International Shoe Co. v.

State of Washington
Facts
International Shoe Co. (D, appellant) was a Delaware corporation with its principal place of
business in St. Louis, Missouri. It had no offices in the state of Washington and made no
contracts for sale there. International Shoe did not keep merchandise in Washington and did
not make deliveries of goods in intrastate commerce originating from the state.
The company employed 11-13 salesmen for three years who resided in Washington. The
salesman would display the products at places in Washington. They were compensated by
commission for sale of the products. They were also reimbursed for the cost of renting the
places of business in Washington. Prices, terms, and acceptance or rejection of footwear
orders were established through St. Louis. Salesmen did not have authority to make
contracts or collections.
The state of Washington sued International Shoe in Washington State court to recover
unpaid contributions to the unemployment compensation fund. Notice was served personally
on an agent of the defendant within the state and by registered mail to corporate
headquarters.
Defendant argued that the statute violated the due process clause and service upon the
salesperson was improper service. It also argued that it did not do business in Washington,
and there was no agent upon which service could be made.
The Court of Washington held that the state had jurisdiction to hear the case. The
continuous flow of defendants product into Washington was suficient to establih personal
jurisdiction. and International Shoe appealed.
Issue
W/N a State has personal jurisdiction over an absent defendant, international shoe Co.
Held:
Yes. Minimum contacts with the forum state can enable a court in that state to exert
personal jurisdiction over a party consistent with the Due Process clause.
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 foum, he should have certain minimum contacts
with it, such that the maintenance of the suit does not offend traditional notions of fair play
and substantial justice.
Since the corporate personality is a fiction, it is clear that unlik an individual, its presence
without, as well as within the stat of origin can be manifested only by activities carried on in
its behalf by those who are authoried to act for it.
The activities conducted by the agents there are sufficient to render the corporation
amenable to suit brought in the court of the state to enforce an obligation arising out of its
activities there.

And Washington has made one of those activities which taken together etablish appellants
presence there for purposes of suit. Such presence subject it alike to taxation by the state
and to suit to recover the tax.
It is enough that appellant has established such contacts with the state that the particular
form of substituted service adopted there gives reasonable assurance that the notice will be
actually served.
The activities carried on by International Shoe corporation in Washington were systematic
and continuous rather than irregular or casual. The defendant received the benefits and
protection of the laws of the state and is subject to jurisdiction there.
Ordered.
A casual presence of a corporation or its agent in a state in single or isolated incidents is not
enough to establish jurisdiction. Acts of agents of the corporation, because of the nature,
quality, and circumstances of their commission, may be deemed sufficient. Consent may be
implied from the corporations presence and activities in the state through the acts of
authorized agents.
International Shoe had conducted systematic and continuous business operations in
Washington. A large volume of interstate business for the defendant was created through its
agents within the state and the corporation received the benefits and protection of
Washingtons laws. International Shoe had established agents in the state permanently.
continuous and systematic corporate activitie
Perkins v. Benguet Consolidated Mining Co.
The Benguet Consolidated Mining Co.company's mining properties were in the Philippine
Islands. Its operations there were completely halted during the occupation of the Islands by
the Japanese. During that interim the president, who was also the general manager and
principal stockholder of the company, returned to his home in Clermont County, Ohio. There
he maintained an office in which he conducted his personal affairs and did many things on
behalf of the company. He kept there office files of the company. He drew and distributed
there salary checks on behalf of the company. He used and maintained in Ohio, two active
bank accounts carrying substantial balances of company funds. Several directors' meetings
were held at Ohio.
While no mining properties in Ohio were owned or operated by the company, many of its
wartime activities were directed from Ohio and were being given the personal attention of its
president in that State at the time he was served with summons.
Idonah Slade Perkins, a nonresident of Ohio, filed two actions in personam in the Court of
Ohio, against Benguet Consolidated Mining Company, for dividends owed and failure to issue
stock certificates to her. Such cause of action did not arise in Ohio and does not relate to any
business activities in OH.
Issue:

W/N a state can exercise personal jurisdiction over a foreign corporation when the cause of
action does not arise in the state or relate to any of the corporation's activities in the state?
Held:
A state may exercise personal jurisdiction over a foreign corporation even when the cause of
action does not arise in the state or relate to any of the corporation's activities in the state if
the corporation carries on continuous and systematic corporate activities in that state.
there have been instances in which the continuous corporate operations within a state were
thought so substantial and of such a nature as to justify suit against it on causes of action
arising from dealings entirely distinct from those activities. See Missouri, K. & T.R. Co. v.
Reynolds, 255 U.S. 565, 41 S.Ct. 446, 65 L.Ed. 788; 6 Tauza v. Susquehanna Coal Co., 220
N.Y. 259, 115 N.E. 915; cf. St. Louis S.W.R. Co. v. Alexander, supra (227 U.S. 218, 33 S.Ct.
245, 57 L.Ed. 486).
In the case at bar, the same corporation carries on, in that state, other continuous and
systematic corporate activities,consisting of directors' meetings, business correspondence,
banking, stock transfers, payment of salaries, purchasing of machinery, etc.those activities
are enough to make it fair and reasonable to subject that corporation to proceedings in
personam in that state, at least insofar as the proceedings in personam seek to enforce
causes of action relating to those very activities or to other activities of the corporation
within the state.
Accordingly, the judgment of the Supreme Court of Ohio is vacated and the cause is
remanded to that court for further proceedings in the light of this opinion.
The doing of business in this state by a foreign corporation, which has not appointed a
statutory agent upon whom service of process against the corporation can be made in this
state or otherwise consented to service of summons upon it in actions brought in this state,
will not make the corporation subject to service of summons in an action in personam
brought in the courts of this state to enforce a cause of action not arising in this state and in
no way related to the business or activities of the corporation in this state.
service of summons in such an instance would be void as wanting in due process of law.
If an authorized representative of a foreign corporation be physically present in the state of
the forum and be there engaged in activities appropriate to accepting service or receiving
notice on its behalf, the court recognize that there is no unfairness in subjecting that
corporation to the jurisdiction of the courts of that state through such service of process
upon that representative. This has been squarely held to be so in a proceeding in personam
against such a corporation, at least in relation to a cause of action arising out of the
corporation's activities within the state of the forum.
Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95.
The essence of the issue here, at the constitutional level, is a like one of general fairness to
the corporation. Appropriate tests for that are discussed in International Shoe Co. v.
Washington, supra, 326 U.S. at pages 317320, 66 S.Ct. at pages 158, 160. The amount
and kind of activities which must be carried on by the foreign corporation in the state of the

forum so as to make it reasonable and just to subject the corporation to the jurisdiction of
that state are to be determined in each case. The corporate activities of a foreign
corporation which, under state statute, make it necessary for it to secure a license and to
designate a statutory agent upon whom process may be served provide a helpful but not a
conclusive test. For example, the state of the forum may by statute require a foreign mining
corporation to secure a license in order lawfully to carry on there such functional intrastate
operations as those of mining or refining ore. On the other hand, if the same corporation
carries on, in that state, other continuous and systematic corporate activities as it did here
consisting of directors' meetings, business correspondence, banking, stock transfers,
payment of salaries, purchasing of machinery, etc.those activities are enough to make it
fair and reasonable to subject that corporation to proceedings in personam in that state, at
least insofar as the proceedings in personam seek to enforce causes of action relating to
those very activities or to other activities of the corporation within the state.
The instant case takes us one step further to a proceeding in personam to enforce a cause of
action not arising out of the corporation's activities in the state of the forum. Using the tests
mentioned above we find no requirement of federal due process that either prohibits Ohio
from opening its courts to the cause of action here presented or compels Ohio to do so. This
conforms to the realistic reasoning in International Shoe Co. v. Washington,
some of the decisions holding the corporation amenable to suit have been supported by
resort to the legal fiction that it has given its consent to service and suit, consent being
implied from its presence in the state through the acts of its authorized agents.
It is so ordered.

Judgment vacated and cause remanded for further proceedings.

McGee v. International Life Insurance Company

Facts:
Lowell Franklin, a resident of California, purchased a life insurance policy from the Empire Mutual
Insurance Company, an Arizona corporation. In 1948, the respondent agreed with Empire Mutual to
assume its insurance obligations. Respondent then mailed a reinsurance certificate to Franklin in
California offering to insure him. Franklin accepted the offer and paid premiums by mail from
his California home to Defendants office in Texas until his death.
Petitioner, Lulu B. McGee, Franklin's mother, was the beneficiary under the policy. She sent
proofs of his death to the respondent, but it refused to pay, claiming that he had committed
suicide. International life insurance argued that they only ever had one policy in California,
and therefore did not participate in continuous and systematic activity in California.
Therefore the California Court did not have jurisdiction. It appears that neither the original
insurer nor respondent ever had any office or agent in California.
Issue.
Whether a non-resident corporation is subject to jurisdiction in a state in which it never had
any agent or office, merely because it was a party to a contract with a resident of the state.

Held:
The US Supreme Court found that even one policy was sufficient to establish a substantial
connection. And that International Life could be sued in California.
More recently, in International Shoe Co. v. Washington, 326 U. S. 310, the Court decided that
"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 minimum contacts with
it such that the maintenance of the suit does not offend 'traditional notions of fair play and
substantial justice.'"
In thw case at bar, the contract was delivered in California, the premiums were mailed from
there, and the insured was a resident of that State when he died. It cannot be denied that
California has a manifest interest in providing effective means of redress for its residents
when their insurers refuse to pay claims. These residents would be at a severe disadvantage
if they were forced to follow the insurance company to a distant State in order to hold it
legally accountable. When claims were small or moderate, individual claimants frequently
could not afford the cost of bringing an action in a foreign forum.
The Due Process Clause of the Fourteenth Amendment did not preclude the California court
from entering a judgment binding on respondent, since the suit was based on a contract
which had a substantial connection with California.
There is no contention that respondent did not have adequate notice of the suit, or sufficient
time to prepare its defenses and appear.

