Harrison v. . Corley

BaeNhill, J. The merits of plaintiff’s claim are not presented for review. The sole question posed for decision is whether the appellant, *186 a foreign corporation, has been brought into court by a valid service of process. If not, the court is without jurisdiction and the action as to it must be dismissed. The answer depends upon whether appellant, on 31 December, 1944, the day the alleged liability for damages was incurred, was engaged in business activities within this State. In the last analysis the question is one of due process of law under the Constitution of the United States, U. S. Const., Amend. 14 (1), which must be determined in harmony with the decisions of the Supreme Court of the United States. American Asphalt Roof Corp. v. Shankland, 60 A. L. R., 986, and cases cited. No all-embracing rule as to what is “doing business” has been formulated. The question is one of fact and must be determined largely according to the facts of each individual case rather than by the application of fixed, definite and precise rules. Timber Co. v. Insurance Co., 192 N. C., 115, 133 S. E., 424; C. T. H. Corporation v. Maxwell, Comr. of Revenue, 212 N. C., 803, 195 S. E., 36. The general rule is that when a foreign corporation transacts some substantial part of its ordinary business in a State it is doing business therein within the meaning of the due process clause of the Constitution so as to warrant the inference that the corporation has subjected itself to the local jurisdiction. Schoenith, Inc., v. Manufacturing Co., 220 N. C., 390, 17 S. E. (2d), 350; Commercial Trust v. Gaines, 193 N. C., 233, 136 S. E., 609; C. T. H. Corporation v. Maxwell, Comr. of Revenue, supra; Parris v. Fischer & Co., 219 N. C., 292, 13 S. E. (2d), 540; Peoples Tobacco Co. v. Am. Tobacco Co., 246 U. S., 79, 62 L. Ed., 587; International Shoe Co. v. Washington, 90 L. Ed., 109; Consolidated Textile Corp. v. Gregory, 289 U. S., 85, 77 L. Ed., 1047; St. Louis S. W. R. Co. v. Alexander, 227 U. S., 218, 57 L. Ed., 486; American Asphalt Roof Corp. v. Shankland, supra. Whether due process is satisfied must depend upon the quality and nature of the activities in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure, rather than upon a mechanical and quantitative appraisal thereof. International Shoe Co. v. Washington, supra. Applying these controlling general principles to the uncontroverted facts appearing on the face of this record, it clearly appears that appellant’s “presence” within the State on 31 December, 1944, is fully established. Perhaps no one circumstance is sufficient to sustain the finding of the court below. It is the combination of facts and circumstances en masse that makes out a case of “doing business” in this State. The appellant operates what is known as the associate base plan of Southeastern Air Service, Inc. *187 Prior to 15 September, 1944, Corley was employed by tbe company as a flight instructor at its air bases in states other than North Carolina. Shortly thereafter he began negotiation for leases upon airports located at Marion and Morganton in the State of North Carolina. He consulted with the company in respect thereto and the lease contracts were examined and approved by the company. Thereupon Corley and the company entered into the contract which appears of record “leasing” certain airplanes to Corley “to the mutual financial benefit and advantage of both the Company and the Operator.” It is apparent from a reading of the contract that in preparing it there was a studied and somewhat labored attempt to refute any suggestion of agency or employment which would impose any liability upon the company for the negligence or other dereliction of Corley and to give it the appearance of a simple lessor-lessee agreement. It was necessary, however, for the company to impose certain terms and conditions which tend to disclose the real nature of the agreement. Corley was required to install and carry out “The Associate Base Plan of Southeastern Air Service, Inc.” and “in carrying on his business on the airport herein referred to, will use and operate under the name of Southeastern Air Service, Inc., Associate Base.” In so doing he was required to devote his full time to said business and to make every effort to use the airplanes furnished to the maximum extent permissible, consistent with available business and safe operation of said airplanes. The company agreed to “furnish to the Operator the number and type of airplane which in its judgment and experience is most suitable to be used by the Operator in his flight operations on the airports,” and at its own expense to make major repairs to any component part of the aircraft when such repairs require the removal of said component parts from the aircraft; to provide “in the name of the Company and the Operator” as the interest of the parties shall appear, public liability insurance with limits of $20,000 and $40,000, passenger insurance and property damage insurance with a limit of $10,000. The company likewise agreed