39 S.E. 559 | S.C. | 1901
August 5, 1901. The opinion of the Court was delivered by The action in this case was commenced by the service of summons, with a copy of the complaint attached thereto, upon one George F. Schminke, at Abbeville C.H., on the 7th day of November, 1900, by the Sheriff of Abbeville County, under the claim that the said Schminke was an agent of the defendant company, a corporation duly chartered under the laws of the State of Missouri. In the complaint it is alleged that "the cause of action set forth herein arose in this State," and the other allegations set forth as the cause of action is the *367 breach of a contract whereby the defendant company guaranteed that a certain electric machine for the purpose of generating electricity, known as a 45 K.W. Warren Alternater, sold by defendant to plaintiff in December, 1899, was free from any and all inherent electrical or mechanical defects. Before the time for answering expired, to wit: on the 26th of November, 1899, the defendant, by his attorney, gave notice of a motion to set aside the service of the summons, "on the ground that the party served with the summons and complaint herein, on the 7th day of November, 1900, was not an agent of the defendant" — expressly stating in this notice that "defendant will appear for the purpose of objecting to the jurisdiction of this Court, and for no other purpose."
This motion was heard by his Honor, Judge Benet, upon the affidavits and letters and card thereto attached, which are set out in the "Case" (which will be incorporated in the report of this case by the Reporter), who, in a short order, granted the motion to set aside the service of the summons, and dismissing the case for want of jurisdiction. The only reason given by the Judge is thus expressed in his order: "After argument of counsel on both sides, I hold that defendant, non-resident corporation, could not be brought within the jurisdiction of this Court by service of the summons upon the said George F. Schminke, he not being, in my opinion, an agent in the sense in which `any agent,' is used in the Code." The provision of the Code here referred to may be found in the second paragraph of sec. 155, where, after prescribing the manner in which a corporation shall be served with a summons, originally proceeded as follows: "Such service can be made in respect to a foreign corporation only when it has property within the State, or the cause of action arose therein, or where such service shall be made in this State personally upon the president, cashier, treasurer, attorney or secretary, or any resident agent thereof." But by the act, approved 2d March, 1899, 23 Stat., 42, that provision of the Code was amended by striking out the word *368 "resident" in the last line of the above quotation; so that, as the law now reads, and as it read at the time this action was commenced, a foreign corporation could be made a party to an action by serving personally any agent of such foreign corporation within the limits of this State. If, therefore, we look alone to the express language used in the Code, especially bearing in mind the fact that the legislature had, in express terms, seen fit to strike out, by the act of 1899,supra, the word "resident" — the only word qualifying the word "agent," leaving the broad terms "any agent," without any qualification whatsoever — it is clear that the Circuit Judge erred in holding, practically, that the word "agent" must be qualified in some way, though he does not specify in what way. In addition to this, it will be observed that the notice of the motion expressly states that it was based "on the ground that the party served with the summons and complaint herein on the 7th day of November, 1900, was not an agent of the defendant," and that ground was not only not sustained by any evidence offered in the "Case," but on the contrary was in terms negatived by the defendant's own showing; for in the affidavit of Scudder, the general manager of the defendant, he only says that Schminke "at the time of said service, was not an officer of this defendant, nor a director thereof;" but he does not say that he was not anagent of defendant company; but he does say, not expressly, it is true, but by necessary implication, that he was an agent; for he says: "that he was simply and solely the traveling salesman for this defendant" — going on to state to what extent his powers and duties were limited; and this necessarily implies that he was an agent of the defendant. Nor was there any finding of fact by the Circuit Judge that Schminke was not the agent of the defendant. On the contrary, the language used by him necessarily implies that while he thought that Schminke was, in one sense, the agent of the defendant company, yet, in his opinion, he was not an agent, "in the sense in which `any agent' is used in the Code." It is clear, therefore, that if the only ground upon *369 which the motion was based was not sustained, there was error in granting the motion.
