Central R. R. & Banking Co. v. Georgia Construction & Investment Co.

| S.C. | Mar 21, 1890

The opinion of the court was delivered by

Mr. Justice MoIver.

The plaintiffs in the several eases above mentioned commenced their actions, on money demands, against the defendant company, and on the same day sued out warrants of attachment, under which the sheriff levied on and seized a considerable amount of personal property, consisting, to a large extent, of steel rails, found in this State, alleged to be the property of the defendant company. In each of the cases, the Pennsylvania Steel Company intervened by petition, setting up a claim to the steel rails upon which the attachments had been levied, and asking that the same be adjudged to it, and the sheriff directed to deliver the same to the petitioner. To these petitions, plaintiffs answered, denying the material allegations contained in the petitions, and averring that said steel rails were the property of the defendant company. The defendant made no appearance to any of these actions, except as hereinafter stated, but, in each of the three cases first mentioned in the title, gave notice of a motion to vacate the attachments upon the several grounds set out in the “Case,” which will hereinafter be considered. In the fourth case, that of the National Bank of Greenville, no objection was made to the regularity of the proceedings therein, and, therefore, that case may be dismissed from our consideration until we come to consider one of the points raised by the appeal of the Pennsylvania Steel Company.

The motions on behalf of the defendant company, to vacate the attachments, were based upon the complaints and certain affidavits, all of which are set out in the “Case.” The Pennsylvania Steel Company also gave notice of a motion to set aside the complaints, and that the attachments be dissolved, upon the ground that the court had no jurisdiction; and, failing in that, then that an issue be made up to try the question as to who had the right to the steel rails. These motions were heard by his honor, Judge Hudson, who having announced that he would refuse the motion to discharge the attachments, the attorneys for the defendant company, saying that they appeared only for this special purpose, moved the court, without previous notice, to dismiss the complaints in each of the three cases first named in the title, upon the ground that it appeared upon the face of the complaints that the court was without jurisdiction. This motion was likewise refused, and Judge Hudson filed his decree, giving the grounds for his refusal of the several motions to vacate the attachments and dismiss the complaints, but granting the motion of the Pennsylvania Steel Company to make up an issue to try the question of the title to the steel rails, directing that said company should be the actor in such issue. From this decree or order, the defendant company, as well as the Pennsylvania Steel Company, appeal upon the several grounds set out in the record, which need not be set out here, as they, together with copies of the complaints, affidavits, and notices of motions, together with the decree or order of Judge Hudson, should be embraced in the report of this case.

Section 423 of the Code provides that “an action against a corporation created by or under the laws of any other State, government, or country may be brought in the Circuit Court (1) by any resident of this State, for any cause of action ; (2) by a plaintiff not a resident of this State, when the cause of action shall have arisen, or the subject of the action shall be situated, within this State.” It seems to us very clear that the sole object of this provision was to limit the cases in which a non-resident plaintiff might sue a foreign corporation in the courts of this State to the two classes mentioned in the second subdivision of the section, viz., to cases in which the cause of action has arisen in this State, or to cases in which the subject of the action shall be situated within this State. The fact, that no express words of exclusion or limitation are used, cannot affect the question, for any other view would render the section wholly nugatory. Why give a nonresident the right to sue a foreign corporation in certain specified cases, if such suit could be brought in any class of cases ? And why the marked distinction between the right of a resident and a non resident to sue a foreign corporation in the courts of this State, whereby the former is allowed to bring such suit in any case, while the latter can sue in two specified cases ? It seems to us too plain for argument, that the effect of that section is to declare that a non resident can sue a foreign corporation only in the two cases specified, and hence, when such an action is brought, it cannot be maintained unless it appears either that the cause of action had arisen in this State, or that the subject of the action is situated within this State. Now, as an action cannot, as formerly, be commenced by attachment, which is now only a provisional remedy in aid of an action, it follows, necessarily, that if the action fails for want of jurisdiction, the provisional remedy by attachment, in aid of such action, must fall with it.

: One of the counsel for respondent, however, contends that section 248 of the Code contains no limitation as to the character of persons, so far. as residence is concerned, who may obtain the remedy by attachment, and, reading that section in connection with section 423, above quoted, there is no restriction upon the right of a non-resident to obtain an attachment against a foreign corporation in any case; and certain language of this court, in the case of Ex parte Dickinson in re Sheldon v. Blauvelt, 29 S. C., 465, is quoted to sustain that view. In the first place, it is hot correct to say that there is no limitation in the terms of section 248, for the remedy there provided for is given only in cases where an action has been commenced; meaning, of course, an action of which the court can take jurisdiction. As to the quotation from Sheldon v. Blauvelt, it is, in fact, from the syllabus, and not from the opinion ; and the paragraph in the opinion from which the reporter, doubtless, extracted his syllabus, concludes in these words, speaking of the attachment law : “Its provisions seem to be broad enough to cover any one who may he entitled to institute an action in the courts of this State” — implying very plainly, by the words now italicized, that an action legally instituted is a necessary condition precedent to the right to obtain an attachment, and hence, if a non-resident undertakes to institute an action against a foreign corporation, in which neither his cause of action arose within this State, nor is the subject of the action situated here, he is not entitled to obtain a warrant of attachment, because he is not entitled to institute such an action.