to make at its own expense “top overhauls of engines after approximately 250 hours of use and major overhauls of engines after approximately 500 hours of use” and to replace any faulty or worn part or parts or pay the cost of such replacements when made by the operator after authorization by the company. The company reserved the right “to ground any airplane which in its opinion at the time of any such inspection is not airworthy until such plane has been placed in an airworthy condition to the satisfaction of the Company,” and required Corley to “keep full and complete records on forms prescribed and furnished by the Company showing all flying time and other pertinent information concerning each of the airplanes *188 furnished.” All such records and forms were subject to inspection by the company at any and all times. Corley was required to “hold the Company harmless for any and all acts of the Operator, his agents, servants, and/or employees in the control and operation of said airport”; to comply with all applicable laws, rules, and regulations governing the operation of airplanes; to furnish surety bond in favor of the company for himself and each of his employees; to use in his commercial operations on the airport or airports only the plane or planes furnished by the company; to devote his full time to said business; to solicit for the company, on a commission basis, overhaul and repair work on all aircraft and engines based on the airport and from all other prospective customers for aircraft and engine work with whom he might come in contact, and “from time to time and whenever possible solicit such other business for the Company as the Company is able to handle,” on a commission basis. Corley was bound not to assign the contract and not to cancel or assign his lease on the airport without the written consent of the company. Should he decide to cancel or terminate his lease he was required to furnish the company a copy thereof and to give it the option of accepting an assignment or, if not assignable, to aid the company to obtain a lease on the airports upon the same terms and conditions under which Corley leased the same. The company agreed to appoint Corley dealer for whatever parts, supplies, material, and equipment it may from time to time distribute, on a commission basis, and hound Corley not to sell or solicit the sale of competitive products not handled by the company. A representative of the company in fact went to the office of Corley in North Carolina from time to time and checked the records he was required to keep and inspected the airplanes and equipment. In addition to the airport at Marion and the one at Morganton there were operated in North Carolina in the name of the corporate defendant two other airports, one at Wadesboro and one at Rockingham. Looking through the form to the substance, it is apparent more than the mere relationship of lessor-lessee was contemplated. If that was all that was intended, why should the company furnish liability insurance or require surety bonds of Corley’s “employees”; why such care to provide complete control over his activities and bind him to use only airplanes and equipment furnished by the lessor, and to “tie up” the leases granted in his name; why should the “lessor” require the “lessee” to operate in the name of the “lessor” and thus represent to the public at large that it was the owner and operator of the airports? These and other questions raised by a mere statement of the facts make the answer self-evident. Appellant was engaged in the business of operating in this *189 State a chain of airports in furtherance of the general scheme or plan of its organization, a part and parcel of the activities for which it was created. Thus the appellant, over a period of time, enjoyed the privilege of having four airports maintained and operated in this State in its name as a part of the plan of operation which forms the basis of the objectives for which it was created. In so doing it enjoyed the benefits and protection of the laws of this commonwealth. It thereby subjected itself to the jurisdiction of the courts of this State for the purpose of litigating liabilities created during its stay here. The provisions for the service of summons, G. S., 55-38, were a condition on which it was allowed to do business, accepted by it when it entered the State and engaged in business here without domesticating or appointing a process agent. Anderson v. Fidelity Co., 174 N. C., 417, 93 S. E., 948; International Shoe Co. v. Washington, supra. It cannot, by the simple expedient of closing shop and departing this jurisdiction, withdraw that assent so as to defeat a suit instituted on a cause of action which arose while it was engaged in business here. Fisher v. Insurance Co., 136 N. C., 217; Sisk v. Motor Freight, Inc., 222 N. C., 631, 24 S. E. (2d), 488; Highway Comm. v. Transportation Corp., 225 N. C., 198; International Shoe Co. v. Washington, supra, and cases cited; 45 A. L. R., 1442; Anno., p. 1447. The judgment below is Affirmed.