Lincoln v. Fairfield-Nobel Co. , 76 Mich. App. 514 ( 1977 )

76 Mich. App. 514 (1977) 257 N.W.2d 148

LINCOLN
v.
FAIRFIELD-NOBEL COMPANY

Docket No. 27384.

Michigan Court of Appeals.

Decided July 6, 1977.

Dean A. Polzin, for plaintiff.

Smith & Brooker, P.C. (by Michael J. Huffman), for defendant.

Before: R.B. BURNS, P.J., and D.E. HOLBROOK and M.B. BREIGHNER,^[*] JJ.

D.E. HOLBROOK, J.

Plaintiff brought this action in his capacity as the administrator of the estates of Karen M. Lincoln and Nancy L. Lincoln, his daughters. On October 31, 1973, Michael Wood, a Michigan resident, drove his car across the center line of the road striking the car in which plaintiff's decedents were riding. Both Lincoln girls and Mr. Wood were killed in the accident. Plaintiff appeals as of right from a January 14, 1976 order of the trial court granting defendant's motion for accelerated and summary judgment on the ground that the court lacked personal jurisdiction over defendant, a New York corporation, and that defendant was not liable for the alleged negligence of Michael Wood on the basis of respondeat superior, because Mr. Wood, a salesman for defendant, was an independent contractor.

We hold that the trial court incorrectly decided that it lacked personal jurisdiction over defendant under the provisions of MCLA 600.711; MSA 27A.711, which provides in pertinent part:

"The existence of any of the following relationships between a corporation and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise general personal jurisdiction over such corporation and to enable such courts to render personal judgments against such corporation.

* * *

"(3) The carrying on of a continuous and systematic part of its general business within the state."

The facts in the instant case closely parallel those contained in International Shoe Co v Washington, 326 U.S. 310; 66 S. Ct. 154; 90 L. Ed. 95 (1945). In International Shoe, supra, the authority of the salesmen for the foreign corporation was limited to exhibiting their samples and soliciting orders from prospective buyers at prices and on terms fixed by the corporation. The duties of the salesman were confined to transmitting the orders to the corporate office for acceptance or rejection. Their merchandise was shipped directly to the purchasers. Moreover, none of the corporate salesmen had authority to enter into contracts or collect money. The Court held that those "operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just according to our traditional conception of fair play and substantial justice", to subject the foreign corporation to personal jurisdiction within the state. International Shoe, supra, 326 US at 320. Defendant in the instant case is in the same situation with respect to its salesman as was International Shoe Co. This Court has adopted the test employed in International Shoe. June v Vibra Screw Feeders, Inc, 6 Mich. App. 484; 149 NW2d 480 (1967), Wiles v B E Wallace Products Corp, 25 Mich. App. 300; 181 NW2d 323 (1970), Kircos v Goodyear Tire & Rubber Co, 70 Mich. App. 612; 247 NW2d 316 (1976).

The facts herein do reveal that defendant carried on a substantial, continuous and systematic part of its business in Michigan. The record reveals numerous mail order sales of clothing to several shops in Michigan over a period of years. Most of the orders were actively solicited by defendant's salesmen. Several salesmen had been operating successfully in Michigan for a period of time. Mr. Wood was paid $250 per week draw against a 4 percent commission on goods sold. Although his commissions had not reached this amount in the short time he represented defendant, his sales were increasing and approaching that figure. A former salesman had been so successful that he was promoted and moved to New York. Also, the salesmen conducted sales throughout the state, operated display booths at Cobo Hall on several occasions at shows, advertised and conducted a successful operation in Michigan. This record discloses that defendant does a continuous and systematic business in Michigan. This is sufficient. Kircos, supra. The representative percentage of defendant's business conducted in Michigan is not of great importance as long as the business actually done in Michigan is continuous and systematic. June, supra.^[1]

