William R. Andrews Associates v. Sodibar Systems of D. C., Inc.
N.C. Ct. App.3/17/1976
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Full Opinion
PARKER, Judge. The sole question presented is whether the court acquired in personam jurisdiction over defendant corporation under our âlong armâ statute, G.S. 1-75.1 et seq. Plaintiff contends that the North Carolina court acquired such jurisdiction by virtue of *667 G.S. 1-75.4 (5) d which, provides that a court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4 (j) of the Rules of Civil Procedure in any action which: âd. Relates to goods, documents of title, or other things of value shipped from this State by the plaintiff to the defendant on his order or direction.â Defendant, in contesting the in personam jurisdiction of the North Carolina courts, makes two contentions. First, defendant contends that there is no indication in the record that the defendant corporation ever ordered or directed plaintiff to ship any goods anywhere, and therefore G.S. 1-75.4 (5) d does not apply. Second, defendant contends that the imposition of in personam jurisdiction over this defendant by the North Carolina courts under the facts of this case is unconstitutional in that it would violate defendantâs due process rights under the Federal Constitution. As to defendantâs first contention, plaintiff alleged in paragraph VI of the complaint that on or about 12 November 1973 âon the order and direction of defendant, plaintiff shipped from his warehouse near Durham, North Carolina, and delivered to the defendant at his place of businessâ the 150 new aluminum CO2 cylinders âas agreed in the contract.â No responsive pleading has been filed, and nothing in the present record controverts the above quoted allegations of the complaint. The averment in the affidavit made by defendantâs president that âMr. Andrews arranged with the defendant company to ship to the defendant company an additional 150 aluminum cylindersâ is not inconsistent with the fact that the shipment may have been made on defendantâs order or direction, and nothing elsewhere in the affidavit controverts the quoted.portion of paragraph VI of the complaint. The trial court has found that this action relates to goods shipped from North Carolina by the plaintiff to the defendant at defendantâs order and direction. That finding is supported by the uncontroverted allegations in plaintiffâs complaint. Accordingly, on the present record we find G.S. 1-75.4 (5) d applicable to this case, and we are thus brought to defendantâs second contention, that to apply the statute to impose in personam jurisdiction upon defendant under the facts of this case would violate defendantâs rights to due process under the Constitution of the United States. *668 In the context of defendantâs constitutional, contentions, âdue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimal contacts with it such that the maintenance of the suit does not offend âtraditional notions of fair play and substantial justice.â â Interna tional Shoe Co. v. Washington, 326 U.S. 310, 316 , 90 L.Ed. 95, 102 , 66 S.Ct. 154, 158 (1945). The existence of minimum contacts must be determined upon the particular facts of each case. Chadbourn, Inc. v. Katz, 285 N.C. 700 , 208 S.E. 2d 676 (1974). What contacts did defendant in the present case have with the State of North Carolina? It maintained no office here, sent no salesman, agent, or employee here, solicited no business here, advertised in no media coming into this State, and had no contact of any nature with any person, firm, or corporation of the State of North Carolina excepting only its transactions with the plaintiff herein. With regard to those transactions, the facts shown by this record, as disclosed by the allegations in plaintiffâs complaint and in the affidavit of defendantâs president, are that on two occasions, once in late July and once in early November 1973, Mr. William R. Andrews, representing plaintiff, visited at defendantâs office in Washington, D. C., where he solicited orders for aluminum CO2 cylinders. As a result of the first visit he obtained an order from defendant for 250 cylinders at a price of $27.55 each delivered to defendantâs warehouse, and those cylinders were shipped by Andrews to defendant on or about 2 August 1973. Apparently no controversy exists between the parties with respect to those 250 cylinders. At the time of Andrewsâs second visit to defendantâs office in Washington, D. C., on or about 1 November 1973, he offered to sell to defendant aluminum CO2 cylinders at a unit price of $30.75. Defendant accepted this offer and placed his order for 150 of said cylinders. As agreed in the contract resulting from this offer and acceptance, plaintiff shipped from his warehouse near Durham, North Carolina, and delivered to the defendant at its place of business in Washington, D. C., the 150 new aluminum cylinders which are the subject of this suit. This shipment was arranged for by plaintiff with Ryder Truck Lines, Inc., and plaintiff also arranged with Ryder Truck Lines, Inc. to pick up from defendant in Washington, D. C., certain used cylinders for shipment to Florida. Upon analysis of the foregoing facts, it is apparent that the only contact defendant has ever had with the State of *669 North Carolina is that on two occasions defendant entered into contracts in Washington, D. C. with a resident of North Carolina for delivery and receipt of certain goods in Washington, D. C. These contracts were negotiated, agreed to, and performed outside of North Carolina, and the only activity in North Carolina which resulted from them was that on two occasions plaintiff, not the defendant, made shipments of goods from plaintiffâs warehouse in North Carolina. We have found no case holding âcontactsâ so meager as here disclosed sufficient to sustain in personam jurisdiction in the forum State. See: Annot., 20 A.L.R. 3rd 1201 (1968). Among the cases relied upon by plaintiff, McGee v. International Life Ins. Co., 355 U.S. 220 , 2 L.Ed. 2d 223 , 78 S.Ct. 199 (1957) states that it is sufficient for the purposes of due process that the suit be based on a contract âwhich had' substantial connection withâ the forum State, and the Supreme Court, in finding such a substantial connection in that case, pointed out that the contract of life insurance there sued upon was delivered in the forum State, the premiums were mailed from there, and the insured was a resident of that State when he died. No such continuing contractual relationship connecting defendant with the forum State is shown in the present case. Byham v. Home Corp., 265 N.C. 50 , 143 S.E. 2d 225 (1965) involved a franchise agreement for operating a restaurant business under a chain trade name in a specified territory in this State. The nonresident defendant reserved the right to select the location, set up the business, establish procedures during the opening week, control policy, maintain general supervision throughout the life of the franchise, inspect the books, premises and operations, control all of the forms and details of the business, furnish supplies and equipment, and control advertising. The Court held there were sufficient contacts with this State by the nonresident defendant to support in personam jurisdiction over defendant in North Carolina. No such extensive contacts have been shown in the present case. Chadbourn v. Katz, supra, was concerned with an action for breach of a contract for sale of real property located in North Carolina. Plaintiffâs action in the present case does not involve real property in this State. For the courts of this State to exercise in personam jurisdiction over defendant in the present case under the facts disclosed by the record now before us would, in our opinion, violate *670 defendantâs constitutional rights to due process. Accordingly, the judgment appealed from is Reversed. Judges Britt and Clark concur.
Case Information
- Court
- N.C. Ct. App.
- Decision Date
- March 17, 1976
- Status
- Precedential