The opinion of the court was delivered by: Campbell, District Judge.
Plaintiff, John H. Haas, has filed this action against
defendants Fancher Furniture Company, a New York corporation,
Standard Chair Company, a Pennsylvania Corporation, and C.L.
Erickson, as president and secretary of defendant corporations,
alleging breach of an employment contract. The contract was
entered into in Chicago, Illinois, and it is alleged that by its
terms defendants agreed to employ plaintiff as general sales
manager in Illinois. Jurisdiction is based on diversity of
Fancher Furniture Company and Standard Chair Company have filed
a motion to quash service of summons. Defendant, C. Leonard
Erickson has filed a motion to be dismissed from this action in
the event that it be held that service of summons on defendant
corporations is invalid.
The affidavits filed by Fancher Furniture Company and Standard
Chair Company in support of their motion to quash service of
summons may be summarized as follows:
No Fancher Furniture Company products are manufactured in
Illinois, and no inventories of merchandise are maintained in
this State. All purchases by Illinois customers are shipped
f.o.b. from Salamanca, New York, to the Chicago, Illinois, area.
Billings for merchandise sold in Illinois are mailed direct from
Salamanca, New York, to the customer, and payment is made direct
to Salamanca, New York, or to a factor in New York, New York. All
matters pertaining to warranty, credit or collection of accounts
are handled by Fancher at Salamanca, New York. Fancher maintains
no bank accounts in Illinois, and owns no real estate situated in
Fancher has an agreement with George Hildreth, who is engaged
in the solicitation of orders for the purchase of merchandise and
the promotion of good will in Illinois. Under the terms of the
agreement, Fancher does not direct or in any way control the
conduct of George Hildreth's solicitation of orders. It is not
bound by orders solicited by George Hildreth until the order has
been accepted by it in writing in Salamanca, New York. George
Hildreth has no authority to create obligations, adjust or
collect accounts receivable, or authorize a return of merchandise
on behalf of Fancher. George Hildreth is not paid a salary, but
receives compensation in the form of commissions.
The affidavit filed by Standard Chair Company sets forth the
same set of facts except that it is located in Union City,
Pennsylvania. Standard has an agreement with William Kauss which
is the same as that which Fancher Furniture Company has with
Service of summons upon Fancher Furniture Company and Standard
Chair Company was made on September 21, 1956, by serving George
Hildreth and William Kauss and again on January 10, 1957, by
serving C.L. Erickson, who was visiting Chicago, as president and
secretary of the two corporations.
It is unnecessary here to decide whether service upon defendant
corporations was effected by delivering copies of the summons to
George Hildreth and William Kauss. It is clear that the
subsequent delivery of the summons to C.L. Erickson was
"delivery * * * to an officer" of the defendant corporations
within the meaning of Rule 4(d)(3) Federal Rules of Civil
Procedure, 28 U.S.C.A.
Defendant corporations contend, however, that this court does
not have jurisdiction over their corporate "persons" because they
are not "doing business" within this State. They contend that, in
a diversity case, the question of personal jurisdiction of this
court must be resolved by reference to the law of this State.
While the lower Federal courts have not been in agreement on this
point (see Kenny v. Alaska Airlines, D.C., 132 F. Supp. 838), the
Court of Appeals, Seventh Circuit, has consistently held that
State law is applicable to this issue in such cases. Riverbank
Laboratories v. Hardwood Products Corp., 220 F.2d 465, 467;
Roberts v. Evans Case Co., 218 F.2d 893. It is true that its
decision in Riverbank Laboratories was reversed by the Supreme
Court, 350 U.S. 1003, 76 S.Ct. 648, 100 L.Ed. 866, saying "The
Court is of the opinion that the District Court correctly found
there was proper service * * *."
I do not think that, by this memorandum decision, the Supreme
Court can be taken to have overruled or distinguished Angel v.
Bullington, 330 U.S. 183, 67 S.Ct. 657, 91 L.Ed. 832, and Woods
v. Interstate Realty Co., 337 U.S. 535, 69 S.Ct. 1235, 93 L.Ed.
1524, which have hitherto been relied on for the view that State
law is applicable to the question of personal jurisdiction in
diversity cases (see contra K. Shapiro, Inc., v. New York Central
Railroad Co., D.C., 152 F. Supp. 722, 726).
In this case, however, the question of applicable law is
immaterial, for the jurisdiction of this court is sustained both
by Federal and State law. It is clearly sustained by Federal law,
Travelers Health Ass'n v. Com. of Virginia, 339 U.S. 643, 70
S.Ct. 927, 94 L.Ed. 1154; Scholnik v. National Airlines, 6 Cir.,
219 F.2d 115; K. Shapiro, Inc., v. New York Central Railroad Co.,
D.C., 152 F. Supp. 722. Plaintiff's affidavit filed with this
Court discloses that defendant corporations have been engaged in
the solicitation of business in this State for over ten years and
that they maintain offices in Chicago, Illinois, for this
purpose, with telephone listings under their names.
Defendant corporations refer, on the question of Illinois law,
to Bull & Co. v. Boston & Maine R.R. Co., 344 Ill. 11,
175 N.E. 837; Booz v. Texas & Pacific Ry. Co., 250 Ill. 376, 95 N.E. 460,
and the decisions of the courts of this circuit in Roberts v.
Evans Case Co., 7 Cir., 218 F.2d 893; Canvas Fabricators, Inc.,
v. William E. Hooper & Sons Co., 7 Cir., 199 F.2d 485; and
Olshansky v. Thyer Mfg. Corporation, D.C., 13 F.R.D. 227. Those
cases were all decided prior to the enactment of sections 16 and
17 of the Illinois Civil Practice Act, Ill.Rev.Stat. 1957, Chap.
110 par. 16 and 17.
So far as material here, section 17 provides:
"(1) Any person, whether or not a citizen or
resident of this State, who in person or through an
agent does any of the acts hereinafter enumerated,
thereby submits said person, and, if an individual,
his personal representative, to the jurisdiction of
the courts of this ...