190 A.2d 236 | Conn. Super. Ct. | 1963
The subject of controversy raised by this plea in abatement is the application to the instant *292
facts of § 33-411 of the General Statutes of Connecticut, entitled "Service of process on foreign corporation." This is part of the new Stock Corporation Act, adopted by the 1959 session of the General Assembly effective 1 January 1961. It was amended by §§ 90 and 91 of Public Act No. 327 of the 1961 session, effective 1 October of the latter year. No case affecting the present issue has yet been decided by any of the courts of this state,Nevins v. Revlon, Inc.,
The following facts are found. The defendant is a New Jersey corporation engaged in the manufacture and sale of specification material products. It buys its raw materials from suppliers such as The Bethlehem Steel Company and The Republic Steel Company and serves customers constituting a worldwide trade. One of its employees, one Lehmacker, is assigned to the six New England states, in which he visits potential customers. He lives in the state of Connecticut, although not required to do so in the course of his employment by the company. The latter has seven different "Enterprise" telephone numbers, each in a different city in this state. It advertises in the yellow pages of the telephone directories in the cities where the "Enterprise" numbers are listed. The defendant prepares and distributes to potential customers a stock list which advises them of the products it is prepared to sell and is intended for use by them in ordering. It accepts orders at Linden, New Jersey, and ships the goods to its customers. It has been selling its products in Connecticut for about fourteen years. Its customers are worldwide, and it has about one hundred of them in this state, examples being Pratt and Whitney Aircraft, Hamilton Standard Propeller, United Aircraft and Sikorsky Aircraft. Its *293 gross sales in Connecticut in 1961 amounted to about one-half a million dollars, and the indications are that its gross in 1962 will equal the same.
Lehmacker's function is that only of a salesman. He makes business calls on various companies and takes their appropriate officers to golf, luncheons and dinners in connection with the company's business. He has a car which he uses in the pursuit of his employment, and the company reimburses him for travel expenses at the rate of $.08 a mile. He occasionally calls in orders directly to the company, although they are usually transmitted by purchase orders directly to the defendant by the customer. His job is to improve customer relations, and in addition to visiting and entertaining customers he discusses complaints with them. Other customers of the defendant in this state include the National Aeronautic Company, which has done business with the defendant for about twelve years. It has been called on by Lehmacker, who has invited its purchasing agent out socially, which is a recognized form of solicitation. The defendant's agent, Lehmacker, has continually solicited this company as well as others in Connecticut. The Fenn Manufacturing Company receives visitations from Lehmacker about every eight or nine weeks. He solicits it for orders and entertains its officers at lunch and golf. Complaints of the company are discussed with him. These patterns of conduct by the defendant are the same as those on the part of other industries similar to the defendant.
The plaintiff is a Connecticut corporation with its principal place of business in this state. It is a small company whose gross annual sales are about $150,000 to $200,000. There are quite a few groups of this size in Connecticut engaged in making aircraft and missile parts. The purchases made from *294 the defendant by the plaintiff are of a general pattern. The plaintiff is a small company and placed the following orders with the defendant: 1955, $5; 1957, $59; 1960, $252.87. It too is solicited by Lehmacker, and Lehmacker's activities as a salesman as to it are typical of those engaged in by similar businesses. The product ordered from the defendant by the plaintiff was consumed at its factory in New Britain, Connecticut, in the course of its manufacturing activities. The basis of this action is false and fraudulent misrepresentations and warranties to the plaintiff by the defendant concerning the product so ordered and consumed.
The defendant's initial point involves a technical matter, namely, that jurisdiction over it can be asserted only under subsection (c) of § 33-411 and that therefore subsection (d) of the same section applies. "In any action brought under subsection (b) or (c) of this section or under subsection (e) of section 33-371, the secretary of the state shall be deemed the agent and attorney of the corporation in this state and service of process on such corporation shall be made as provided in subsection (a) of this section, except that the secretary of the state shall address the copy thereof to the corporation at its office as shown in the official registry of the state of its incorporation, which address shall be set forth in the writ or other process." § 33-411 (d). The address is not set forth in the writ as required, although a purported amendment was filed after the original service was made. Defendant asserts that this is a jurisdictional defect and hence not curable by amendment. Its citations do not support its contention. In both Hyde v.Richard,
We hold that the failure to include the address in the writ is embraced within the intendment of §
The next point to be discussed is whether the defendant was amenable to service under § 33-411 (b), which reads: "Every foreign corporation which transacts business in this state in violation of section
Examination of the recent statutory trend on the subject reveals it to be in the direction of expanding jurisdiction over foreign corporations. McGee v.International Life Ins. Co.,
In the 1961 session of the General Assembly, § 92 of Public Act No. 327, "An Act concerning Technical Amendments to the Stock Corporation Act," deleted *298
from § 52-59a the references to corporations. This, however, is not to be construed as reducing the scope of the jurisdiction obviously intended by the legislature. The amendment was, on the contrary, patently a mere technical correction of the overlapping and duplication of these sections. "Revisers are presumed not to change the law." State v.DeGennaro,
The recital of facts above is conclusive that the defendant "transacts business in this state"; § 33-411 (b); and it is so found. As the plea in abatement admits, it is not qualified to do business in Connecticut. It is therefore clearly "in violation of section . . . 33-396" and hence "subject to suit in this state" upon this cause of action, which arises out of such business. § 33-411 (b).
Such a construction does not bring the application of § 33-411 to the facts in this case under that unconstitutionality which the defendant urges upon us. It violates neither the fourteenth amendment to the constitution of the United States nor § 12 of article
It is a sufficient comment on the doctrines of such previous cases in this state construing the phrase "transacting business" as Alfred M. Best Co. v. *300 Goldstein,
There has been some discussion in recent federal cases concerning the Connecticut statutes referred to above. "There is no doubt that Connecticut might have extended its power over foreign corporations further than it has chosen to under § 33-411. The test of jurisdiction is no longer based on a fictional `presence' arising from `transacting' or `doing business,'McGee v. International Life Insurance Co.,
The following passages from Winchester ElectronicsCorporation v. General Products Corporation,
This view of the case renders academic the defendant's other attacks upon this service. However, in the interest of avoiding the possible necessity of further litigation, we refer to them. Together, they are based on the contention that subsection (c) of § 33-411 cannot be applied here. It reads: "Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: (1) Out of any contract made in this state or to be performed in this state; or (2) out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state; or (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers; or (4) out of tortious conduct in this state, whether arising out of repeated activity or single acts, and whether arising out of misfeasance *302 or nonfeasance." We cannot agree with defendant's superficial treatment of (1) and (4). The pleadings and facts in the case are such as to permit the possible conclusion that this contract was to be performed by delivery in this state; (1); and that the tortious conduct here set out, namely misrepresentation, took place in this state. (4). The material purchased by this plaintiff certainly constituted business solicited in this state by mail or otherwise, and the defendant has repeatedly so solicited business here. (2). Defendant concedes that (3) applies, as it must because of the expectation that the goods were to be used or consumed here and the realization of that expectation. Neither this section nor any of its subdivisions invite the constitutional animadversion the defendant would cast upon them. We hold that the decisions above cited envision the acquisition of jurisdiction in this case under this law.
"It is evident that the criteria by which we mark the boundary line between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has seen fit to procure through its agents in another state, is a little more or a little less. St. Louis S.W.R. Co. v. Alexander . . . [
The plea in abatement is dismissed.