Before AUGUSTUS N. HAND, CHASE, and CLARK, Circuit Judges.
The papellant initiated the present action in the District Court for the Southern District of New York against the Hertz Drive-Ur-Self System, Inc. (hereinafter called "Hertz"), Edward J. O'Brien, and Charles A. Harrison administrator of the estate of Walter Benedict Baer. Briefly, the complaint alleges that the plaintiff's intestate was killed on May 29, 1950, in an automobile collision on Route 22 in the State of New York; that the automobile which caused the death of the deceased was operated by Walter Benedict Baer, was owned by the defendant Edward J. O'Brien, and was rented by Walter Benedict Baer from Edward J. O'Brien; that Edward J. O'Brien rented the automobile to Water Benedict Baer as a licensee of and on behalf of Hertz, and that the licensee, Edward J. O'Brien, conducted his business in East Norwalk, Conn. Service upon the defendant Hertz was made through a United States Marshal by leaving a copy of the summons and complaint with George R. Gannon, assistant comptroller of the Carey Driveurself System, Inc. (hereinafter called "Carey"), a New York corporation. On the motion of Hertz, Judge Ryan, on the ground that the court lacked jurisdiction over Hertz, vacated the service of the summons and complaint and entered judgment in favor of Hertz. The questions arising on this appeal are whether Hertz is jurisdictionally present in the State of New York, and if so, whether service was properly made. Since we agree with the conclusion reached by the district judge that the court lacked jurisdiction over Hertz, it is unnecessary to decide the latter question.
The jurisdictional presence of a foreign corporation depends on whether the corporation is doing business within the state. People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S. Ct. 233, 62 L. Ed. 587. From the affidavits it appears that Hertz maintains no offices of its own and does not directly conduct any business in New York. However, the appellant contends that Carey was in fact acting as the agent of Hertz in the business transacted by Carey in New York. This contention is based on the following facts: Hertz devised a plan or system of renting automobiles to customers who drive the automobiles themselves, the system being known under the trade-name of Hertz Drive-Ur-Self System. In order to effectuate the system on a national scale, Hertz licenses hundreds of local individuals and corporations throughout the United States and Canada to use its system and the trade-name. Carey Driveurself, Inc., a New York corporation, is such a Hertz licensee, but independent and locally owned. The license agreement between Hertz and Carey provides, inter alia, for the payment of specified fees by the licensee for each car maintained by Carey in its Driveurself business. The licensee is required to use the Hertz standard form of rental agreement and to permit the licensor to inspect its premises, automobiles and records and accounts. Hertz's obligations are limited to assisting the licensee in procuring the various materials used in the Driveurself business and to help in locating automobiles which may have been stolen from the licensee.
This license agreement cannot be described as a subterfuge to avoid local jurisdiction, see Bach v. Friden Calculating Machine Co., 6 Cir., 167 F.2d 679, and does not constitute an appointment by Hertz of Carey as its agent for the purpose of renting automobiles in New York. Echeverry v. Kellogg Switchboard & Supply Co., 2 Cir., 175 F.2d 900. The appellant makes much of the fact that the Manhattan Telephone Directory lists Carey's address and telephone number under the name of Hertz Drive-Ur-Self System and that an advertisement in the Classified Directory features the name "Hertz" rather than that of Carey.However, it appears that the advertisement is paid for by Carey, and the featuring of the Hertz name is simply a means of directing potential customers to a place which rents automobiles since the Hertz name would in all likelihood be more familiar than that of Carey. In our opinion Carey was not an agent of Hertz to do business in New York but a mere licensee.
For the foregoing reasons, the judgment is affirmed.
CLARK, Circuit Judge (concurring).
I agree with the opinion and decision both in what is explicitly stated and in what is necessarily implied, viz., that we have here on appeal an appealable judgment. In view of developments in this circuit hereinafer noted, I believe it is necessary or at least desirable to indulge in some fuller explanation of this part of our decision. For the parties named as defendants and legally responsible for the one accident which killed plaintiff's intestate were the administrator of the deceased operator of the colliding car, the owner, and the asserted licensor under the Hertz Drive-Ur-Self Systems (the present defendant-appellee) and no order or judgment was entered against the first two. Since the core of the case was this single accident, here were all the elements of "jointness" so called, as stressed in Republic of China v. American Express Co., 2 Cir., 190 F.2d 334, 335, 336, to render this separate judgment not immediately appealable under the principles of law in force before the amendment to Fed. Rules Civ.Proc. rule 54(b), 28 U.S.C.A. But here the judge in directing the entry of a final judgment for this defendant also proceeded under the new form of the rule to determine that there was no just reason for delay. This action by him brought the case within the operation of the statute granting appeals from final decisions of the district courts, 28 U.S.C. § 1291, as we held in Pabellon v. Grace Line, 2 Cir., 191 F.2d 169, July 26, 1951. certiorari denied Coston Supply Co. v. Pabellon, 342 U.S. 893, 72 S. Ct. 201, citing numerous decisions of appellate courts on the new rule.
