Anderson v. Page & Hill Homes, Inc.

88 F. Supp. 408, 1950 U.S. Dist. LEXIS 4157
CourtDistrict Court, D. North Dakota
DecidedJanuary 20, 1950
DocketCiv. No. 1956
StatusPublished
Cited by2 cases

This text of 88 F. Supp. 408 (Anderson v. Page & Hill Homes, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson v. Page & Hill Homes, Inc., 88 F. Supp. 408, 1950 U.S. Dist. LEXIS 4157 (D.N.D. 1950).

Opinion

VOGEL, District Judge.

This is an action for damages for breach of contract. The plaintiff is a citizen and resident of the State of North Dakota. The defendant is a foreign corporation, being incorporated under the laws of the State of Minnesota. The amount sued for is in excess of $3,000.00, exclusive of costs. Service of the summons and complaint on the defendant is claimed to have been made by serving one Maurice Diehl, who is alleged to be the agent of the defendant, engaged in the defendant’s business within the State of North Dakota. The defendant has appeared specially, objects to the jurisdiction of the Court, and has moved for an order vacating and setting aside the purported service of the summons and complaint upon the ground that the defendant is a foreign corporation not subject to the jurisdiction of the United States District Court for the District of North Dakota. The motion was presented to the Court on the affidavits of witnesses, without testimony being taken, and upon the argument and briefs of respective counsel.

The affidavits show that the defendant is a Minnesota corporation engaged in the manufacture and sale of prefabricated houses. The defendant has a representative, Maurice Diehl, who resides in the City of Minneapolis, Minnesota, and who is employed to travel through the States of North and South Dakota for the purpose of establishing dealer-builders in those states for the defendant. Diehl’s duties are limited to the establishment of such dealer-builders for the defendant in the states referred to. He is without power to approve orders, approve dealer-builder’s contracts, make contracts or legally commit the defendant corporation in any other way. As a representative of the defendant, his duties are to establish dealer-builders for the defendant subject to the rejection or approval of the home office of the defendant, and no such contracts are binding upon the defendant until approved by its home office in Minnesota. The dealer-builders established by Diehl and subsequently approved by the home office of the defendant are not agents of the defendant but are independent contractors. All merchandise shipped pursuant to orders taken by the dealers in North Dakota and accepted by the defendant in Minnesota is shipped directly to the dealers in the State of North Dakota from points outside of said state. Payment for the merchandise so shipped is made by the dealers directly to the office of the defendant in Minnesota. Diehl does not regularly receive payment for any merchandise of the corporation shipped into the State of North Dakota pursuant to orders from the dealer-builders. All payments made to Diehl as representative of the defendant for salary and expenses are sent to him from outside of the State of North Dakota. The defendant does not maintain an office, warehouse or store within the State of North Dakota and does not maintain any stock of goods therein. It does not maintain a bank account in the State of North Dakota and it does not own or lease any real property within the State of North Dakota. In some instances, but not as a general rule, Diehl receives and receipts for moneys due from dealers to the defendant.

On April 3, 1949, the plaintiff and the defendant entered into a contract in writing, under the terms of which the plaintiff had the exclusive privilege for the sale within Cass County, North Dakota, and Clay County, Minnesota, of prefabricated houses, known as Page and Hill Homes, manufactuered by the defendant. Plaintiff proceeded operating under the terms of the contract within the territory provided and built homes under the name “Nodak Home Builders”, entered into advertising and took steps necessary to obtaining additional capital to operate the business in the territory covered by the contract.

It is alleged that subsequent to the execution of the contract and after the parties had commenced operation thereunder, the defendant, in violation of the terms thereof, entered into a second contract with Carl Ike and Son for the sale of ten Page [410]*410and Hill Homes within Cass County, North Dakota; that the plaintiff’s profit on the sale of such ten homes would have amounted to the sum of $7,000.00, wherefore plaintiff claims that he was damaged in such amount.

It further appears that prior to the institution of this action, one of the attorneys for the plaintiff called the defendant’s home office over long distance telephone and presented plaintiff’s objection to the sale of the defendant’s prefabricated houses in Cass County, North Dakota, through persons other than the plaintiff and claimed that such action constituted a breach of the contract between the parties. Plaintiff’s counsel was advised thát the defendant’s Mr. Maurice Diehl, its representative, would come to Fargo to discuss the matter. Mr. Diehl did make a trip to Fargo for that purpose, but no satisfactory adjustment was made and Diehl was served with the summons and complaint while in the City of Fargo pursuant to the telephone call referred to and the arrangements made therein.

The defendant takes the position that it is not subject to the jurisdiction of the United States District Court for the District of North Dakota ánd that to allow the service of process made herein to stand would be a violation of the due process clause of the Fourteenth Amendment to the Constitution. Rule 4(d) (3) of the Rules of Civil Procedure, 28 U. S.C.A., provides that service of the summons and complaint may be made as follows :

“(3) Upon a domestic or foreign corporation or upon a partnership or other unincorporated association which is subject to suit under a common name, by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant.” (Emphasis supplied.)

Section 28-0608 of the North Dakota Revised Code of 1943, provides:

“28-0608, Foreign Corporation Without Authorized Agent; Service of Summons Upon. In a case where a foreign corporation, joint stock company, or association shall not have appointed a lawful attorney upon whom service of process in a civil action may be made and such foreign corporation, joint stock company, or association cannot be served personally with such process according to the provisions of section 28-0607, service thereof may be made on any person who shall be found within this state acting as the agent of, or doing business for, such corporation, joint stock company, or association. But the service provided for in this section can be made upon a foreign ■corporation, joint stock company, or association only when it has property within the state or when the cause of action arose therein.” (Emphasis supplied.).

The defendant had no person within North Dakota designated as its agent for service of process, and Diehl is not such an officer of the corporation as is contemplated by Section 28-0607 of the North Dakota Revised Code of 1943. Plaintiff’s counsel, however, direct attention to the fact that Diehl, who was the person served, was acting as the agent of the defendant and was doing business for the defendant within the State of North Dakota and that the cause of action arose within the State of North Dakota. They rely in part on Wheeler v. Boyer Fire Apparatus Co., 63 N.D. 403, 248 N.W. 521, which they claim is squarely in point, and Ellsworth v. Martindale-Hubbel Law Directory, 65 N.D. 297, 258 N.W. 486.

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Cite This Page — Counsel Stack

Bluebook (online)
88 F. Supp. 408, 1950 U.S. Dist. LEXIS 4157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anderson-v-page-hill-homes-inc-ndd-1950.