173 N.W. 468 | N.D. | 1919
Lead Opinion
The complaint alleges that the defendant, Middlewest Grain Company, is a foreign corporation; that the defendant W. H. Hogy, was a licensed warehouseman, owning and operating an elevator at Burlington in this state, and engaged in buying or shipping grain for profit at said place of business; that between August 1, 1915, and July 1, 1916, the plaintiff stored in said elevator 3334-bushels of wheat, for which wheat the said Hogy issued storage receipts in form and substance as prescribed by law; that thereafter the defendant, Middlewest Grain Company, with the knowledge, consent and connivance of said Hogy, took and converted to its own use 3334-bushels of the same kind and quality of grain set forth in the storage receipts held by the plaintiff, not leaving sufficient grain in said elevator to cover the outstanding storage receipts which had been so issued to said plaintiff; that plaintiff’s storage receipts are outstanding and unpaid; that plaintiff has tendered a return of .said storage tickets to said Hogy and demanded of him a return of the grain stored, or a like quantity of the same kind and quality of- grain, and that such demand was refused; that plaintiff has also demanded of the defendant, Mid-dlewest Grain Company, the possession of the said grain, and that such demand was -refused.
On February 2, 1918, the sheriff of Ward county served the sum
In opposition to said affidavit of Jourgen Olson the plaintiff submitted the affidavit of plaintiff’s attorney. Such affidavit set forth the sheriff’s return, and averred that said Olson then was and at all times since the incorporation of the Middlewest Grain Company had been its president; that said Olson is a resident of Ward county, North Dakota, and at all the times mentioned in the complaint was and still is the managing agent, and in reality the manager, of said corporation, directing the major operations thereof from his office in Minot. The motion to set aside the service came on for hearing upon these two affidavits. Plaintiff states in his brief on this appeal: • “At the time the motion came on for hearing plaintiff’s counsel pointed out that even if the allegations denying the agency were time still Olson was admitted to be the president of the corporation, and as the cause of
Later the plaintiff filed the affidavit of his attorney, and the affidavit of one Meckton. The affidavit of plaintiff’s attorney is to the effect that on June 1, 1916, said Jourgen Olson procured from one H. T. Hogy, a chattel mortgage, running from said Hogy to said Middle-west Grain Company, to secure the sum of $13,608.24; that on April 4, 1916, said Olson secured from one W. J. Evans a chattel mortgage (running to said Middlewest Grain Company) on an elevator at Niobe, North Dakota, to secure .the payment of $6,500. The affidavit of Eleckton is to the effect that he is the manager of the Niobe Elevator Company, and as such handles its correspondence; that among other letters received by said company since March, 1916, are certain letters apparently written by said Jourgen Olson, in behalf of the said Middle-west Grain Company, from Minot, North Dakota; “that during the year 1916, said Niobe Farmers’ Elevator Company shipped grain to said Middlewest Grain Company, at Minneapolis, and that during the spring of 1917, affiant with other officers of the Niobe Farmers’ Elevator Company, went to Minot, North Dakota ... to the office of said Jourgen Olson, in Minot, and there arranged for the shipment of grain to- said Middlewest Grain Company;” that said Jourgen Olson made the arrangements leading up to, and represented the Mid-dlewest Grain Company at the time of, the giving of “such security.” The letters referred to in Fleckton’s affidavit are attached to and made a part of his affidavit. The first three letters are written upon the letterheads of Jourgen Olson & Company of Minot, North Dakota, and signed-by-Jourgen Olson. There is a printed statement at the top of the letterhead, relating to the Jourgen Olson & Company, to the effect that Jourgen Olson & Company has a capital of $500,000; that it offers, “banks and the investing public choice first farm mortgages, also short-time paper maturing six months to one year;” and that it has “money to town to banlcs- on their certificates of deposit at all times and to all classes'- of business men for six months to one year.”
“As I wrote you some time ago from Minneapolis in reference to. the shipment of grain to the Middlewest Grain Company and as it was our understanding that in consideration of carrying your notes on your elevator that in that event you would ship your grain to the Middlewest Grain Company and if for any reason it was not handled satisfactorily then in that event you would pay us the notes.
“Up to the present time we do not seem to have received one car, and for that reason we cannot help but feel that you are doing business at other places, and if the case is that you were not satisfied with our business we prefer to have you pay up the $5,000 we carry on you.”
