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Klein v. Sunbeam Corp.

Supreme Court of Delaware

March 13, 1953

KLEIN
v.
SUNBEAM CORP.

Action was brought against foreign corporation to recover damages for publication of an alleged libelous statement. The Superior Court, New Castle County, dismissed complaint. On writ of error, the Supreme Court, Wolcott, J., 94 A.2d 385, reversed judgment and held that complaint was sufficient. Thereafter corporation was granted limited reargument. The Supreme Court, Wolcott, J., held that phrase ‘ any corporation’ as used in statute providing that suits may be brought against ‘ any corporation’, at law by summons, and by subpoena in chancery, includes foreign corporations as well as domestic corporations.

Original opinion adhered to.

[47 Del. 576] John Van Brunt, Jr., and David Snellenburg, II (of Killoran & Van Brunt), of Wilmington, for appellant.

David F. Anderson and James L. Latchum (of Berl, Potter & Anderson), of Wilmington, for appellee.

WOLCOTT and TUNNELL, Justices, and BRAMHALL, Vice Chancellor, sitting.

WOLCOTT, Justice.

[47 Del. 577] On December 31, 1952, an opinion, 94 A.2d 385, was filed in this cause directing

Page 461

that the judgment below be reversed. Thereafter, the appellee was granted limited reargument on the question of the proper application of 1935 Code, § 4589[1] which in part is as follows:

‘ Suits may be brought against any corporation, at law by summons, and by subpoena in Chancery. Process may be served on the President, or head officer, if residing in the State, and if not, on any officer, director, or manager of the corporation; and when a cause of action arises in this State against any Corporation incorporated outside of this State, and there is no President or head officer of such corporation or any officer, director or manager thereof resident in this State, nor any certified agent thereof, for the service of process, resident in this State, process against such corporation may be served upon any Agent of such corporation then being in the State; * * *.’

Brief reference to the underlying facts pertaining to the question will be made. The appellee, an Illinois corporation, is engaged in the business of manufacturing and selling through wholesalers various electrical appliances. Its scheme of business consists of selling to wholesalers with whom it has entered into fair trade contracts and then enforcing compliance by retailers with the price provisions of its fair trade contracts. Such was its scheme of operation within the State of Delaware. In the course of its operations in Delaware, the appellee advertised its products, policed its retailers by ‘ shopping spies', instituted on one occasion a fair trade compliance suit against the appellant and, for a period of time subsequent to the arising of the cause of action for libel asserted by the appellant, warehoused its products in Delaware and filled orders to retailers from the stock on hand.[2]

[47 Del. 578] The precise question before us is the validity under 1935 Code, § 4589 of the service of process upon the appellee which was made upon a vice-president of the appellee then in Wilmington attending a meeting of sales representatives.

The appellee argues that the validity of the service must be determined under the portion of the statute referring to service of process in suits enforcing a cause of action which arose in Delaware. It argues that it was not ‘ doing business' in Delaware at the time the cause of action arose and that, therefore, the service of process is invalid since the jurisdictional requirements over it were not in existence at the time the cause of action arose.

The argument is based upon the historical development of 1935 Code, § 4589. The forerunner of this statute was enacted in 1819 as ‘ An Act for Expediting Suits Against Corporations'. 5 Del.Laws, Ch. CCXXXI. This act provided for the issuance and service of process ‘ against any corporation or body politic’ without designating the corporate officials to be served with process.

Thereafter, in 1829, by ‘ An Act for Expediting Suits Against Corporations', 7 Del.Laws, Ch. CLXIV, the 1819 statute was repealed and it was enacted that suits could be brought ‘ against any corporation by their corporate name’ and service of ...


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