The Circuit Judge seems to have adopted our view of the scope and effect of section 423 of the Code, for he says: “These causes of action arose out of the State, except that of Correll & Emonson, which, to a large extent, arose within this State, being for labor performed, and contracts made, in the County of Greenville. These attachment proceedings must show that the subject of the action is situated within this State.”' And he then proceeds to consider the question whether the subjects of these actions were so situated, and reaches the conclusion that they were; that the subject of the actions was the property seized under the attachments.

The first and most material inquiry presented for our consideration is whether there was error in such conclusion. We think there was; for, whatever may be the precise definition of the words, “subject of the action,” we do not see how it is possible for the property, upon which the warrants of attachment were levied (which, of course, was after the action was commenced), to be regarded as the subject of the actions. If so, then clearly, until the attachments were levied, there were no subjects of the action; and if there was no subject, then there was no action. But, again, it seems to us that nothing can be plainer than that the subject of the action must be described, or at least mentioned, in the complaint; and yet, in these complaints there is not, and could not be, the slightest allusion to that which is. now claimed to be the subjects of the action. The subject of the action must necessarily be the subject of the complaint — the thing about which the plaintiff makes his complaint; and how that of which no mention is made in the complaint can be regarded as the subject of the action, it is impossible to conceive.

In these cases, the plaintiffs do not claim any right or title to, or interest in, the property upon which the attachments were levied; but, on the contrary, their whole proceeding is based upon the theory that it belongs to the defendant company, and their sole object is, not to recover possession of that property, but simply to obtain a prior lien thereon. Where a creditor sues his debtor, who owns a tract of land, upon an ordinary note, his object, may be, and often is, simply to obtain a prior lien on the land, not to recover the land; and in such a case, it could not for a moment be pretended that the land was the subject of that action. Upon the same principle, we do not see how it is possible to regard the property upon which these attachments were levied as the subjects of the actions, in aid of which the attachments were issued. These views are amply supported by the authorities cited in the arguments of the counsel for appellants.¹

It is urged, however, that, under this construction of section 423 of the Code, such section would be in violation of several sections of the Constitution of the United States, to wit, section 2, art. 4; section 10, art. 1; as well as of section 15, art. 1, of the Constitution of this State. It will be observed, that by the express terms of section 2, art. 4, of the Constitution of the United States, the privileges and immunities there secured are to the citizens of other States, and the provisions of the Code now under consideration relate only to residents — two different and distinct things — and hence there is no conflict. Rut, as this question has been so recently considered by this court in the recent case of Cummings v. Wingo (31 S. C., 428), it is not necessary to do more than refer to that case, which we regard as decisive of this question.

How it can be said that the provisions of section 423 of the Code conflict with section 10, art. 1, of the Constitution of the United States, which forbids legislation impairing the obligation of contracts, it is difficult to understand. The argument, as we understand it, is, that if the construction above indicated be adopted, then a foreign corporation, by transferring all of its property to this State, might secure absolute immunity from suit at the instance of its non-resident creditors, and thus the obligation of its contracts, made with such creditors beyond the limits of this State, would be not only impaired, but absolutely destroyed. In the first place, it may be answered that this result would flow, not from the legislation of this State, but from the acts of the one party and the omissions of the other. But, in addition to this, we are not prepared to admit that such a result as that apprehended would necessarily follow. It may be that, by proper allegations and proper proofs the non-resident creditor could show that the subject of the action was situated in this State; but in these cases, there are no such allegations and no such proofs.

Again, it is well settled that a corporation is the mere creature of the local law of the jurisdiction where it derives its existence, and has no absolute right of recognition, in any form, in any other jurisdiction. As is said by Mr. Justice Field in Paul v. Virginia, 8 Wall., at page 181: “The corporation, being the mere creation of local law, can have no legal existence beyond the limits of the sovereignty where created. * * * ‘It must dwell in the place of its creation, and cannot migrate to another sovereignty.’ The recognition of its existence even by other States, and the enforcements of its contracts made therein, depend purely upon the comity of those States — a comity which is never extended where the existence of the corporation, or the exercise of its powers, are prejudicial to their interests, or repugnant to their policy. Having no absolute right of recognition in other States, but depending for such recognition, and the enforcement of its contract, upon their assent, it follows, as a.matter of course, that such assent may be granted upon such terms and conditions as those States may think proper to impose.” This utterance of the tribunal of last resort, in all questions involving the construction of the Constitution of the United States, shows conclusively that a State may make such regulations in regard to foreign corporations as it deems best; may either exclude them altogether, or may place such'restrictions upon them as may be deemed best for the public welfare by the legislative department of the State.

