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Casas v. Royal Bank of Canada

decided: June 2, 1980.


Before Pell, Bauer, Circuit Judges, and Hoffman, Senior District Judge.*fn*

Author: Bauer

Plaintiff-appellant Julio C. Casas appeals from the order of the district court dismissing his amended complaint against defendant-appellee The Royal Bank of Canada (Bank) for lack of in personam jurisdiction. The sole issue on appeal is whether the Bank is amenable to service of process within the State of Illinois, thereby subjecting it to the jurisdiction of the federal district court sitting in Illinois. We hold that a sufficient basis existed for the assertion of personal jurisdiction over the defendant in Illinois and accordingly reverse the judgment appealed from for the reasons set forth below.


On September 1, 1959, Juan Antonio Casas, father of the plaintiff and a Spanish national then residing in Cuba, drew a 36,000 pesos check against his account with The Royal Bank of Canada at its office in Havana, Cuba. The Bank certified the check, which Casas endorsed and subsequently had the endorsement notarized.*fn1 Juan Antonio Casas died on August 8, 1962 in Havana, Cuba. His family discovered the check and on December 3, 1962 presented it to the Bank for payment, but the Bank refused to honor the check. In 1965 the plaintiff, Julio C. Casas, was issued an exit permit from Cuba to this country and assumed residence in Florida. On March 1, 1977, the plaintiff was appointed personal representative of his father's estate by a Florida probate court and in that capacity he commenced the present action on May 24, 1977 in the Circuit Court of Cook County, Illinois, seeking to impose liability against the Bank for its failure to honor the certified check.*fn2

The defendant is a Canadian banking corporation and has its principal place of business in Montreal, Quebec. Service of process was made on the Bank at its Representative Office in Chicago, Illinois. The Bank removed the action on the basis of diversity of citizenship to the federal district court for the Northern District of Illinois, and subsequently moved to dismiss the amended complaint on the grounds that there was no basis for the exercise of personal jurisdiction and that the complaint was barred by the statute of limitations governing the plaintiff's cause of action on the instrument.

Relying on this Court's decision in Lindley v. St. Louis-San Francisco Ry. Co., 407 F.2d 639 (7th Cir. 1968), the district court granted the motion to dismiss for lack of in personam jurisdiction because it regarded the defendant's activities within the State of Illinois as mere solicitation of business and accordingly insufficient to establish personal jurisdiction over it in Illinois. From this adverse judgment, the plaintiff has appealed to this Court.


As noted above, the issue on appeal is whether the Bank is amenable to service of process in the State of Illinois and therefore subject to the jurisdiction of the federal court sitting in Illinois. Resolution of this question turns on the determination of whether the activities of the Bank's Representative Office in Chicago are sufficient, within the meaning of the applicable Illinois process statute and the due process clause of the Fifth Amendment, to require it to defend this action in Illinois. We therefore consider the pertinent state and federal court decisions construing these statutory and constitutional authorities.

The question whether a State may appropriately assert in personam jurisdiction over a foreign corporation has been the subject of frequent litigation. Recently, in Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977), the Supreme Court reaffirmed that the cornerstone of the evolving constitutional standard for acquiring personal jurisdiction over a foreign defendant is International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945). The standard prescribed by International Shoe was that in order to subject a foreign corporate defendant to in personam jurisdiction, due process only requires that the defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional concepts of fairness and substantial justice. Id. at 316, 66 S. Ct. at 158. Assuming due process is satisfied, the decision whether to accept or decline jurisdiction remains with the legislature and courts of the forum state. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 448, 72 S. Ct. 413, 419, 96 L. Ed. 485 (1952).

The statutory authority upon which service of process is predicated in this case is Section 13.3 of the Illinois Civil Practice Act, which provides that a foreign corporation may be served with process by leaving a copy with any agent found anywhere within the state.*fn3 Ill.Rev.Stat. ch. 110, ยง 13.3 (1977). There is no dispute that the Bank was duly served with process in accordance with the provisions of Section 13.3.*fn4 The plaintiff submits that by maintaining an office within Illinois and by virtue of the activities undertaken by the Bank in connection therewith, the defendant is properly subject to the jurisdiction of the Illinois state and federal courts. The defendant contends, however, that it is not amenable to process pursuant to Section 13.3 for two reasons. First the Bank argues that the Illinois doctrine of "mere solicitation," recognized by this Court in Lindley v. St. Louis-San Francisco Ry. Co., 407 F.2d 639 (7th Cir. 1968), precludes process on agents who are only soliciting business on behalf of a foreign defendant. Second, the Bank argues that its activities in Illinois are so insubstantial that requiring it to defend this suit in Illinois offends due process. We therefore turn to an analysis of the defendant's contacts with the forum state to determine whether the maintenance of this litigation would be inconsistent with the Illinois mere solicitation rule and the due process standard enunciated in International Shoe and its progeny.

The inquiry into the reasonableness of a state's jurisdiction over a foreign corporation in each case focuses not on a mechanical or quantitative analysis of the defendant's activities in the forum but on a qualitative evaluation of its contacts with the forum state. Shaffer v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569, 2579, 53 L. Ed. 2d 683 (1977). The record with respect to the quality and nature of the defendant's activities in Illinois consisted of the deposition of Donald D. Stewart taken by counsel for the plaintiff, and Stewart's affidavit filed by counsel for the defendant with its memorandum in support of its motions to dismiss. In the affidavit Mr. Stewart stated (1) that the Bank "does not now and has never transacted any banking business within the State of Illinois," and (2) that no Illinois employee of the Bank "has been or is authorized to accept any banking service or to enter into any contract on behalf of The Royal Bank of Canada in the State of Illinois." However, Mr. Stewart's deposition testimony contradicts these statements.

In his deposition, Stewart testified that he is 59 years of age and a Canadian citizen residing in a Chicago suburb. He has been employed by the Bank for 40 years, and has served in their Chicago office since 1962 under the title of "Representative." He also stated that the Bank operates 1500 offices worldwide, including five in the United States, and that since 1945 the Bank has maintained a Chicago office, which is currently staffed with six employees. The business transacted out of the Chicago office by these employees consists of the solicitation of new business, the expansion of present business and the retention of existing accounts.

Stewart further testified that, by his estimation, in excess of 1,000 accounts might be dealt with from the Chicago office and that these accounts are for customers located in a territory comprising nine midwestern states assigned to the Chicago office. The four male employees who staff the Chicago office, including himself, are referred to as "Representatives" and they travel throughout this nine-state region and to Canada on behalf of the Bank. The Chicago office maintains a file on each account or customer in the territory.

Some of the services that Stewart has performed from the Chicago office for customers of the Bank are arranging for loans, handling the documents related to the loans, facilitating the cashing of checks for Canadian customers of the Bank with a correspondent Chicago bank, and calling on customers in ...

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