McWhorter v. Anchor Serum Co.

72 F. Supp. 437, 1947 U.S. Dist. LEXIS 2532
CourtDistrict Court, W.D. Arkansas
DecidedJuly 21, 1947
DocketCivil Action 133
StatusPublished
Cited by8 cases

This text of 72 F. Supp. 437 (McWhorter v. Anchor Serum Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McWhorter v. Anchor Serum Co., 72 F. Supp. 437, 1947 U.S. Dist. LEXIS 2532 (W.D. Ark. 1947).

Opinion

JOHN E. MILLER, District Judge.

The plaintiff is a citizen and resident of Benton County, Arkansas. The defendant is a corporation, organized and existing under the laws of the State of Missouri, with its principal place of business in St. Joseph, Buchanan County, Missouri, and is engaged in the manufacture and sale of anti-hog-cholera serum, bacterins and other animal biologicals. Service of summons on the defendant was had in conformity with the terms of Act No. 347 of the Acts of The General Assembly of Arkansas 1947. The defendant has filed a motion to quash service of process on the ground that the service had was insufficient to give the Court jurisdiction of the person of the defendant.

The facts, as reflected by the complaint and deposition of the plaintiff, are as follows. In December, 1946, Mr. G. D. Scott, a representative of' the defendant company, approached the plaintiff, W. T. Mc-Whorter, at his farm in Benton County, Arkansas, in regard to the employment of the plaintiff by the defendant company. The. terms of employment, discussed at that time, were that the defendant would pay the plaintiff $250 a month, with a weekly expense account up to $75, and furnish him with a car. The plaintiff was to be classified as “Veterinary Representative” of the company and it would be his job to call on druggists and dealers with a view to selling the products of the defendant company. This employment was accepted by the plaintiff a short time later (shortly before Christmas, 1946) and after attending a preparatory school, he entered upon his duties around the middle of January, 1947. When the plaintiff secured an order from a druggist dealer in Arkansas, that order was sent to St. Joseph, Missouri, where it was filled and from there shipped directly to the dealer in Arkansas. During the tenure of the plaintiff’s employment there was not, at any time, any stock of the defendant company located in the State of Arkansas. At various times the orders were filled by wholesalers, of the defendant company, in Kansas City, Missouri and in Fort Worth, Texas, but in all cases the stock was shipped into Arkansas from another state and directly to the purchasing dealer.

The question for decision here is whether or not the service had upon the defendant company was sufficient to give this Court jurisdiction over the person of the defendant. Diversity of citizenship and the requisite jurisdictional amount exist.

Act 347, Acts of Arkansas 1947, provides that: “Any non-resident person, firm, partnership, general or limited, or any corporation not qualified under the Constitution and Laws of this State as to doing business herein, zvho shall do any business or perform any character of work or service in this State shall, by the doing of such business or the performing of such work, or services, be deemed to have appointed the Secretary of State, or his successor or successors in office, to be the true and lawful attorney or agent of such non-resident, upon whom process may be served in any action accrued or accruing from the doing of such business, or the performing of such work, or service, or as an incident thereto by any such nonresident, or his, its or their agent, servant or employee.” The act also stipulates that notice of such service (upon the Secretary of State) and a copy of the process shall be sent by registered mail by the plaintiff to the defendant at his last known address. The plaintiff has complied with this Act and asserts that by virtue of Rule 4(d) (7), Federal Rules of Civil Pro *439 cedure, 28 U.S.C.A. following section 723c, the service had in this case gives the Court the necessary jurisdiction. Rule 4(d) (7) provides that service in the Federal Court shall be sufficient if made in the manner prescribed by any statute of the United States or in the manner prescribed by the law of the state in which the service is made. Since there is no federal statute covering this type of situation, the state statute and its relation to Rule 4(d) (7) must be examined.

The principal limitation upon the application of a state statute under Rule 4(d) (7) is the constitutionality of the statute. Before any state can subject a foreign corporation to the jurisdiction of that state, the corporation must have expressly consented to such jurisdiction or must have done sufficient acts to constitute a submission to such jurisdiction. International Harvester Company of America v. Commonwealth of Kentucky, 1914, 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479; Restatement, Conflict of Laws, sec. 89. In the case of foreign corporations these acts normally take the form of “doing business.” It may be said that the “doing of business” by a foreign corporation is the minimum of acts that will subject that corporation to the jurisdiction of a state. Therefore, if a state statute goes below this minimum in granting the state jurisdiction, that statute is unconstitutional as a violation of due process of law. 14th Amendment to the United States Constitution. This result has been reached in a case arising in Arkansas. Cella Commission Co. v. Bohlinger, 8 Cir., 1906, 147 F. 419, 8 L.R.A.,N.S., 537. In the Bohlin-ger case the Arkansas Statute under interpretation was not limited to corporations doing business in Arkansas, and even though the corporation there was actually doing business, the service under the unconstitutional statute was held to be void. So, if Act 347 sets forth a standard below the constitutional minimum, it is invalid and necessarily Rule 4(d) (7) could be of no assistance to the plaintiff in this case. However, a statute is presumed to be constitutional and the Arkansas Legislature in passing this Act, and in using the language contained therein, must have intended that it apply only when the foreign corporation is “doing business” (as that expression has been defined by court decisions) in the State of Arkansas. If it be found that the defendant is not “doing business” then again, Rule 4(d) (7) can be of no assistance to the plaintiff since there would be no appropriate state law under which service could be had. Hedrick v. Canadian Pacific Railroad Co., D.C.Ohio, 1939, 28 F.Supp. 257; Moore’s Federal Practice, Vol. 1, p. 315. Was the defendant doing business in Arkansas?

The often cited test for “doing business”, as expressed by Mr. Justice Brandéis of the United States Supreme Court, is: “A foreign corporation is amenable to process to enforce a personal liability, in the absence of consent, only if it is doing business within the state in such manner and to such extent as to warrant the inference that it is present there.” Philadelphia & Reading Railway Company v. McKibbin, 1917, 243 U.S. 264, 37 S.Ct. 280, 61 L.Ed. 710. In factual situations similar to the one before the court the decisions have set out two categories: (1) the mere soliciting agent, and (2) the soliciting agent plus. It may, be generally stated that if the corporation maintains a mere soliciting agent in the state, that corporation is not “doing business” for purposes of service under an appropriate state statute. International Harvester Company of America v. Commonwealth of Kentucky, supra; Roark v. American Distilling Co., 8 Cir., 1938, 97 F.2d 297; Hinchcliffe Motors, Inc., v. Willys-Overland Motors, Inc., D.C.Mass.1939, 30 F.Supp. 580; H. J. Heinz Co. v. Duke, 1938, 196 Ark.

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Cite This Page — Counsel Stack

Bluebook (online)
72 F. Supp. 437, 1947 U.S. Dist. LEXIS 2532, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcwhorter-v-anchor-serum-co-arwd-1947.