Compare this case to the similar Hanson v. Denckla (357 U.S. 235 (1958)). The US Supreme Court
distinguished that case by saying that International actually went to McGee in California and solicited
business there, while in Hanson, the company (which was in Delaware), didnt solicit interstate business,
the customer had come to them. It was the interstate solicitation that was the important factor in deciding
whether there was a substantial connection or not.
o

Basically, if you are a company and you cross State lines to get some business, you are giving that
State jurisdiction over you. But if a customer comes into your State and asks for your product, you
are less likely to have a court in the customers State find they have jurisdiction over you.

PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, and ATHONA

HOLDINGS, N.V., petitioners, vs. THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO
DAIC, VENTURA O. DUCAT, PRECIOSO R. PERLAS, and WILLIAM H. CRAIG, respondents. June
19, 1997
FACTS:

Private respondent Ducat obtained separate loans from petitioners Ayala International Finance Limited
(AYALA) and Philsec Investment Corp (PHILSEC), secured by shares of stock owned by Ducat.

In order to facilitate the payment of the loans, private respondent 1488, Inc., through its president,
private respondent Daic, assumed Ducats obligation whereby 1488, Inc. executed a Warranty Deed with
Vendors Lien by which it sold to petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in Texas,
U.S.A., while PHILSEC and AYALA extended a loan to ATHONA as initial payment of the purchase price.
The balance was to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc.
Subsequently, upon their receipt of the money from 1488, Inc., PHILSEC and AYALA released Ducat from
his indebtedness and delivered to 1488, Inc. all the shares of stock in their possession belonging to Ducat.

As ATHONA failed to pay the interest on the balance, the entire amount covered by the note became due
and demandable. Accordingly, private respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and
ATHONA in the United States for payment of the balance and for damages for breach of contract and for
fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock
delivered to 1488, Inc. under the Agreement.

While the Civil Case was pending in the United States, petitioners filed a complaint For Sum of Money
with Damages and Writ of Preliminary Attachment against private respondents in the RTC Makati.

The complaint reiterated the allegation of petitioners in their respective counterclaims in the Civil Action
in the United States District Court of Southern Texas that private respondents committed fraud by selling
the property at a price 400 percent more than its true value.

Ducat moved to dismiss the Civil Case in the RTC-Makati on the grounds of (1) litis pendentia, vis-a-vis
the Civil Action in the U.S., (2) forum non conveniens, and (3) failure of petitioners PHILSEC and BPIIFL to state a cause of action.

The trial court granted Ducats MTD, stating that the evidentiary requirements of the controversy may be
more suitably tried before the forum of the litis pendentia in the U.S., under the principle in private
international law of forum non conveniens, even as it noted that Ducat was not a party in the U.S. case.

Petitioners appealed to the CA, arguing that the trial court erred in applying the principle of litis
pendentia and forum non conveniens.

The CA affirmed the dismissal of Civil Case against Ducat, 1488, Inc., and Daic on the ground of litis
pendentia.

ISSUE:

W/n the Civil Case in the RTC-Makati barred by the judgment of the U.S. court?

HELD: CA reversed. Case remanded to RTC-Makati

NO

While Court has given the effect of res judicata to foreign judgments in several cases, it was after the
parties opposed to the judgment had been given ample opportunity to repel them on grounds allowed
under the law. This is because in this jurisdiction, with respect to actions in personam, as distinguished
from actions in rem, a foreign judgment merely constitutes prima facie evidence of the justness of the
claim of a party and, as such, is subject to proof to the contrary. Rule 39, 50 provides:

Sec. 50. Effect of foreign judgments. The effect of a judgment of a tribunal of a foreign country, having
jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title; but the judgment may be repelled by
evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact.

In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the judgment
of the U.S. court as basis for declaring it res judicata or conclusive of the rights of private respondents.
The proceedings in the trial court were summary. Neither the trial court nor the appellate court was even
furnished copies of the pleadings in the U.S. court or apprised of the evidence presented thereat, to assure
a proper determination of whether the issues then being litigated in the U.S. court were exactly the issues
raised in this case such that the judgment that might be rendered would constitute res judicata.

Second. Nor is the trial courts refusal to take cognizance of the case justifiable under the principle of
forum non conveniens:

First, a MTD is limited to the grounds under Rule 16, sec.1, which does not include forum non conveniens.
The propriety of dismissing a case based on this principle requires a factual determination, hence, it is
more properly considered a matter of defense.
Second, while it is within the discretion of the trial court to abstain from assuming jurisdiction on this
ground, it should do so only after vital facts are established, to determine whether special circumstances
require the courts desistance.
Third. It was error to think for the Court of Appeals and the trial court to hold that jurisdiction
over 1488, Inc. and Daic could not be obtained because this is an action in personam and
summons were served by extraterritorial service. Rule 14 on extraterritorial service provides
that service of summons on a non-resident defendant may be effected out of the Philippines
by leave of Court where, among others, the property of the defendant has been attached
within the Philippines.
It is not disputed that the properties, real and personal, of the private respondents had been
attached prior to service of summons under the Order of the trial court dated April 20, 1987.
[19]

CA reversed. Case remanded to RTC-Makati

This is an exercise of sovereign prerogative of the country where the case is filed.