Hence, but for one circumstance, no further comment would be necessary. That circumstance is the decision eight days later by another panel of this court that the rule as thus applied must necessarily be considered invalid: Flegenheimer v. General Mills, 2 Cir., 191 F.2d 237, Aug. 3, 1951.*fn1 Although the court provided no documentation for its holding either in the past history of rule-making or in precedents such as the directly relevant holding of Reeves v. Beardall, 316 U.S. 283, 62 S. Ct. 1085, 86 L. Ed. 1478, the opinion and decision necessarily put in jeopardy fully a third of the federal civil rules. When an act of Congress is under attack the Attorney General must be notified so that he can come in and defend it. 28 U.S.C. § 2403. No similar procedure protects the rules even though they have been formally passed upon by the Supreme Court, and, having been laid before Congress, found unobjectionable there. Questions such as this are not the kind counsel are likely to examine and brief; while litigants desire certainty, their interest in what certainty is not so immediate. Consequently the question is likely to come up in the court, with no help whatsoever from outside sources - as has indeed occurred with all our recent cases on the point. The background of history and precedent is then likely to be unknown to the adjudicators. But it is important and, I submit with deference, impelling.*fn2
When in 1935 the Supreme Court constituted the Advisory Committee on Rules of Civil Procedure and charged it with the duty of drafting a set of rules for effective district court procedure, that Committee was confronted at once with definite problems as to the extent of the Court's power to adopt particular rules urgently needed to make the new procedure workable. These arose because the questions had not been visualized by the draftsmen of the then Enabling Act, passed on June 19, 1934 - the former 28 U.S.C. §§ 723b, 723c - and that act appeared to have certain gaps and ambiguities. The statute granted authority to regulate the practice and procedure in the district courts, and questions hence arose as to the extent of the power by rule to regulate the admission of evidence, to supersede statutes, to provide for appellate practice, and to amend rules once adopted. These were all matters of consequence; they assumed increased importance because the Supreme Court, pursuant to a well understood popular mandate,*fn3 had already announced its determination to unite the federal law and equity procedures. How could that mandate be carried out if, for example, the numerous existing statutes regulating details of federal procedure continued to apply in equity, but not in law, because the superseding power of the rules was stated only in that section of the act which dealt with rules in actions at law? (That particular problem was definitely settled, in accordance with the Committee's view, in the decision in Sibbach v. Wilson & Co., 312 U.S. 1, 61 S. Ct. 422, 85 L. Ed. 479, in 1941, in which the Court - although divided on another point - was unanimous as to the validity of the superseding power; it is now made extensive with the grant of rule-making authority in the present statute, 28 U.S.C. § 2073.) And how further could it be carried out if the two distinctive and separate types of appellate review must necessarily be continued?
The Committee had no difficulty in reaching at once the decision that rule-making authority existed as to all activities taking place in the district courts, even though they might consequentially affect appellate practice; this would include such matters as the manner of taking the appeal, allowing the substitution of the simple notice of appeal for the old allowance and citation, and all the details as to making up of the record for transmission to the upper court. It also included, quite clearly, Rule 54(b) in its original form, which accelerated finality of judgment in many instances of the "split judgment," made useful by the wide joinder of parties and of claims featured in the new procedure. This rule had its definite consequence in the trial court. Thus it was immediately effective in affording a basis for the award of costs to a winning party, the issuance of a writ of execution, and the like.See Rule 62(h). Its only effect upon appellate procedure was consequential because of the existence of a statute expressing the policy of the Congress - and always quite within its control - that appeals should be taken from final decisions.