• The third letter bears date, September 29, 1917. It refers to the outstanding note of the Niobe Elevator Company, and the understanding with which it was taken. The fourth letter is written upon the letterhead of the Middlewest Grain Company. It is dated, Minneapolis, Minnesota, December 31, 1917. It makes reference to another letter, said to have been written from Minot. It further refers to some indebtedness of the Niobe Elevator Company to Wyman Company, and, also, to a certain carload of flax. The fifth letter bears date, February 2, 1918. It is written upon the letterhead of Jourgen Olson & Company, and signed by Jourgen Olson., The first two-paragraphs in the letter read:
“We acknowledge receipt of your check for $225 which we have applied on your $5,000 note.
*216 “Now in reference to oats, barley, and feed, I suggest that you write direct to the Middlewest Grain Company of Minneapolis and of course they can give you any and all information that you want as I do not know very much about that.”
The remainder of the letter relates to some grain which apparently the Niobe Farmers’ Elevator Company desires to purchase in Canada. Reference is also made to the $5,000 loan and the desire to have all the shipments from the Niobe Elevator Company during the coming-year, if the latter company is given the financial aid it needs in operating its elevator.
Upon the filing of these two affidavits, the trial court apparently announced its intention to deny the motion, but the record contains no written order to that effect. Thereafter the defendant submitted to the court the affidavits of Jourgen Olson, Louis Enger, and N. J. Thorson. The court thereupon issued an order citing plaintiff to show cause why the former announcement should not be revoked, and the service of the summons set aside. The affidavit of Jourgen Olson is to the effect that on January 1, 1918, he sold and transferred all of his interest in the Western Grain Company to one N. J. Thorson; that since the date of said transfer said Olson has been and is wholly without authority to represent or act for the said Western Grain Company in any capacity whatsoever. The affidavit further states that the $5,000 note of the Niobe Elevator Company, which was originally given in 1916, is and always “has been owned by and in the possession of this affiant, Jourgen Olson, and was never the property of the Mid-dlewest Grain Company, the defendant corporation, and that affiant personally advanced the $5,000 to the said Niobe Farmers’ Elevator Company.” The affidavit further states that the letter to the Niobe Elevator Company, dated February 2, 1918, “was written in behalf of Jourgen Olson & Company, and not in behalf of the Middlewest Grain Company.” The affidavit of N. J. Thorson is to the effect that he is the president of the. Middlewest Grain Company; that on January 1, 1918, he became the owner and holder of said stock and the president and director of said Middlewest Grain Company; that said Jourgen Olson on January 1, 1918, ceased to be an officer or director of said
“The summons shall be served by delivering a copy thereof as follows :
“ ‘(5) If the defendant is a foreign corporation, ... to the secretary of state, . . . or to the president, secretary, cashier, treasurer, a director or managing agent thereof, if within the state, doing business for the defendant.
“ ‘(6) In all cases when a foreign corporation . . . shall not have appointed either the secretary of state or commissioner of insurance, as the case may be, as its lawful attorney upon whom service of process may be made, and such foreign corporation . . . cannot be personally served with such process according to the provisions of subdivision 5 of this section, it shall be lawful to serve such process on any person who shall be found within this state acting as the agent of, or doing business for, such corporation. . . . But the service provided for in this subdivision can be made upon a foreign corporation, joint stock company, or association only when it has property within the state or the cause of action arose therein.’ ” (Oomp. Laws 1913, subds. 5 and 6, § 1426.)
