State Ex Rel. Columbia Broadcasting Co. v. Superior Court , 1 Wash. 2d 379 ( 1939 )

¹ Reported in 96 P.2d 248. This is an original application in this court for a writ of prohibition directed to the superior court of King county to prevent it from taking jurisdiction of the relator, Columbia Broadcasting Company, referred to herein as the Columbia, in an action in which it is one of the parties defendant.

The Columbia Broadcasting Company is a corporation organized under the laws of the state of New York. The Queen City Broadcasting Company, which is the other defendant in the action, is a corporation organized under the laws of this state and operates a radio broadcasting station known as KIRO, at Seattle. The Waldo Hospital Association is a corporation, also organized under the laws of this state. The Columbia was engaged, and is now engaged, in the business of operating a radio broadcasting network, which consists of the originating and furnishing of programs to radio stations of the network over program transmission lines. The Queen City is one of the stations in the network.

This network comprises approximately one hundred and ten radio stations, located in forty-five states, the district of Columbia, and the territority of Hawaii, and, in addition, certain stations located in some of the provinces of the Dominion of Canada. Of these, the Columbia operates, directly, nine. Stations not owned or operated by the Columbia are referred to as affiliated stations. Programs are produced and originated in the Columbia's studio at its principal place of business in the state of New York. A local station may, at times, prepare programs and send them to other affiliated stations.

The stations not owned or operated directly by the Columbia are operated under a written contract, and that is the way that the Queen City is operated. The contract made by this station was entered into February 24, 1937. This contract is altogether too long to be set out in full. Only a few of its principal provisions will be referred to.

The contract recites that the Columbia is engaged in furnishing programs to radio broadcasting stations composing a part of the chain known as the Columbia broadcasting system; that the Columbia desires to use the facilities of the station as part of its chain; that the Queen City agrees to furnish the facilities of its station to the Columbia for commercial purposes; that the Columbia will be entitled to the exclusive use of the station's facilities during any hour or fraction of an hour in which, pursuant to the agreement, the facilities are furnished to the Columbia; that, so long as the Queen City operates with a certain power, the Columbia will be entitled to the use of the station's facilities for its commercial programs, for which it agrees to pay; that the Columbia will sell broadcasting time over the station; that, if it increases the rate of payment at which it sells broadcasting time over the station, it will increase the rate of payment by the Columbia to the station; that, if the Columbia shall change the rate per hour at which it sells broadcasting time over the station for network commercial programs, it will pay an increased rate to the station for the use of its facilities; that the station shall obtain as much publicity as possible for the Columbia broadcasting system and shall use therefor such publication notices as shall be released by Columbia from time to time, as well as any available and favorable local publicity. This recital is a mere summary of the provisions of the contract which seem to us to be essential to an understanding of the relations between the parties.

The Waldo Hospital Association brought an action in the superior court and, as indicated, made the Columbia a party thereto. This action was for the purpose of recovering damages for a broadcast originating at the St. Louis affiliated station and broadcast over KIRO, which the hospital claims was defamatory. Jurisdiction was sought to be obtained over the Columbia by serving a summons and a copy of the complaint upon the general manager of station KIRO.

The question is whether that service was good, and this, in turn, depends upon whether, by reason of the terms of the contract referred to, the Columbia was doing business in this state and KIRO was its agent.

[1, 2] Rem. Rev. Stat., § 226 [P.C. § 8438], provides that:

"The summons shall be served by delivering a copy thereof, as follows: — . . .

"9. If the suit be against a foreign corporation or nonresident. . . doing business within this state, to any agent, . . . thereof; . . ."

The question, then, arises whether the Columbia, by reason of its contractual relations with the Queen City, was doing business in this state. The words of the statute, "any agent," were intended by the legislature to have a broad meaning, and must be liberally construed to effectuate the legislative intent. While they may not include a day laborer or an employee who has no authority to represent the corporation in any way other than to discharge his daily task, they must be held to include all agents who represent the corporation in either a general or a limited capacity. Barrett Mfg. Co. v. Kennedy,73 Wash. 503, 131 P. 1161; Pacific Typesetting Co. v. I.T.U.,125 Wash. 273, 216 P. 358, 32 A.L.R. 767.