Finally, it is contended that the view which we have adopted as to the construction of section 423 of the Code brings that section into conflict with section 15, art. 1, of the Constitution of this State, which declares that “all courts shall be public; and every person, for any injury that he may receive in his lands, goods, person, or reputation, shall have remedy, by due course of law and justice, administered without unnecessary delay.” In the first place, it may be said that in the actions now under consideration the plaintiffs are not seeking a remedy for any injuries received in their “lands, goods, person, or reputation,” but they are simply seeking to enforce the performance of contracts. The actions are ex contractu, not ex delicto, and hence the section relied on has no application. But, in addition to this, it is very manifest that the object of that section was, not to so extend the jurisdiction of the courts of this State as to throw open their doors to any person, from any quarter of the globe, to demand redress for injuries received anywhere, but simply to secure to the inhabitants of the State, for which the constitution was made, access to the courts for redress of any injury which they may have received.

It is argued, however, that the question now under consideration is concluded by what was said in the case of Bank v. Stelling, 31 S. C., at pages 366-7. In that case, the action was for the purpose of setting aside certain alleged fraudulent deeds of land situate in this State ; and, of course, those lands, which were the things sought to be affected by the action, were described in the complaint, and did constitute the subject of the action. To borrow the phrase of one of the counsel for appellants in this case, the lands there constituted “the theme of discourse” by the plaintiff in the complaint, and was the subject concerning which the action was brought. It is manifest that there is nothing in that case which lends any support to the view contended for here by counsel for respondents.

We think, therefore, that the Circuit Judge erred in holding that the property upon which the attachments were levied constituted the subjects of the action. From this, it follows that the judgment below must be reversed in the two cases first mentioned in the title, as there is no pretence that the cause of action in either of those two cases arose in this State.

In the third case, however, that of Correll & Emonson, it is contended that a part, at least, of the cause of action arose in this State,, and the Circuit Judge has so found; and, therefore, the next question to be considered is whether there was error in so holding. That question is somewhat a mixed question of law and fact; and, so far as the matter of fact is concerned, we are concluded by the finding below., These plaintiffs, in their complaint, state that they entered into a contract with the defendant company — where, is not stated — to do certain work on a railway extending from the city of Greenville, in this State, to the city of Knoxville, in the State of Tennessee; that, in pursuance of that contract, they did a large amount of work ; and the complaint contains a bill of particulars, setting forth that a considerable amount of the work was done in this State; and in their affidavit, made for the purpose of procuring a warrant of attachment, they say that they have a cause of action against the defendant company for work and labor performed, and materials furnished for said company. At the hearing of the motion to vacate the attachments, other affidavits were submitted, both on the part of the plaintiffs and the defendant company, in which there was some conflict as to some of the facts, and in which it appeared that a part of the claim of the plaintiffs was evidenced by notes executed in this State, but where payable did not appear. Under this state of facts, we cannot say that the Circuit Judge erred in holding that the cause of action in this case, to a large extent, arose within this State; and hence this action, as well as the attachment, issued in aid thereof, may be sustained to the extent, at least, which these plaintiffs may be able to show at the trial, that they have a cause of action which arose in this State.

The objections urged by the appellants, that the affidavits in this case “do not state causes of action, specifying the grounds thereof,” cannot be sustained. The contract under which the work was done — the fact that it was done, together with the bill of particulars accompanying the complaint — seems to be entirely sufficient.

It only remains to consider that part of the appeal of the Pennsylvania Steel Company which imputes error to the Circuit Judge in the mannér of framing the issue ordered to try the right to the steel rails; and this, as we understand it, is'the only branch of the appeal which affects the plaintiff in the case last mentioned in the title — the National Bank of Greenville v. the Georgia Construction & Investment Company. The gravamen of this complaint seems to be, that the attaching creditors, instead of the Pennsylvania Steel Company, should have been made the actors in such issue. We do not think so. We must assume that the property in question was found in the possession of the defendant company, and was seized by the sheriff, under the attachments, as the property of that company, and when the Pennsylvania Steel Company intervened by petition, setting up a claim to that property, they stood like any other plaintiff who is seeking to recover possession of personal property which had passed out of his possession ; and that company was, therefore, properly made the actor in such issue.

The judgment of this court is, that the judgment of the Circuit Court, in so far as it refused the motion to vacate the attachments sued out by the Central Railroad & Banking Company of Georgia, and by J. W. Fletcher, as trustee under the deed of assignment of Brown & Fortune, be reversed, but in so far as it refused the motion to vacate the attachments issued at the instance of Correll & Emonson, the same be affirmed; and it is further adjudged, that so much of said judgment as orders an issue to try the title to the steel rails, be so modified as to apply only to the cases of Correll & Emonson and the National Bank of Greenv.ille against the Georgia Construction & Investment Company, and, as so modified, that the same be affirmed.

1 1The authorities so cited are Chalmers v. Glenn, 18 S. C., 471; 1 Pom. Eq. Jur., § 109; 2 Wait Prac., 131, 134; Ex parte Dickinson, 29 S. C., 465 ; Cureton v. Dargan, 16 Id., 619 ; Holmes v. Bank, 18 Id., 32; Code, $£ 148, 423, 284, 248 ; Drake Attach., $ 228 ; 18 How., 218. — Reporter.