The trial court also found that plaintiff's actions were barred because Michael Wood was an independent contractor. First of all, one of plaintiff's contentions was that defendant was negligent in employing or hiring Mr. Wood, a person with a poor driving record and a history of intoxication, as a traveling salesman in a job that required extensive driving. Under this theory it would be unnecessary for plaintiff to show any agency relationship between Mr. Wood and defendant. This asserted negligence was negligence on the part of defendant itself, not on the part of its agent. See Eger v Helmar, 272 Mich. 513; 262 N.W. 298 (1935), 2 Restatement of Torts, 2d, § 411, pp 376-380.^[2]

Furthermore, the existence of a principal-agent relationship is generally for the jury to decide. Jackson v Goodman, 69 Mich. App. 225; 244 NW2d 423 (1976), Miskiewicz v Smolenski, 249 Mich. 63; 227 N.W. 789 (1929). We find the record conflicting and, therefore, plaintiff was entitled to have the jury resolve this factual dispute.

An agent is one who acts on behalf of another, particularly with regard to the conduct of business transactions. Saums v Parfet, 270 Mich. 165; 258 N.W. 235 (1935). An agent is often an employee, although agents are also classified with regard to the scope of their authority. Defendant argues that Mr. Wood was not a servant and therefore defendant was not responsible for Wood's acts. However, an agent does not have to be a servant. Saums, supra. 1 Restatement of the Law, Agency, 2d, § 14 N, p 80. Even though an agent is not necessarily a servant, a principal is still responsible for the acts of his agent if done within the scope of the agent's authority. Obviously, the term servant has broader significance and under the doctrine of respondeat superior, the principal is much more likely to be held accountable for the acts of the servant. Saums, supra.

Mr. Wood was given an exclusive territory in which he was assigned to solicit business for defendant. He was provided with job guidelines. Although he was not assigned regular hours or routine, the nature of his tasks did not lend themselves to such incidents of employment. The business cards of Mr. Wood circulated to defendant's customers seemed to indicate that Mr. Wood was an agent. Wood used company forms and materials and advertising was provided by the company. Furthermore, defendant shipped directly to the customers upon receipt of the orders obtained by Mr. Wood. Also, the customers contacted Wood when trouble occurred with defendant's products and deliveries and Wood attempted to iron out these difficulties. The fact that defendant attempted to use many of the incidents of an independent contractual relationship with regards to its salesmen is not determinative. The manner in which the parties designate the relationship is not controlling. If an act done by one person on behalf of another is in its essential nature one of agency, then he is an agent regardless of the title bestowed upon him. Van Pelt v Paull, 6 Mich. App. 618; 150 NW2d 185 (1967). The existence of the agency relationship, as well as the determination of whether Mr. Wood was acting within the scope of his authority, was a question for jury resolution.

The trial court erred in its determination that it did not have personal jurisdiction over defendant. Furthermore, the existence of an agency relationship, its scope and the possible negligence of defendant in hiring Mr. Wood constituted jury questions.

Reversed and remanded for trial on the merits. Costs to plaintiff.

NOTES

[*] Circuit judge, sitting on the Court of Appeals by assignment.

[1] See also, Republic Supply Corp v Lewyt Corp, 160 F Supp 949 (ED Mich, 1958), Raymond E Danto Associates, Inc v Arthur D Little, Inc, 316 F Supp 1350 (ED Mich, 1970). See also, 1971 Annual Survey of Michigan Law, Conflict of Laws, 18 Wayne L Rev 223 (1972).

[2] The burden of proof as to whether an employer exercised due care in the selection of a representative should be upon the plaintiff. See Mooney v Stainless, Inc, 338 F2d 127 (CA 6, 1964), cert den 381 U.S. 925; 85 S. Ct. 1561; 14 L. Ed. 2d 684 (1965). See also, Eger v Helmar, 272 Mich. 513; 262 N.W. 298 (1935), and Hudgens v Cook Industries, Inc, 521 P2d 813 (Okla, 1973).