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Hoagland v. Springer

Decided: July 5, 1962.

ELMER T. HOAGLAND, PLAINTIFF-RESPONDENT,
v.
WILLIAM C. SPRINGER, DEFENDANT-RESPONDENT, AND CUMMINS ENGINE COMPANY, INC., A CORPORATION OF THE STATE OF INDIANA, CUMMINS DIESEL METROPOLITAN, INC., A CORPORATION OF THE STATE OF DELAWARE, DEFENDANTS, AND CUMMINS DIESEL MICHIGAN, INC., A CORPORATION OF THE STATE OF MICHIGAN, DEFENDANT-APPELLANT



Goldmann, Freund and Foley. The opinion of the court was delivered by Goldmann, S.j.a.d.

Goldmann

[75 NJSuper Page 561] Defendant Cummins Diesel Michigan, Inc. (hereinafter Michigan) sought leave, pursuant

to R.R. 2:2-3, to appeal from two Law Division orders respectively denying its motions to dismiss plaintiff's action and defendant Springer's cross-claim, or in lieu thereof to quash and vacate the return of the summons served upon it. The grounds for the motions were that the court lacked jurisdiction over Michigan and, further, Michigan was not subject to service of process within the State of New Jersey under R.R. 4:4-4(d) in that Erwin H. Jahn, of Cummins Diesel Metropolitan, Inc. (hereinafter Metropolitan), the person upon whom service against Michigan was made at Metropolitan's Newark, N.J., office, was not an officer, director, trustee, managing agent or servant of Michigan, and Metropolitan was not a registered agent of Michigan or authorized to accept service for it. We granted leave to appeal. The parties having fully briefed the jurisdictional question, it was agreed that this court proceed to dispose of the appeal without further briefs or argument.

Plaintiff instituted this action against defendant Springer, Cummins Engine Company, Inc., an Indiana corporation (hereinafter Engine), Cummins Diesel Michigan, Inc., a Michigan corporation, and Cummins Diesel Metropolitan, Inc., a Delaware corporation authorized to do business in New Jersey, to recover for serious personal injuries sustained when the Diesel engine in Springer's Ford tractor exploded while plaintiff was operating the tractor on the New Jersey Turnpike on July 13, 1960. Springer had entered into negotiations with a representative of Michigan, in Dearborn, Michigan, in February 1960 for converting his Ford tractor conventional engine to a Cummins Diesel engine. The contract for the conversion was executed on March 25 following, and the work completed sometime during the first week of April 1960.

Springer took delivery of the converted tractor in Dearborn, and then drove to Wayne, Michigan, to receive a load of automobiles for transportation to New Jersey. While riding along the Pennsylvania Turnpike he noticed that the oil pressure kept dropping. He finally stopped and phoned

Cummins Diesel Michigan and explained his difficulties to its representative, one Yaek. Yaek instructed Springer to check the oil dilution. He checked the oil line and then put through a second call to Yaek, who told him not to be too concerned, but to continue on, making certain that the oil pressure did not drop below 20 pounds. He instructed Springer to take the tractor to Metropolitan "first thing" on arrival at Newark, N.J. Springer did so, and Metropolitan apparently corrected the difficulty that was causing the dilution, at the same time replacing the oil, changing the filters, replacing a washer in one fuel line and making a 3,000-mile check, although the new engine had been run only 700 miles. Springer was personally billed for $24.09, representing the oil change and filters. He was not billed for the correction of the dilution difficulty or the 3,000-mile checkup, for which Metropolitan was paid under the Cummins Engine Company warranty. On his return to Dearborn, Springer discussed the $24.09 bill with Yaek and was reimbursed by Michigan.

The first four counts of the complaint respectively charge Springer, Engine, Michigan and Metropolitan with negligence directly and proximately resulting in plaintiff's injuries. Plaintiff specifically charged that each of the three Cummins companies knew or had reason to know the purpose for which the Diesel engine and its component parts were intended, and that a defect in their construction and the installation of an engine and parts of improper design would constitute an inherently and imminently dangerous instrumentality. He also charged Engine and Michigan with failure to exercise reasonable care, skill and diligence in the manufacture, assembly, inspection, testing, design and installation of the engine and its component parts, thereby rendering them unsafe and unfit for installation, use and operation. The charge against Metropolitan was failure to exercise reasonable care, skill and diligence in inspecting and testing the design, assembly, construction and installation of the Diesel engine and its component parts, and to discover and give notice or warning to defendant

Springer of their defects and improper design, assembly, construction and installation. The fifth count charged joint and several negligence of the defendants Engine, Michigan and Metropolitan, directly and proximately resulting in the explosion and plaintiff's injuries. The sixth and seventh counts, respectively directed to Engine and Michigan, were based upon breach of an express or implied warranty of merchantability. The eighth count charged them jointly and severally with breach of that warranty.

Springer answered and cross-claimed against the three Cummins companies, the allegations of the cross-claim essentially paralleling those of the complaint and, in addition, demanding property damages. Michigan then moved to dismiss the complaint and cross-claim or, in the alternative, to quash and vacate the return of service, for the reasons already stated. In denying these motions the Law Division judge delivered an oral opinion, reported in 74 N.J. Super. 275 (1962). He outlined in some detail the relations of Engine -- a major manufacturer of Diesel engines, with its principal plant located in Indiana -- to its network of some 50 distributors (among them Michigan and Metropolitan) and many dealers located throughout the United States. We find entirely correct his characterization of each distributor and dealer as "an integral spoke in a wheel in which Engine is the hub. Without each spoke Engine could hardly carry on its vast empire of operations." He pointed out that Engine maintains a teletype network which gives it direct contact with all distributors, and also serves as a direct communication between distributors across the nation. By means of this teletype system, distributors are able to order Engine products directly from the manufacturer and obtain parts from each other whenever occasion arises. He observed that

"Michigan, like Metropolitan, is an integral and component part of Engine's empire, together with the other forty-eight distributors spread throughout these ...


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