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JACK O'DONNELL CHEVROLET, INC. v. SHANKLES

October 27, 1967

JACK O'DONNELL CHEVROLET, INC., PLAINTIFF,
v.
KEN SHANKLES AND FORT PAYNE BANK, DEFENDANTS.



The opinion of the court was delivered by: Marovitz, District Judge.

  MEMORANDUM OPINION

Defendant Fort Payne Bank's Motion to Dismiss

Plaintiff corporation, is an automobile dealership, incorporated in Delaware, and maintaining its principal place of business in Illinois. Between December 21, 1966, and February 18, 1967, plaintiff allegedly sold and delivered certain automobiles to defendant Ken Shankles in Illinois. Between those dates, Shankles executed several drafts totaling $14,475, upon the defendant Fort Payne Bank, an Alabama corporation, as purported payment for the autos. The drafts were forwarded in the regular course of business by the Mutual Bank of Chicago, the depositary bank, to the Fort Payne Bank for payment.

It is alleged that the latter received the drafts in the regular course of business, and returned them unpaid because of insufficient funds in the account of Ken Shankles, but did not do so until on or about March 23, 1967, and further, allegedly did not advise the plaintiff of its dishonor of the drafts as required by law.

The complaint is in four counts. Count I seeks recovery from Shankles for the transactions enumerated above. Count II charges the Fort Payne Bank with failing to give timely notice of dishonor to plaintiff as required by Section 4-302 of the Uniform Commercial Code of Alabama, and seeks recovery of $14,475. In Count III, plaintiff charges that the Fort Payne Bank negligently failed to notify the plaintiff of dishonor within a reasonable time, with the alleged result that plaintiff was "hindered and prevented from collecting and receiving the amount of said drafts from Ken Shankles at a time when said Shankles had sufficient assets and sufficient funds deposited with defendant Fort Payne Bank to properly pay said drafts." Finally, in Count IV, plaintiff charges that Shankles and the Fort Payne Bank conspired together to the end that the Bank would honor and pay only those drafts drawn by Shankles which Shankles or his agents gave authority to honor and pay, even though other items or drafts were properly payable. Plaintiff alleges that pursuant to the conspiracy, the defendants caused the drafts payable to plaintiff not to be honored or paid even though they were properly payable, while in the meantime agreeing to pay, or paying, other items drawn by Shankles payable to other payees, even though they were received some time after the drafts payable to plaintiff were presented for payment.

The Fort Payne Bank moves to quash the summons, served upon it at its Alabama facility, on the ground that the service is invalid because this court lacks in personam jurisdiction over the Bank.

Out of state service of process is permitted in Illinois under the provisions of Chap. 110, Sections 16 and 17(2), Ill.Rev.Stat.*fn1 Out of state service is permitted in the federal courts, under Rules 4(d)(7) and 4(e), when the law of the state in which the district court sits allows such service in its own courts.

Hence, extraterritorial service of process as such, is permissible in this court. However, if jurisdiction over the person of the defendant is lacking, service of summons upon him lacks a jurisdictional foundation upon which to stand, and must be quashed. Apparently, the plaintiff herein posits jurisdiction over the Fort Payne Bank upon its alleged commission of tortious acts within Illinois. The Bank relates that it has maintained no offices in Illinois, has sent no agents into this state, has transacted no business here, and has committed no tortious acts in Illinois. It thus contends that it cannot be subjected to in personam jurisdiction in this cause.

Section 17 of the Illinois Civil Practice Act, constitutes a statutory basis for jurisdiction over persons involved in certain isolated activities within the state. The statute provides: (in pertinent part)

"Sec. 17 Act submitting to jurisdiction — Process

  "(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 such person, and, if an individual, his
  personal representative, to the jurisdiction of the
  courts of this State as to any cause of action
  arising from the doing of any of such acts:
    (a) The transaction of any business within this
    State;
    (b) The commission of a tortious act within this
    State;
  "(3) Only causes of action arising from acts
  enumerated herein may be asserted against a defendant
  in an action in which jurisdiction over ...

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