MUNCHAK CORP.(DEL.) v. Caldwell

214 S.E.2d 194 (1975) 25 N.C. App. 652

The MUNCHAK CORPORATION (DELAWARE) et al.
v.
Joe L. CALDWELL.

No. 7518SC96.

Court of Appeals of North Carolina.

May 7, 1975. Certiorari Denied June 26, 1975.

Younce, Wall & Suggs by Robert V. Suggs and Peter F. Chastain, Greensboro, for additional plaintiff appellant.

Smith, Moore, Smith, Schell & Hunter by Bynum M. Hunter and David M. Moore, II, Greensboro, for defendant appellee.

Certiorari Denied by Supreme Court June 26, 1975.

ARNOLD, Judge.

This case presents a two-fold question: the applicability and the constitutionality of G.S. § 55-145(a)(1), part of North Carolina's "long-arm" statute, with respect to appellant The Munchak Corporation (Georgia). G.S. § 55-145(a)(1) provides:

"Jurisdiction over foreign corporations not transacting business in this State. —(a) Every foreign corporation shall be subject to suit in this State, whether or not such foreign corporation is transacting or has transacted business in this State and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause arising as follows:

(1) Out of any contract made in this State or to be performed in this State. . . ."

The record shows, and the trial court found, that the contract which forms the basis of this action was executed in Greensboro and was to be performed substantially in North Carolina. Although defendant Caldwell no longer plays basketball in the State, he has remained a resident of Greensboro and receives remuneration under the contract there. Appellant, as assignee, assumed, with full knowledge of the pendency of this lawsuit, a portion of the obligations under the contract. It stepped into the shoes of the assignor. See Rose v. Vulcan Materials Co., 282 N.C. 643, 194 S.E.2d 521 (1973); cf. Koppers Co., Inc. v. Chemical Corp., 9 N.C. App. 118, 175 S.E.2d 761 (1970). The facts of this case manifestly meet the statutory criteria for "long-arm" jurisdiction.

Appellant nevertheless contends that the court's assumption of jurisdiction under G.S. § 55-145(a)(1) violates the constitutional requirement of "certain minimum contacts" with the State enunciated by the United States Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). We disagree. The North Carolina Supreme Court has said: "It is sufficient for the purposes of due process if the suit is based on a contract which has substantial connection with the forum state." Byham v. House Corp., 265 N.C. 50, 57, 143 S.E.2d 225, 232 (1965); citing McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); accord, Goldman v. Parkland, 277 N.C. 223, 176 S.E.2d 784 (1970) (contract executed and to be performed in state). While the mere execution of a contract in North Carolina has never been held to be such a connection, we believe that the execution, anticipated performance, and continuing part performance of the contract in Greensboro constitute substantial in-state activity. North Carolina's courts have in personam jurisdiction over Munchak (Georgia). The order of the trial court is

Affirmed.

BROCK, C. J., and PARKER, J., concur.