Weinstein v. Ajax Distributing Company

116 A.2d 580, 1955 D.C. App. LEXIS 261
CourtDistrict of Columbia Court of Appeals
DecidedAugust 26, 1955
Docket1661
StatusPublished
Cited by4 cases

This text of 116 A.2d 580 (Weinstein v. Ajax Distributing Company) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weinstein v. Ajax Distributing Company, 116 A.2d 580, 1955 D.C. App. LEXIS 261 (D.C. 1955).

Opinion

CAYTON, Chief Judge.

This appeal is from an order quashing service of process and vacating a default judgment. Appellants Weinstein had sued Ajax Distributing Company, a New Jersey corporation, charging that they had been induced by fraudulent misrepresentations to sign a contract and put up a deposit for the purchase of certain vending machines. The complaint which was filed in January 1955 demanded return of the deposit and also punitive damages. Service was made on Donald Chapman, as agent of defendant company on March 7, and though copies of the complaint and summons were in the hands of the president of defendant company on March 22, no answer or appearance was filed, and on March 29 plaintiff was granted a judgment by default.

A few days later defendant moved to set aside the default and to quash the service of process, the contention being that (a) defendant was not doing business in the District of Columbia and (b) Donald Chapman was not a person on whom process, against the defendant could properly be served. After taking testimony on the motion the trial judge ruled in favor of *581 ■defendant on both contentions, vacated the default judgment, and quashed the service of process.

Milton Weinstein testified that responding to an advertisement he and his brother met a man named Nick G. Greene who identified himself as a “representative” of the Ajax Company, and after some discussion produced a printed form of contract prepared by that company, and bearing its name in large type at the top; that the contract was then filled out, and called for sale to them by Ajax of 50 chewing gum vending machines and a supply of chewing gum for a total of $2,923, of which they were to pay half at signing and the other half at delivery; that the contract was signed by the Weinsteins and on behalf of Ajax by Greene as “Distributor”; that they gave Greene a check for $1,461.50, payable to the Ajax Company, and received from him a company-prepared “official receipt.” These papers were in evidence, as was a letter from the company signed by its president four days later, acknowledging and accepting the contract “placed with our distributor, Mr. Nick G. Greene,” and stating, “our location supervisor will contact you for the purpose of securing the locations as per terms of contract.” There-was also in evidence a letter from the company stating: “Please be advised that our Location Supervisor, Mr. D. Chapman, will be in Washington next week and will contact you upon his arrival.” It was this Mr. Chapman who was served with process in the suit brought by the Weinsteins on the basis of fraudulent misrepresentation.

Defendant offered no evidence except the affidavits it had filed in support of the motion. The principal affidavit was that of defendant’s president. (A second affidavit merely recited the general practice as to the status of a “location man.”) The gist of the affidavit was that defendant was not doing business in the city of Washington; that it has never maintained a place of business here; that no one in the District of Columbia was authorized to accept service of process; that Greene was not an employee of the corporation, but an independent salesman; and that Chapman is not an officer, agent or employee, but an independent contractor. The affidavit stated, however, that Chapman was sent here to secure locations and arrange for the installation of the 50 machines.

The question we consider first is whether the defendant corporation can be said to have been “doing business” in this jurisdiction'within the meaning of our Code 1951, § 13-103, which reads in part: “In actions against foreign corporations doing -business in the District all process may be served on the agent of such corporation or 'person conducting its business * * *. When a foreign corporation shall transact business in the District without having any place of business or resident agent therein, service upon any officer or agent or employee of such corporation in the District shall be effectual as to suits growing out of contracts entered into or to be performed, in whole or in part, in the District of Columbia * * *.” The question has been a much discussed and troublesome one. As in many other situations, the law on this subject has undergone an evolution. There has been a questioning and sometimes a discarding of old traditions. In earlier times the rule was that a non-resident defendant would not be subjected to our process unless it had been engaged in an established and continuing business activity here. This view was reflected in rulings that “mere solicitation” in the District did not confer jurisdiction on our courts. But this view later yielded to the “solicitation plus” test. Frene v. Louisville Cement Co., 77 U.S.App.D.C. 129, 134 F.2d 511, 516, 146 A.L.R. 926. There the United States Court of Appeals, speaking through Rutledge, J., (later á member of the Supreme Court) pointed out that developments in the law had cast doubt on the validity of the old traditions,, and that very little more than “mere solicitation” is required in order to establish that a corporation is present for jurisdictional purposes. In the course of the opinion it was said that while it was “generally” true that there should be more than merely casual or occasional acts not constituting a regular or continuous course of business, still “some casual or *582 even single acts done within the borders of the sovereignty may confer power to acquire jurisdiction of the person, provided .there is also reasonable provision for giving notice of the suit in accordance with minimal due process requirements.” Similar views were expressed in International Shoe Co. v. State of Washington, 326 U.S. 310, 56 S.Ct. 154, 90 L.Ed. 95. As was said in Mueller Brass Co. v. Alexander Milburn Co., 80 U.S.App.D.C. 274, 152 F.2d 142, 145, there is as yet no “basic concept of sufficient precision to yield certain results in all cases of this sort * * But we are satisfied that by any reasonable test it must be said that the Ajax Company made itself amenable to our jurisdiction. In Mr. Greene it had an authorized representative who was given power not only to solicit, but to negotiate and- contract with businessmen here. It had supplied him with its. printed form of contract and authorized him to sign as distributor; it had also authorized him to accept payment for its machines and to issue its form of official receipt. As was said in the Frene case, supra, 77 U.S.App. D.C. at page 134, 134 F.2d at page 516: “No business man would regard ‘selling,’ the ‘taking of orders,’ ‘solicitation’ as not ‘doing business.' The merchant or manufacturer considers these things the heart of business. It is perfectly possible, under the ‘mere solicitation-’ rule, for a foreign corporation to confine its entire market to a single jurisdiction, yet by carefully limiting its activities there to the soliciting phase, to force each of its customers having cause for legal redress to seek it in the foreign forum of incorporation.”

Ajax did even more to establish the jurisdictional pattern. In a letter accepting plaintiffs’ contract they said that “our location supervisor will contact you for the purpose of securing the locations as per terms of contract,” and followed this with another, letter identifying the supervisor as Mr.

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Bluebook (online)
116 A.2d 580, 1955 D.C. App. LEXIS 261, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weinstein-v-ajax-distributing-company-dc-1955.