long-established principle of the Florida law relating to the phrase “business venture.” In the first place, the fact that the phrase was first used in 1911 shows that the legislature cannot have intended to incorporate the Cannon rule which did not come into existence until 1925. In the second place, repeated reenactment of the phrase after Cannon was decided, indicates nothing at all about the Florida legislature’s attitude toward the Cannon rule in connection with transactions arising out of a business venture, for until the instant case the Florida statute had not been construed to apply the Cannon rule to cases involving the category of “business venture.” Indeed, there have been rather few cases in Florida involving the term “business venture.” Consequently it cannot be said that the Cannon rule has become part of the law of Florida relating to “business venture” and no overruling of Cannon is involved in the construction of the phrase which I believe we should adopt.
I would reverse.

. The majority’s final point that jurisdiction could not be based solely on the guarantee is not really apposite, for here, there is much more—the organization and establishment, extending for at least 8 months, of a business enterprise of which the guarantee is merely a part. Moreover, it is not clear that the Florida statute would not ground jurisdiction solely on the guarantee. See the interpretation of State ex rel. Weber v. Register, Fla.1953, 67 So.2d 619, in Stern, Conflict of Laws, 8 Miami L.Q. 209, 214-16 (1954); cf. Compania De Astral, S.A. v. Boston Metals Co., 1954, 205 Md. 237, 107 A.2d 357, 108 A.2d 372, certiorari denied, 1955, 348 U.S. 943, 75 S.Ct. 365, 99 L.Ed. 738; Smyth v. Twin State Improvement Corp., 1951, 116 Vt. 569, 89 A.2d 664, 25 A.L.R.2d 1193.