But there still remained the problem as to those direct regulations of appellate practice which would be quite necessary to make a new and uniform procedure workable. Faced with this problem the Committee asked the present writer, as its Reporter, to examine the legal background and to report thereon. This he did with the assistance of associates, presenting a lengthy memorandum which was then published in substance as Clark, Power of the Supreme Court to Make Rules of Appellate Procedure, 49 Harv.L.Rev. 1303, 1936. We found that there was considerable reserve power in the Supreme Court from earlier statutes and traditional exercise, as was illustrated over the Court's history down to and including the Equity Rules of 1912, and that authority existed beyond the 1934 act for these necessary additional rules as well as the others. The Committee adopted this view, but took pains to set it forth with care - explaining the two classes of rules involved and the lack of question as to the first - in a letter to Chief Justice Hughes of May 1, 1936, which is reprinted as a Foreword to the Preliminary Draft of Rules of Civil Procedure, May 1936, pp. xi, xii. This clear statement - reprinted in the footnote*fn4 - was incorporated by specific reference in the Report of Rules of Civil Procedure, April 1937, p.v. Since the Supreme Court, thus carefully advised, adopted these very important provisions, it has been naturally assumed that it adopted the Committee's view. 1 Moore's Federal Practice § 1.04, 1st Ed. 1938; 2 Moore's Federal Practice P1.04, p. 30, 2d Ed. 1948. Moreover, it should be noted that these very matters were carefully explained by Chairman Mitchell of the Committee in 1938 at the Cleveland Rules Institute of the American Bar Association, pp. 181, 182, and again at the New York Symposium, p. 226.*fn5 Such contemporary statements "by the authorized spokesmen" of the Committee, as we know, have been held "of weight" in the Court's later consideration of the rules. Mississippi Pub. Corp. v. Murphree, 326 U.S. 438, 444, 66 S. Ct. 242, 90 L. Ed. 185.
The subsequent history, whether the rules be viewed as a whole or this particular rule be stressed, amply bears out the interpretation thus originally made. Considering, first, the rule itself, it was at once recognized that its original form of split judgment generally on multiple claims was a definite change and extension of former principles, as, for example, in situations involving permissive counterclaims arising out of distinct and differing transactions.*fn6 So clear was this that this court felt compelled, in Collins v. Metro-Goldwyn Pictures Corp., 2 Cir., 106 F.2d 83, to overrule earlier contra cases in the circuit.*fn7 At length the matter came before the Supreme Court which upheld and applied the then rule in a leading and careful opinion: Reeves v. Beardall, 316 U.S. 283, 62 S. Ct. 1085, 86 L. Ed. 1478. This case appears to be clear authority for the present rule in its criticized aspect.
But the change went so far as to infringe on the ancient and settled federal policy against "piecemeal appeals," see, e.g., Catlin v. United States, 324 U.S. 229, 65 S. Ct. 631, 89 L. Ed. 911, and it became obvious that some retreat was necessary. Further there developed, notably in this circuit, a con flict of view as to finality with regard to claims against several defendants liable only alternatively or at any rate not jointly. This, then, was one of the rules singled out by the Committee for intensive restudy in 1943. The extent of the Committee's consideration is somewhat indicated by the note to earlier drafts of the amendment (Preliminary Draft of Proposed Amendments, May 1944, 64, 65; Second Preliminary Draft, May 1945, 62, 63), but is set forth in some detail in the note in its Report of June 1946, 70-72. The Committee had excellent support through its contacts with the bench and bar and, as it points out, received well-nigh universal approval for its new proposal from these interested and alert groups. What it desired to do was to restore the historic federal principle, while offering some means of relief for the occasional hard case where immediate review was convenient and desirable. The result was a rational solution achieving these objectives which aroused the enlightened interest, in advance of its actual operation, of the Supreme Court itself in Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 512, 70 S. Ct. 322, 324, 94 L. Ed. 299,*fn8 and received the support of writers and judges*fn9 until its present setback.*fn10
Validity is also strongly supported by the history of other important rules. Necessarily to be included, along with Rule 54(b), in the group of rules which directly affect only district court practice, but have also some consequential meaning for appellate practice, are at least Rules 41, 49, 50, 55, 56, 58, 59, 60, 68, 70, and 71A. These include such well known rules as those relating to voluntary or involuntary dismissal with or without prejudice, special verdicts and interrogatories, the motion for directed verdict with reservation of decision, new trials, relief from judgments, default and summary judgments, when the clerk shall enter judgment, the method of offer of judgment, the judgment directing specific acts, including the vesting of title, and the extensive procedure up to judgment of the new condemnation rule. Many of these rules have been so extensively litigated that specific citation is surely unnecessary. But to cite only two, the ...