Amercoat Corp. v. Reagent Chem. & Research Inc.

261 A.2d 380, 108 N.J. Super. 331
CourtNew Jersey Superior Court Appellate Division
DecidedJanuary 29, 1970
StatusPublished
Cited by26 cases

This text of 261 A.2d 380 (Amercoat Corp. v. Reagent Chem. & Research Inc.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amercoat Corp. v. Reagent Chem. & Research Inc., 261 A.2d 380, 108 N.J. Super. 331 (N.J. Ct. App. 1970).

Opinion

108 N.J. Super. 331 (1970)
261 A.2d 380

AMERCOAT CORPORATION, PLAINTIFF,
v.
REAGENT CHEMICAL & RESEARCH, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
KANSAS CITY SOUTHERN RAILWAY COMPANY AND ATCHISON, TOPEKA AND SANTE FE RAILWAY COMPANY, THIRD-PARTY DEFENDANTS-APPELLANTS.

Superior Court of New Jersey, Appellate Division.

Argued September 29, 1969.
Decided January 29, 1970.

*334 Before Judges GOLDMANN, LEWIS and MATTHEWS.

Mr. Benjamin P. Michel argued the cause for appellant Kansas City Southern Railway Company (Messrs. Riker, Danzig, Scherer & Brown, attorneys).

Mr. Frederick F.R. Gruen argued the cause for appellant Atchison, Topeka and Santa Fe Railway Company (Messrs. Lum, Biunno & Tompkins, attorneys).

Mr. David I. Fox argued the cause for respondent (Messrs. Fox. Yanoff and Fox, attorneys).

The opinion of the court was delivered by GOLDMANN, P.J.A.D.

Third-party defendants Kansas City Southern Railway Company (Kansas City) and Atchison, Topeka and Santa Fe Railway Company (Santa Fe) have, pursuant to leave granted, each appealed from a denial of their motions to dismiss a third-party complaint brought by defendant Reagent Chemical & Research, Inc. (Reagent), or to quash service of process. The appeals were consolidated.

Plaintiff Amercoat Corporation (Amercoat), a California corporation registered to do business in New Jersey, is a manufacturer of chemical storage tanks. Defendant Reagent, a New Jersey corporation having its principal place of *335 business at Middlesex, N.J., stores and sells chemicals. Amercoat instituted an action against Reagent in the Law Division on a book account to recover $6,418.90, the purchase price of two chemical storage tanks sold and delivered. The sales contract called for delivery of the tanks from Amercoat's plant in Ardmore, Oklahoma, to Reagent's operation at Port Arthur, Texas.

Reagent's answer denied the debt and asserted a breach of contract in that the tanks were damaged and unfit for use when delivered. By way of counterclaim Reagent claimed damages directly resulting from plaintiff's breach because it had been obliged to purchase replacement tanks at higher prices and to transport chemicals from a distance at great expense during the period when no tanks were available to replace those plaintiff had agreed to sell and deliver.

Reagent also filed a third-party complaint in two counts against Kansas City and Santa Fe, over whose lines the tanks had been shipped by Amercoat, the theory being that if delivery to Reagent was completed upon Amercoat's depositing the tanks with the railroad at Ardmore, Oklahoma, one or both carriers would be liable to Reagent for the losses incurred through their breach of the carriage contract and for negligence. The first count demanded judgment for all sums that might be adjudged against Reagent in favor of Amercoat; the second count sought recovery from the third-party defendants should it be determined that Amercoat was not liable for damages under Reagent's counterclaim.

Kansas City is a Missouri corporation having its principal place of business in Kansas City, Mo., and operates directly in Missouri, Kansas, Arkansas, Louisiana, Oklahoma and Texas. Santa Fe is a Kansas corporation having its principal place of business in Chicago, Ill., and operates directly in Illinois, Missouri, Kansas, Oklahoma, Louisiana, California, New Mexico and Kentucky. Defendant Reagent attempted service of process on the carriers in two ways: (1) by serving the registered agent of Penn-Central Company in New Jersey as agent for the third-party defendants, *336 and (2) by sending copies of the summons and third-party complaint by registered mail to Kansas City at its Missouri office and to Santa Fe at Ardmore, Okla. — this pursuant to R.R. 4:4-4(d), now R. 4:4-4(c)(1).

Kansas City and Santa Fe successfully challenged the attempted service on Penn-Central Company, defendant Reagent conceding that there was no basis for such service. However, they were unsuccessful in quashing the substituted service of process made under the cited rule. They had moved to dismiss the third-party complaint or to quash the service for the reason that they lacked sufficient "minimum contacts" with New Jersey and for the further reason that the doctrine of forum non conveniens militated against Reagent maintaining its suit in New Jersey.

On this appeal the third-party defendants claim error in that (1) the assertion of jurisdiction over them would violate due process of law and constitute an unreasonable burden on interstate commerce, and (2) regardless of the resolution of the jurisdictional issue, the third-party suit should have been dismissed on the basis of forum non conveniens.

I

R.R. 4:4-4(d), now part of R. 4:4-4(c) (1), authorized substituted service of process on a foreign corporation, where service could not be made upon it in any of the other ways listed in that section of the rule, "subject to due process of law, by mailing, registered mail return receipt requested, a copy of the summons and complaint to a registered agent for service, or to its principal place of business, or to its registered office." The clear purpose of the rule is "to vest our courts with jurisdiction over foreign corporations to the outer limits permitted by due process." Corporate Development Specialists, Inc. v. Warren-Teed Pharmaceuticals, Inc., 102 N.J. Super. 143, 148 (App. Div. 1968). By affidavit both Kansas City and Santa Fe contended that they are not New Jersey corporations, maintain *337 no office and employ no personnel in New Jersey, own no property here and do no business in this State. They concede, however, that they have representatives in their respective New York City offices, who regularly call upon shippers in New Jersey to point out the advantages of routing their shipments, where practical, over their lines, and to acquaint shippers with the facilities and equipment available to them. They claim that their only connection with New Jersey is their bailment of cars to local railroads. This is explained as follows: When Kansas City or Santa Fe, or any other out-of-state connecting carrier, accepts a freight load which is ultimately to be routed into New Jersey for delivery there, the out-of-state connecting carrier charges the shipper the full price of the start-to-finish haul, carries the load over its tracks, delivers it to the railroad with tracks in New Jersey at a point where the local railroad's tracks meet those of the out-of-state railroad, and pays the local railroad on a pro rata basis for that fraction of the total mileage which its hauling constitutes. Thus, if a Kansas City or Santa Fe freight car traverses the New Jersey tracks of the Penn-Central Railroad, for example, then Penn-Central would be paid a rental fee in accordance with the industry-wide custom and practice laid down by the Association of American Railroads.

In support of their argument, the third-party defendants refer to federal holdings to the effect that "mere solicitation" in a state by a nonresident corporation is an insufficient relationship to support the exercise of extraterritorial jurisdiction over that company, e.g., Green v. Chicago, Burlington & Quincy Ry., 205 U.S. 530, 27 S.Ct. 595, 51 L.Ed. 916 (1907); Michigan Central R. Co. v. Mix, 278 U.S. 492, 49 S.Ct. 207, 73 L.Ed. 470 (1929).

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Bluebook (online)
261 A.2d 380, 108 N.J. Super. 331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amercoat-corp-v-reagent-chem-research-inc-njsuperctappdiv-1970.