It is earnestly and with force contended by the counsel for the respondent that the provisions of the Code above referred to should not be literally construed, and that, on the contrary, with a view to avoid a conflict with well settled principles established by the decisions of the Supreme Court of the United States — the tribunal invested with authority to determine finally controversies between citizens of different States of the Union, the provisions of our Code should be given a liberal construction, as was done in the case ofTillinghast v. Boston Port Royal Lumber Company, andMoore v. S.C. Forsaith Machine Company,
It was also contended by counsel for respondent that the defendant company not having complied with the provisions of sec. 1466 of the Rev. Stat. of 1893, has not waived its exemption from suit in the Courts of this State, or consented to be subjected to the jurisdiction of our Courts. In the first place, it must be remembered that the provisions of that section, as well as other sections contained in the same chapter of the Rev. Stat., have been amended by the act of 1897, 22 Stat., 484, and various other conditions have been added, one of which is, "that it shall be taken and deemed to be the fact, irrebutable, and part and parcel of all contracts entered into between such corporation [foreign] and a citizen or corporation of this State, that the taking or receiving from any citizen or corporation of this State of any charge, fee, payment, toll, impost, premium, or other moneyed or valuable consideration, under or in performance of any such contract, or of any condition of the same, shall constitute the doing of its corporate business within this State, and that the place of the making and of the performance of such contract shall be deemed and held to be within this State, anything contained in such contract or in any rules or by-laws of such corporation to the contrary notwithstanding." Now if the defendant company has received any payment or other moneyed or valuable consideration under or in performance of the contract, admittedly made between the parties, as may be reasonably and as we think must be inferred, then under the statutory provision just quoted, it must be regarded as an irrebutable fact that the defendant company was doing business within this State, and the place of the making and of performance of such contract shall be deemed *372 and held to be within this State, notwithstanding anything to the contrary in the contract, or the rules and by-laws of the foreign corporation. Under this view the case must be regarded as a case in which a domestic corporation, having, as it supposed, a claim against a foreign corporation, doing business in this State, arising out of a contract made and to be performed in this State, has undertaken to commence its action against such foreign corporation by serving, personally, within the limits of this State, an agent of such foreign corporation, with a copy of the summons; and in such a case we do not think that any authority has been or can be cited, which holds that the State Court had not thereby acquired jurisdiction of the foreign corporation.
But assuming that we are in error in regarding this case as such a case as that just mentioned, and, on the contrary, that it is a case in which the plaintiff, a domestic corporation, has brought an action, under a contract which was not made in this State and was not to be performed here, against the defendant, a foreign corporation, and has undertaken to obtain jurisdiction of such foreign corporation, by the personal service of its agent within the limits of this State; we will proceed to inquire whether, under the admitted facts in this case, such service would be recognized as good and valid, under the decisions of the Supreme Court of the United States, as we freely recognize the superior authority of such decisions in controversies between citizens of different States.
The first case cited by respondent's counsel is the case ofThe Lafayette Ins. Co. v. French, 18 How., 404. That was a case in which the question was as to the validity of a judgment recovered against the plaintiff in error, a foreign corporation, in a State Court of Ohio, in an action commenced by service of process upon an agent of said plaintiff in error, within the limits of the State of Ohio; and the question turned upon the inquiry whether the State Court of Ohio had, by such service, obtained jurisdiction of the said insurance company, the objection to such service being that a *373 State Court could not obtain jurisdiction of a foreign corporation created by the laws of another State. As is stated by Mr. Justice Curtis, in delivering the opinion of the Court: "The precise facts upon which this objection depends are that this corporation was created by a law of the State of Indiana, and had its principal office for business within that State. It had also an agent authorized to contract for insurance, who resided in the State of Ohio. The contract on which the judgment in question was recovered was made in Ohio, and was to be there performed; because it was a contract with the citizens of Ohio to insure property within that State. A statute of Ohio makes special provision for suits against foreign corporations, founded on contracts of insurance there made by them with citizens of that State; and one of its provisions is, that service of process on such resident agent of the foreign corporation shall be as `effectual as though the same were served on the principal.'" In discussing the law applicable to this state of facts, the learned Justice uses the following language: "The inquiry is not whether the defendant was, personally, within the State, but whether he, or some one authorized to act for him in reference to the suit, had notice and appeared, or if he did not appear, whether he was bound to appear or suffer judgment by default. And the true question in this case is, whether this corporation had such notice of the suit, and was so far subject to the jurisdiction and laws of Ohio, that it was bound to appear, or take the consequences of non-appearance." Then, after laying down the general proposition that a corporation created by one State can only transact business in another State by the consent, express or implied, of the latter State; and that such consent may be accompanied by such conditions as the latter State may see fit to impose, provided such conditions are not repugnant to the Constitution or laws of the United States, "or inconsistent with those rules of public law which secure the jurisdiction and authority of each State from encroachment by all others, or that principle of natural justice which forbids condemnation *374 without opportunity for defense" — the opinion proceeds as follows: "In this instance, one of the conditions imposed by Ohio was, in effect, that the agent who should reside in Ohio, and enter into contracts of insurance there in behalf of the foreign corporation, should also be deemed its agent to receive service of process in suits founded on such contracts. We find nothing in this provision either unreasonable in itself or in conflict with any principle of public law." Accordingly, it was held that the service on the agent of the foreign corporation was good, and that the judgment rendered by the State Court of Ohio was good and valid. It will be observed that the facts in the case just cited are somewhat different from those which appear in the case now under consideration, and, therefore, it is not direct authority on the point raised in this case. But we have cited it, at some length, for the purpose of showing the fundamental principles which lie at the bottom of all questions of this kind.
