248 F. 970 | W.D. Tex. | 1918
(after stating the facts as above).
Art. 1830, par. 28. Foreign, private or public corporations, joint-stock companies or associations, not incorporated by the laws oí this state, and doing business within this state, may be sued in any court within this state having juridsiction over the subject-matter, in any county where the cause of action, or a part thereof, accrued, or in any county where such company may have an agency or representative, or in the county in which the principal office of such company may be situated; or, when the defendant corporation has no agent or representative in the stale, then in the county where the plaintiffs, or either of them, reside. Acts of 1887, p. 131.
Art. 1861. In any suit against a foreign, private or public corporation, joint-stock company or association or acting corporation or association, citation or other process may be served on the president, vice president, secretary or treasurer, or general manager, or upon any local agent within this state, of such corporation, joint-stock company or association, or acting corporation or association. Acts of 1885, p. 79.
Art. 1862. Service may be had on foreign corporations, having agents in this state, in addition to the means, now provided by law, by serving citation upon any train conductor who is engaged in handling trains for two or more railway corporations, whether said railroad corporations, are foreign or domestic corporations, if said conductor handles trains over foreign or domestic corporations’ track across the* state line of Texas, and on the track of a domestic railway corporation within the state of Texas, or upon any agent who has an office in Texas, and who sells tickets or makes contracts for the transportation of passengers or property over any line of railway or part thereof, or steamship or steamboat of any such foreign corporation or company. For the purpose of ob'tai ing service of citation on foreign railway corporations, conductors who are engaged in handling trains, and agents engaged in the sale of tickets or the making of contracts for the transportation of property, as described in this £ rtiele, are hereby designated as agents of said foreign corporations or companies upon whom citation may be served. Acts 1905, p. 30.
It is well settled that foreign corporations can be served with process within the state only when doing business therein, and that such service must be upon an agent who represents the corporation in such business. St. Clair v. Cox, 106 U. S. 350, 1 Sup. Ct. 354, 27 L. Ed. 222; Goldey v. Morning News, 156 U. S. 518, 15 Sup. Ct. 559, 39 L. Ed. 517; Conley v. Mathieson Alkali Works, 190 U. S. 406, 23 Sup. Ct. 728, 47 L. Ed. 1113; Peterson v. Chicago, Rock Island & Pacific Railway Company, 205 U. S. 364, 27 Sup. Ct. 513, 51 L. Ed. 841.
Therefore the question of service in tire state court may be divided into three propositions:
(1) Were the persons served such officers or agents of the Atchison Company as the statutes of the state provide may be served?
(3) If so did the persons served represent said Atchison Company in such business?
R. F. Gifford was in the employ of the Atchison Company as conductor, but performed no service for it in the state of Texas. He was also in the employ of the Rio Grande Company as conductor, and his train was operated over both lines, but on crossing the statG line into New Mexico he became the agent of the Atchison Company, and in crossing the state line into Texas he ceased to be the agent of that company and became the agent of the Rio Grande Company. As an essential to the validity of the service upon him it was necessary that he should at the time of service have been the representative of the Atchison Company in business then being done by it in Texas. This essential was lacking. Peterson v. Chicago, Rock Island & Pacific Railway Company, 205 U. S. 364, 27 Sup. Ct. 513, 51 L. Ed. 841.
Article 6406 of the Revised Statutes of Texas forbids the acquisition or ownership of any railroad within the state by any corporation except one chartered under the laws of the state; and section 6, article 10, of the Constitution of Texas forbids the consolidation of any railroad organized under the laws of the state, with any railroad organized under the laws of any other state or of the United States. Hence the organization of the Rio Grande Company and the operation of its line by it was in harmony with the policy of the state of Texas in such matters and consistent with the Constitution and the laws of the state. And if, as contended, the Atchison Company had in fact become the real owner of the Rio Grande Company’s railroad and was operating it as such owner, such ownership and operation was unlawful. However, if as a matter of fact the Atchison Company was the real owner and operator of the Rio' Grande Company’s railroad, whether lawfully or unlawfully it should be held that such fact constituted doing business in Texas and the service in the state court should be held to1 be valid. Cases may be found holding that where one corporation uses another corporation as a “mask” or a “dummy” to defraud, the person defrauded may sue the. former corporation for any damages he may thereby suffer.
The Rio Grande Company was a separate legal entity, possessing all the legal attributes of a valid railroad corporation. It had its own officers and board of directors, who had and exercised the immediate and exclusive supervision and control and management of its property and business. It had its own employés, its own treasury, and its own rules and regulations. It kept its own accounts, and had no relations with the Atchison Company inconsistent with its own management and proprietary interest. And there is no evidence that the Atchison Company owned any proprietary interest in the property of the Rio Grande Company or exercised, or attempted to exercise, any control or management over its business.
It is true that a large majority and possibly all the stock of the Rio Grande Company was owned by the Atchison Company, but this fact does not even tend to’ show that the-latter owned or controlled the property of the latter or gave it the right to control its business. The property of a corporation is owned by the corporate entity, and not by the owner or owners of its stock. This is true whether the stock is owned by two or more persons or only one, or whether it is owned by a natural person or by a corporation engaged in the same business. Cook on Corporations, § 709, and authorities therein cited; Peterson v. Chicago, Rock Island & Pacific Railway Company, 205 U. S. 364, 27 Sup. Ct. 513, 51 L. Ed. 841; Pullman Palace Car Co. v. Missouri Pacific Company, 115 U. S. 587, 6 Sup. Ct. 194, 29 L. Ed. 499; Conley v. Mathieson Alkali Works, 190 U. S. 406, 23 Sup. Ct. 728, 47 L. Ed. 1113.
The fact that the two corporations had the same president and had common agents and employés to a certain extent does not alter the case as the evidence showed they were paid in proportion to the business done for each company.
There are many decisions- — too numerous to be cited here — in which given statements of fact are discussed and held to show, or not to show, the doing of business by a corporation in a state, but I believe a careful examination of them with proper deductions will support the conclusion I have reached in this case upon- this point. One case I consider specially strong in support of my conclusion is Washington, Virginia Railway Co. v. Real Estate Trust Co., 238 U. S. 185, 35 Sup. Ct 818, 59 L. Ed. 1262.
In view of the foregoing opinion I hold that the judgment in the state court was rendered upon valid service, and is itself valid. Therefore the injunction prayed for should be denied, and judgment is rendered accordingly.