William R. Andrews Associates v. Sodibar Systems of D. C., Inc.

222 S.E.2d 922 (1976) 28 N.C. App. 663

WILLIAM R. ANDREWS ASSOCIATES
v.
SODIBAR SYSTEMS OF D.C., INC.

No. 7515DC914.

Court of Appeals of North Carolina.

March 17, 1976. Certiorari Denied May 3, 1976.

Epting & Hackney by Joe Hackney, Chapel Hill, for plaintiff-appellee.

James B. Maxwell, Durham, for defendant-appellant.

Certiorari Denied by Supreme Court May 3, 1976.

PARKER, Judge.

The sole question presented is whether the court acquired in personam jurisdiction over defendant corporation under our "long arm" statute, G.S. 1-75.1 et seq. Plaintiff contends that the North Carolina court acquired such jurisdiction by virtue of G.S. 1-75.4(5)d which provides that a court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) of the Rules of Civil Procedure in any action which:

"d. Relates to goods, documents of title, or other things of value shipped from this State by the plaintiff to the defendant on his order or direction."

Defendant, in contesting the in personam jurisdiction of the North Carolina courts, makes two contentions. First, defendant contends that there is no indication in the record that the defendant corporation ever ordered or directed plaintiff to ship any goods anywhere, and therefore G.S. 1-75.4(5)d does not apply. Second, defendant contends that the imposition of in personam jurisdiction over this defendant by the North Carolina courts under the facts of this case is unconstitutional in that it would violate defendant's due process rights under the Federal Constitution.

As to defendant's first contention, plaintiff alleged in paragraph VI of the complaint that on or about 12 November 1973 "on the order and direction of defendant, plaintiff shipped from his warehouse near Durham, North Carolina, and delivered to the defendant at his place of business" the 150 new aluminum CO2 cylinders "as agreed in the contract." No responsive pleading has been filed, and nothing in the present record controverts the above quoted allegations of the complaint. The averment in the affidavit made by defendant's president that "Mr. Andrews arranged with the defendant company to ship to the defendant company an additional 150 aluminum cylinders" is not inconsistent with the fact that the shipment may have been made on defendant's order or direction, and nothing elsewhere in the affidavit controverts the quoted portion of paragraph VI of the complaint. The trial court has found that this action relates to goods shipped from North Carolina by the plaintiff to the defendant at defendant's order and direction. That finding is supported by the uncontroverted allegations in plaintiff's complaint. Accordingly, on the present record we find G.S. 1-75.4(5)d applicable to this case, and we are thus brought to defendant's second contention, that to apply the statute to impose in personam jurisdiction upon defendant under the facts of this case would violate defendant's rights to due process under the Constitution of the United States.

In the context of defendant's constitutional contentions, "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimal contacts with it such that the maintenance of the suit does not offend ``traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945). The existence of minimum contacts must be determined upon the particular facts of each case. Chadbourn, Inc. v. Katz, 285 N.C. 700, 208 S.E.2d 676 (1974).

What contacts did defendant in the present case have with the State of North Carolina? It maintained no office here, sent no salesman, agent, or employee here, solicited no business here, advertised in no media coming into this State, and had no contact of any nature with any person, firm, or corporation of the State of North Carolina excepting only its transactions with the plaintiff herein. With regard to those transactions, the facts shown by this record, as disclosed by the allegations in plaintiff's complaint and in the affidavit of defendant's president, are that on two occasions, once in late July and once in early November 1973, Mr. William R. Andrews, representing plaintiff, visited at defendant's office in Washington, D.C., where he solicited orders for aluminum CO2 cylinders. As a result of the first visit he obtained an order from defendant for 250 cylinders at a price of $27.55 each delivered to defendant's warehouse, and those cylinders were shipped by Andrews to defendant on or about 2 August 1973. Apparently no controversy exists between the parties with respect to those 250 cylinders. At the time of Andrews' second visit to defendant's office in Washington, D.C., on or about 1 November 1973, he offered to sell to defendant aluminum CO2 cylinders at a unit price of $30.75. Defendant accepted this offer and placed his order for 150 of said cylinders. As agreed in the contract resulting from this offer and acceptance, plaintiff shipped from his warehouse near Durham, North Carolina, and delivered to the defendant at its place of business in Washington, D.C., the 150 new aluminum cylinders which are the subject of this suit. This shipment was arranged for by plaintiff with Ryder Truck Lines, Inc., and plaintiff also arranged with Ryder Truck Lines, Inc. to pick up from defendant in Washington, D.C., certain used cylinders for shipment to Florida.

Upon analysis of the foregoing facts, it is apparent that the only contact defendant has ever had with the State of North Carolina is that on two occasions defendant entered into contracts in Washington, D.C. with a resident of North Carolina for delivery and receipt of certain goods in Washington, D.C. These contracts were negotiated, agreed to, and performed outside of North Carolina, and the only activity in North Carolina which resulted from them was that on two occasions plaintiff, not the defendant, made shipments of goods from plaintiff's warehouse in North Carolina.

We have found no case holding "contacts" so meager as here disclosed sufficient to sustain in personam jurisdiction in the forum State. See: Annot., 20 A.L.R.3d 1201 (1968). Among the cases relied upon by plaintiff, McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957) states that it is sufficient for the purposes of due process that the suit be based on a contract "which had substantial connection with" the forum State, and the Supreme Court, in finding such a substantial connection in that case, pointed out that the contract of life insurance there sued upon was delivered in the forum State, the premiums were mailed from there, and the insured was a resident of that State when he died. No such continuing contractual relationship connecting defendant with the forum State is shown in the present case. Byham v. House Corp., 265 N.C. 50, 143 S.E.2d 225 (1965) involved a franchise agreement for operating a restaurant business under a chain trade name in a specified territory in this State. The nonresident defendant reserved the right to select the location, set up the business, establish procedures during the opening week, control policy, maintain general supervision throughout the life of the franchise, inspect the books, premises and operations, control all of the forms and details of the business, furnish supplies and equipment, and control advertising. The Court held there were sufficient contacts with this State by the nonresident defendant to support in personam jurisdiction over defendant in North Carolina. No such extensive contacts have been shown in the present case. Chadbourn v. Katz, supra, was concerned with an action for breach of a contract for sale of real property located in North Carolina. Plaintiff's action in the present case does not involve real property in this State.

For the courts of this State to exercise in personam jurisdiction over defendant in the present case under the facts disclosed by the record now before us would, in our opinion, violate defendant's constitutional rights to due process. Accordingly, the judgment appealed from is

Reversed.

BRITT and CLARK, JJ., concur.