The next case cited by counsel for respondent which we shall notice is St Clair v. Cox,
The next case decided by the Supreme Court of the United States, which is cited by counsel for respondent, isCooper Manufacturing Co. v. Ferguson,
We have not deemed it necessary to comment upon the *378
case of Pennoyer v. Neff,
Nor do we propose to refer to the cases cited by counsel for respondent, from the Federal Reporter and from other States (with one exception), for two reasons: 1st. Because they are not decisions of Courts of final resort in questions of this kind. 2d. Because a consideration of such cases would unduly protract this opinion to an unreasonable length. The excepted case above referred to is the case ofColorado Iron Works v. Sierra Grande Mining Co., 15 Col., 499 — reported also in 22 Am. St. Rep., 433 — and the reason for making the exception is that it was cited as authority for the following proposition: "A single sale of machinery *379 within the State [of Colorado] by a foreign corporation does not constitute doing business, within the meaning of the statute," but an examination of the case will show that it does not sustain the above quoted proposition, if it is supposed to refer to the statute regulating the service of process upon a foreign corporation, for it manifestly refers to a different statute — sec. 260 of the Gen. Stat. of Colorado, declaring that: "Foreign corporations shall, before they are authorized or permitted to do any business in this State, make and file a certificate, signed by the president and secretary of such corporation, duly acknowledged, with the secretary of State, and in the office of the recorder of deeds in the county in which such business is carried on, designating the principal place where the business of such corporation shall be carried on in this State, and an authorized agent or agents in this State, residing at its principal place of business, upon whom process may be served." Whereas the statute prescribing the mode of serving a foreign corporation is found in sec. 40 of the Code of Civil Procedure, and reads as follows: "If the suit be against a foreign corporation, * * * service shall be made by delivering a copy of the writ to an agent, cashier, treasurer or secretary thereof; in the absence of such agent, cashier, treasurer or secretary, to any stockholder." The facts as reported in the case are substantially as follows: The plaintiff, a domestic corporation, doing business in the city of Denver, Colorado, contracted in writing with the defendant, a foreign corporation, engaged in mining in New Mexico, to manufacture, furnish and set up for the defendant in New Mexico certain machinery for the reduction of ore, for a stipulated price. The contract was performed by plaintiff, and large payments had been made on the contract, leaving, however, a considerable balance due on the same, for the recovery of which the action was brought. Service of the summons was made by delivering a copy thereof to one Samuel Alsop, a stockholder in the defendant corporation. This service was set aside by the Court below, and the plaintiff appealed. *380 In the opinion of the Supreme Court it is stated, that "the first and most important question to be determined is, whether appellants could be subjected to the jurisdiction of the Courts of this State," it being contended that the defendant, a foreign corporation, had not, by its acts and dealings in the State of Colorado, submitted itself to the jurisdiction of the Courts of that State, and that this cause could not there be tried and determined. This contention was based upon the conceded fact that the defendant had not complied with the provisions of sec. 260 of the Gen. Stat. of Colorado above referred to, forbidding foreign corporations from doing business in that State until they had complied with the provisions of said section. The Court, however, declined to sustain such contention, holding that a single purchase of machinery in Colorado, cannot be regarded as doing business "in this State, as contemplated in such section" (italics ours). The Court then proceeded to inquire whether the State Court had obtained jurisdiction of the defendant by the service upon Alsop; and after setting out the provisions of sec. 40 of the Code of Civil Procedure, as quoted above, used this language: "We conclude, therefore, that the contracting of the debt in question was a sufficient doing business within this State to render the corporation amenable to the Courts of this State, if jurisdiction could be obtained by service of process as provided in sec. 40 of the Code." And after finding as a fact (which was contested by appellant), that Alsop was a stockholder of the defendant corporation at the time he was served with the summons, held that such service was sufficient to bring the defendant within the jurisdiction of the State, and reversed the finding of the Circuit Court to the contrary. So that the case just considered is really in favor of rather than opposed to the view which we adopt.
