Edward Sales Co. v. Harris Structural Steel Co.

17 F.2d 155, 1927 U.S. Dist. LEXIS 945
CourtDistrict Court, D. Maine
DecidedJanuary 15, 1927
StatusPublished
Cited by4 cases

This text of 17 F.2d 155 (Edward Sales Co. v. Harris Structural Steel Co.) is published on Counsel Stack Legal Research, covering District Court, D. Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edward Sales Co. v. Harris Structural Steel Co., 17 F.2d 155, 1927 U.S. Dist. LEXIS 945 (D. Me. 1927).

Opinion

PETERS, District Judge.

The plaintiff, a Maine corporation, brought this action of assumpsit in this court against the defendant which is a New York corporation having its principal and usual place of business at New York City. Service was made by delivering a summons to John P. A. Merrill, Esq., described in the return as the defendant’s “attorney in the state of Maine, duly appointed.” The defendant appeared specially, challenged the jurisdiction of this court, and moved that the service be set aside.

Questions of fact arising on the motion were heard by me and my findings follow..

There is no presumption in favor of jurisdiction. United States courts, which are created by statute, “can have no jurisdiction but such as the Statute confers.” Sheldon v. Sill, 8 How. 441, 12 L. Ed. 1147.

The act of 1875 (18 Stat. 470), relating to venue, a substantial re-enactment of the act of 1789 (1 Stat. 73), provides that “no civil suit shall be brought before either of said courts against any person by any original process or proceeding in any other district than that whereof he is an inhabitant, or in which he shall be found at the time of serving such process,” etc.

The present statute is not worded exactly the same (Comp. St. § 1033), the word -“found” being omitted, but the law is the same. By the change it was “by no means intended to discard the long-established doctrine that the defendant must be legally found and served in the district in which he is sued.” Harland v. United Lines Tel. Co. (C. C.) 40 F. 312, 6 L. R. A. 252.

A corporation may be “found” in a district, if it has to some extent moved into the district and is doing business there. “Jurisdiction taken of foreign corporations * * * does not rest upon a fiction of constructive presence, like fqui faeit per alium facit per se.’ It flows from the fact that the corporation itself does business in the state or district in such a manner and to such an extent that its actual presence there is established.” This is the present definite rule laid down by the Supreme Court in Bank of America v. Whitney Central Nat. Bank, 261 U. S. 171, 43 S. Ct. 311, 67 L. Ed. 594.

Consequently it is necessary to determine at the outset, before taking up the ef.feet of the Maine statute, whether the defendant was doing business in Maine in such a manner and to such an'extent as to warrant the inference that it was there present.

The facts seem to be that the defendant corporation, with its headquarters and offices in New York City, was engaged in the business of finishing and fabricating structural steel. In January, 1926, it made a written contract with the plaintiff (in substitution for a similar one of the year before with the plaintiff’s president individually), in which it was provided that:

“The Harris Structural Steel Company, Inc., hereby appoints the said Edward Sales Company, Inc., as the sole and exclusive agents of the Harris Structural Steel Company, Inc., to represent the corporation of the first part in obtaining contracts for the fabrication and erection of structural steel in the states of Maine, New Hampshire, Vermont, and Massachusetts, excluding Boston, Mass., the duty of said agent being to procure plans and specifications, forward them to the corporation of the first part for quotations on the work, and secure contracts for fabrication, all in -the name of the- Harris Structural Steel Co., Inc.”

Upon receipt of plans and specifications from the agent, the Harris people were to make quotations, whereupon the agent could increase the bid to cover its own profit. All contracts procured by the agent were to be in the name and subject to the approval of the Harris people, and executed by an officer of their corporation. During 1925 and the first half of 1926 the Edward Sales people, as agents, and their individual predecessor, solicitated business and actually sold about $2,800 worth of steel, which was shipped into Maine in three lots invoiced to [157]*157the Edward Sales Company. This was the only material ever shipped into Maine. No material was ever manufactured or labor employed by the defendant in Maine.

The Edward Sales people have an office in Portland with their name on the door. They were furnished some of the defendant’s letter heads and used them in Maine. It was claimed by the Sales people that Harris, an officer of the defendant, agreed to pay and did pay $500 toward the rent of the office mentioned. The effect of this testimony was considerably impaired by the counterclaim that the $500 was a loan, and a note for that amount was produced, given to the defendant by the plaintiff’s president at the time of the payment to him of $500. It was claimed, on the other hand, that the note was not to be paid, and it was not paid. But the fact remains that the defendant had no regular established office of its own in Maine, and no employees, officers, or members stationed there.

Early in 1926 negotiations were had by the Sales Company (participated in by an officer of the defendant) with one De Puy for the building of a hotel in Portland. Plans were drawn and figures made.

If this matter ever went beyond the conversation stage, at least no formal contract was signed and no work was done.

At the very earnest suggestion of the plaintiff’s president to an ‘officer of the defendant, a suit was brought against De Puy in the name of the defendant by Mr. Merrill, as attorney for the defendant, and that suit is still pending in the Maine courts. This was to recover lost profits arising from an alleged contract to build the hotel.

At about the same time the Sales Company was negotiating with the Paul Hildreth Company, of Lewiston, to build a hotel there. These negotiations bore fruit to the extent of a contract, but did not result in any construction. It is claimed by the plaintiff that this contract was procured in its name for the defendant, that the defendant accepted and assumed it, and agreed to pay the plaintiff for procuring it. The instant suit is brought by the plaintiff to recover under that very agreement to pay, and for the purposes of this discussion it may be assumed that the plaintiff’s allegations are well founded.

These and similar activities of the defendant in Maine are not such as to warrant the inference that the defendant corporation was there present.

The appointment of the plaintiff aá an agent to procure business in this state was the basis of its activities. But “a foreign corporation is not doing, carrying on, transacting or engaging in business in a state, within the meaning of the statutes under consideration, by merely appointing an agent for the transaction of future business therein.” 14a Corp. Juris, p. 1279.

The defendant brought a suit in Maine, but “it is well settled that engaging in litigation does not constitute doing business within the meaning of constitutional and statutory provisions, against doing business in the state without compliance with the prescribed conditions, requirements,” etc. 14a Corp. Juris, p. 1276.

The shipping of a small quantity of steel into this state was an act of interstate commerce, and is not to be construed as doing business in the state. Julius Kessler & Co. v. Perilloux (C. C.) 127 F. 1011; Buck Stove v. Vickers, 226 U. S. 205, 33 S. Ct. 41, 57 L. Ed. 189; Vaughn Co. v. Lighthouse, 64 App. Div.

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Bluebook (online)
17 F.2d 155, 1927 U.S. Dist. LEXIS 945, Counsel Stack Legal Research, https://law.counselstack.com/opinion/edward-sales-co-v-harris-structural-steel-co-med-1927.