Pennington v. Toyomenka, Inc.

¶6PER CURIAM;

¶7The sole question presented in this appeal is whether the District Court correctly held that defendant-appellee was not “doing business” in Georgia, which resulted in the dismissal of appellant’s action for lack of personal jurisdiction.

¶8Appellant, the Trustee in Bankruptcy for the estates of three bankrupt corporations, filed the instant action in the Northern District of Georgia, alleging preferential transfers by the bankrupts to Toyomenka in the amount of $99,524. Process was served on Toyomenka, a New York corporation, at its New York address under the Georgia Long Arm Statute, Georgia Code §§ 24-113.1 — 24-118.

¶9Toyomenka answered, denying that it had transacted any business within Georgia such as to enable service under the Georgia Long Arm Statute,1 and then filed a motion to dismiss. The District Court granted this motion to dismiss, and it is from this judgment that appellant now appeals.

¶10There have been no allegations that would make sub-sections (b), (c), or (d) of Georgia’s Long Arm Statute applicable. Consequently, the sole question involved *1293is whether or not Toyomenka has, under the Georgia definition, “transacted business” within Georgia, and thereby conferred in personam jurisdiction on that state’s courts.

¶11The evidence established that Toyomenka transmitted communications from New York to Georgia by means of telephone and mail. It sent goods into Georgia, and was paid by checks drawn on Atlanta banks. However, Toyomenka has never had an agent or employee located in Georgia, has never manufactured any product in Georgia, and has never been domesticated or authorized to conduct business in Georgia.

¶12It appears that the District Judge has accurately interpreted Georgia law. In Coe & Payne Company v. Wood-Mosaic Corporation, 125 Ga.App. 845, 189 S.E.2d 459 (1972), reversed on other grounds, 230 Ga. 58, 195 S.E.2d 399 (1973), jurisdiction over two non-resident corporations was asserted under sub-sections (a) and (c) of the Georgia Long Arm Statute. In considering jurisdiction under sub-section (a), the Georgia Court of Appeals noted:

“We would point out that it (transacting business) would seem to encompass more than mail orders which require acceptance in a nonresident state. Furthermore, transacting business would not be involved where the sole local performance was delivery of items ordered to this state.”

¶13Also relevant is J. C. Penney Company v. Malouf, 230 Ga. 140, 196 S.E.2d 145 (1973). In that case, Malouf, a foreign corporation, sold merchandise to Penney, which was resold by Penney at retail. When the plaintiffs filed suit against Penney for damages allegedly caused by this merchandise, Penney sought to bring Malouf in as a third party defendant.

¶14In allowing Penney to join Malouf, the Supreme Court of Georgia stated:

“We conclude that the manufacture and shipment of merchandise by Malouf for delivery to Penney in Georgia placed the merchandise in the stream of commerce for resale at retail to Georgia citizens; and placing the merchandise in that stream pursuant to the warranty-indemnity contract previously referred to amounted to ‘transacting any business’ in Georgia by Malouf under subsection (a) of our Long Arm Statute.”

¶15Thus it was only when coupled with a warranty-indemnity contract that the Georgia Supreme Court held that shipping goods into Georgia constituted “transacting business”.

¶16Appellant discounts Penney by pointing out that on a motion for rehearing, the Court summarized its earlier action as follows:

“We held that by manufacturing merchandise and placing it in the stream of commerce in Georgia, Malouf was doing business in Georgia. In connection with that doing business in Georgia, Malouf entered into a contract with Penney agreeing to hold Penney harmless for any and all expenses and damages arising or resulting from any ‘alleged defect’ in its merchandise. Penney was sued in Fulton County for an ‘alleged defect’ in the merchandise. The ‘act’ causing expenses and damages to Penney occurred when the suit was brought in Fulton County. The bringing of the suit in 1968 in Fulton County against Penney activated the obligations of Malouf to Penney contained in the contract of indemnity.” Penney, supra, at 149.

¶17Appellant contends that this opinion on rehearing puts the emphasis on placing goods in the stream of commerce.

¶18However, this opinion was written with only the venue question in mind. By saying “We held . . . ”, the

¶19Court does not seem to intend to modify its original holding, but merely to refer to it.

¶20Finally, appellant cites Delta Equities, Inc. v. Larwin Mortgage Investors, 133 Ga.App. 382, 211 S.E.2d 9 (1974). The parties agree on the holding in Delta. It holds that where a non-resident corporation’s agents made two trips into Georgia to negotiate a contract, the “mini*1294mum contracts” necessary to constitute “transacting business” were satisfied. Although it was established that Toyomenka sent agents into Georgia to meet with the bankrupts on the accounts at issue, the business had already been consummated.

¶21The judgment of the District Court is

¶22Affirmed.