We may also cite the case of Ford v. Calhoun,
As we have seen above, and as is held in the case last cited, the character of the agency depends upon the inquiry whether the agent can be regarded as the representative of the corporation in respect to the transaction out of which the suit arises. The practical inquiry, therefore, is whether George F. Schminke was the representative of the defendant corporation in this State, in regard to the transaction out of which this controversy arose. This must be determined by an examination of the undisputed testimony in the case, proceeding largely, and in fact entirely, from the defendant corporation itself. It must be remembered that the Circuit Judge did not find that Schminke was not the agent of the defendant; and, indeed, could not have so found without totally disregarding all of the testimony in the case. All that he found was that Schminke was not, in his opinion, "an agent, in the sense in which `any agent' is used in the Code;" and this was a conclusion of law, based upon his construction of the meaning of the words, "any agent," as *383 used in the Code, and was not a finding of fact at all, except that his phraseology implies that he found as a fact that Schminke was an agent of the defendant company, but that according to his construction of the language of the Code, he was not such an agent as the Code contemplated. This Court is, therefore, at liberty to consider and determine for itself, from the undisputed testimony in the case, whether Geo. F. Schminke must be regarded as such a representative of the defendant corporation, in reference to the transaction out of which this action arose, as would, under the decisions of the Supreme Court of the United States, justify the service of the summons upon Schminke. It seems to us that the letters of the defendant corporation, used at the hearing of this motion below, fully show that Schminke, when served with the summons in this State, was here as the representative of the defendant corporation in the very transaction out of which this controversy arose. In the first letter, under date of 23d October, 1900, which shows on its face to have been written in reply to a letter from plaintiff to defendant, of the 6th of October, 1900, which was not offered in evidence, but its tenor may be inferred from the reply, to have been a notification or complaint of the deficiency in the machinery; the defendant says amongst other things: "We have written our Mr. George F. Schminke, who will be in Abbeville now in about ten days, and we will get a full report from him," and expresses the hope that plaintiff "will bear with us" for a while. To this letter plaintiff replied by letter dated 27th of October, 1900, in which, after stating that plaintiff was taking steps to buy a new machine, as they could not afford to be delayed any longer in the matter, the following language is used: "Now, in consideration of what you say in your last about sending your Mr. Schminke to Abbeville by the 3d proximo, we will defer buying the machine above referred to until the 5th proximo, provided you write us at once that your authorized representative will be in Abbeville by the above date, with power to act, so that we may be assured of a speedy settlement." To this letter *384 defendant replied, under date of 29th October, 1900, in which, after saying that they had telegraphed "our Mr. Geo. F. Schminke," asking him to wire defendant when he would be in Abbeville, and after saying that they had no doubt that Schminke would be able to reach Abbeville not later than the 5th of November, c., used this language: "We trust that you will defer action on this matter until you give us an opportunity to look over the ground for ourselves, whichwe will do when our Mr. Schminke arrives in Abbeville." And again on the 1st of November, 1900, the defendant wrote plaintiff: "Our Mr. G.F. Schminke will be in Abbeville on the 5th inst.; and we are writing him fully to-day regarding the situation there." If the language which we have quoted above, especially that which we have italicized, does not show that Schminke was sent to Abbeville as therepresentative of defendant in relation to the very matter in dispute between the parties, then we are at a loss to conceive what language could show more conclusively that fact. If so, then the service of the summons upon Schminke, while in Abbeville, for the purpose of representing the defendant corporation in the very matter in dispute between the parties, would be held by the Supreme Court of the United States, even apart from our own Code of Procedure, a valid service upon the defendant corporation. For, as said by Mr. Justice Field, in St. Clair v. Cox, at p. 359: "While service upon an agent of a foreign corporation will not be deemed sufficient unless he represents the corporation in the State where such service is made; yet if he is the representative of the corporation in the State at the time the service is made, such service would be sufficient; and this representation implies that the corporation does business, or has business, in the State, for the transaction of which it sends or appoints an agent there." We are of opinion, therefore, that service upon the agent of the defendant corporation, while in this State for the purpose of attending to the business of the corporation here, in any view that may be taken of the case. was *385 a good service, and that the Circuit Judge erred in holding otherwise.
The judgment of this Court is, that the order of the Circuit Judge setting aside the service of the summons in this case, and dismissing the case for want of jurisdiction, be reversed, and that the case be remanded to the Circuit Court for Abbeville County for such further proceedings as may be necessary, with leave to the defendant to serve its answer within twenty days after written notice to the counsel who represented the defendant at the hearing of the motion to set aside the service of the summons of the filing of theremittitur in this case in the Circuit Court for Abbeville County.