The word "business" is a comprehensive term, and embraces everything about which a person can be employed. It is that which occupies the time, attention, and labor of men for the purpose of a livelihood or profit. Bankers Holding Corp. v. Maybury,161 Wash. 681, 297 P. 740, 75 A.L.R. 1237; Flint v. Stone TracyCo., 220 U.S. 107, 55 L. Ed. 389, 31 S. Ct. 342, Ann. Cas. 1912B, 1312. The general rule is that the business must be of such a nature and character as to warrant the inference that the corporation has subjected itself to the local jurisdiction, and is, by its duly authorized officers or agents, present within the state or district where the service is attempted. Philadelphia R.R. Co. v. McKibbin, 243 U.S. 264, 61 L. Ed. 710, 37 S. Ct. 280;People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79,62 L. Ed. 587, 38 S. Ct. 233, Ann. Cas. 1918C, 537.

Applying these rules to the facts in the present case, we are of the opinion that the Columbia was doing business in this state, and that the agreement under which it was operating was, in effect, a leasing of time from the Queen City. To state it otherwise, the Queen City was the lessor, and the Columbia, the lessee, and the subject matter of the lease was time for which the Columbia agreed to pay. If this be the correct construction of the contract, the Queen City would, in effect, be the agent of the Columbia. It being the agent, service of summons upon the general manager of that agent would confer jurisdiction.Georgia Power Light Co. v. Wilson, 48 Ga. App. 764, 173 S.E. 220.

In addition to what has been said, we desire to call attention to the case of Fisher's Blend Station v. Tax Commission,297 U.S. 650, 80 L. Ed. 956, 56 S. Ct. 608. In that case, the Fisher's Blend Station owned and operated two radio stations in this state, and over these stations it broadcast programs which extended beyond the state lines. The state tax commission sought to enforce the occupation tax, measured by the gross receipts of the two stations. The question was whether the stations were engaged in interstate commerce, and upon this question the opinion of the Federal supreme court states:

"Appellant is thus engaged in the business of transmitting advertising programs from its stations in Washington to those persons in other states who ``listen in' through the use of receiving sets. In all essentials its procedure does not differ from that employed in sending telegraph or telephone messages across state lines, which is interstate commerce. Western UnionTelegraph Co. v. Speight, 254 U.S. 17; New Jersey Bell Tel. Co.v. State Board of Taxes, 280 U.S. 338; Cooney v. MountainStates Tel. Tel. Co., 294 U.S. 384; Pacific Tel. Tel. Co.v. Washington, ante, p. 403. In each, transmission is affected by means of energy manifestations produced at the point of reception in one state which are generated and controlled at the sending point in another. Whether the transmission is effected by the aid of wires, or through a perhaps less well understood medium, ``the ether,' is immaterial, in the light of those practical considerations which have dictated the conclusion that the transmission of information interstate is a form of ``intercourse,' which is commerce. See Gibbons v. Ogden, 9 Wheat. 1, 189.

"Similarly, we perceive no basis for the distinction urged by appellee, that appellant does not own or control the receiving mechanisms. The communications broadcasted are no less complete and effective, nor any the less effected by appellant, because it does not own or command the apparatus by which they are received. The essential purpose and indispensible effect of all broadcasting is the transmission of intelligence from the broadcasting station to distant listeners. It is that for which the customer pays. By its very nature broadcasting transcends state lines and is national in its scope and importance — characteristics which bring it within the purpose and protection, and subject to the control, of the commerce clause."

If the Fisher's Blend Stations were engaged in interstate commerce, it seems to us that it must be held that the Columbia was likewise engaged in interstate commerce. If engaged in that commerce, it necessarily follows that it was doing business in this state.

The writ will be denied.

BLAKE, C.J., MILLARD, and SIMPSON, JJ., concur.