It is well settled that (subject to constitutional limitations) a state may prescribe the terms upon which alone it will permit foreign corporations to do business within its borders. And where a state imposes as a condition, on which a foreign corporation may do business therein, that it accept as sufficient the service of process upon certain designated officers or agents within the state, a foreign corporation subsequently doing business in the state is deemed to assent to such condition, and to be bound by the service of process in the manner-specified by the statute. 11 Enc. U. S. Sup. Ct. Rep. 308. Of course, the consent of the corporation to be bound by such service of process is not an actual consent, but an implied one. It has been said by the highest authority to be “a mere fiction, justified by holding the corporation estopped to set up its own wrong as a defense.” Pennsylvania F. Ins. Co. v. Gold Issue Min. & Mill. Co. 243 U. S. 93, 96, 61 L. ed. 610, 616, 31 Sup. Ct. Rep. 344. Hence, the power of the state to
The Federal Supreme Court has held that three conditions are necessary to give a court jurisdiction to render a personal judgment against a foreign corporation: “First, it must appear that the corporation was carrying on its business in the state where process was served on its agent; second, that the business was transacted or managed by some agent or officer appointed by or representing the corporation in such state; third, the existence of some local law making such corporation amenable to suit there as a condition, express or implied, of doing business in the state.” Connecticut Mut. L. Ins. Co. v. Spratley, 172 U. S. 602, 618, 43 L. ed. 569, 574, 19 Sup. Ct. Rep. 308. The same court has also said that in order to be “doing business” so as to render a foreign corporation subject to service of process in a given jurisdiction, the transactions “must be of such character and extent as to warrant the inference that the corporation has subjected itself to the jurisdiction and the laws” of that jurisdiction. St. Louis S. W. R. Co. v. Alexander, 227 U. S. 218, 57 L. ed. 486, 33 Sup. Ct. Rep. 245, Ann. Cas. 1915B, 77. Or, as was stated in a more recent decision: “A foreign corporation is amenable to process to enforce a personal liability, in the absence of consent, only if it is doing business within the state in such manner and to such extent as to warrant the inference that it is present there.” And even if it is doing business within the state, the process will be valid only if served upon some authorized agent.” Philadelphia & R. R. Co. v. McKibbin, 243 U. S. 264, 61 L. ed. 710, 37 Sup. Ct. Rep. 280.
The same great tribunal has also said that a state law prescribing the mode in which, and designating the agents or officers on whom, process may be served, “must be reasonable, and the service provided for should be only upon such agents as may be properly deemed repre
The statutes of this state relative to the service of process upon agents or officers of foreign corporations were enacted in view of and recognized the fundamental principles which we have just considered. Subdivision 5, § 7426, supra, provides that a summons in a civil action may be served upon a foreign corporation by delivering a copy thereof “to ■ the president, secretary, cashier, treasurer, a director or managing agent thereof, if within the state, doing business for the defendant.” Subdivision 6, of that -section provides that in all cases where a foreign corporation has failed to appoint an agent on whom process may be served as required by the statute, and where service cannot be made under subdivision 5, “it shall be lawful to serve such process on any person who shall be found within this state acting as the agent of, or doing business for, such corporation. . . . But the service provided for in this subdivision can be made upon a foreign corporation . . . only when it has property within the state or the cause of action arose therein.” These provisions speak for themselves. Under their express terms the person upon whom service is made (whether an officer or agent) must be within the state acting as agent of, or doing business for, the corporation at the time service is made. This is the construction which the trial court placed upon these provisions. And we are wholly unable to understand how they are susceptible of any other construction.
The question to be determined therefore is whether the trial court erred in holding that Jourgen Olson was not an officer or agent of the defendant corporation, and as such rating, or doing business, for it within this state, at the time the summons in this action was served upon him.
Of course, the presumption is that the order appealed from was properly entered, and the appellant has the burden of overcoming that presumption. For “it is a general rule of wide application that an appellate court will indulge all reasonable presumptions in favor of the
Appellant assumes that the complaint in this case shows that the alleged cause of action arose in this state. While we do not deem the matter of any controlling importance, we fail to find any basis for the assumption. The complaint alleges that the Western Grain Company is a foreign corporation, but it nowhere alleges that it is or has been doing- business in this state. Neither does it allege that the alleged conversion took place in this state. In this connection it may be noted that there is nothing in the affidavits submitted by the plaintiff tending to show that Jourgen Olson had any connection with the particular transaction upon which plaintiff seeks to recover in this case. It may also be noted that all the affidavits, — of plaintiff as well as of the defendant, — tend to show that the defendant is a commission firm, engaged in selling in the Minnesota terminal markets, grain consigned to it by shippers for that purpose. There is nothing in the record to indicate that the grain for which this suit is brought did not come into the possession of the defendant through shipment thereof to it to the place where it was so engaged in receiving and disposing of grain.
In the case at bar, the positive affidavits of Jourgen Olson and N. J. Thorson are to the effect that all of Olson’s stock in the Middlewest Grain Company was sold and transferred to Thorson on January 1, 1918; that Thorson immediately succeeded Olson as a director and president of the company, and that Olson ceased to be an officer or agent of the defendant company on the day the stock was transferred and has not since had any authority to represent it. These statements are also to some extent corroborated by the affidavit of Enger. If the statements in Olson’s and Thorson’s affidavits are untrue, then' these men are guilty of perjury. Leaving all question of morality on one side, is it at all reasonable to believe that these men would have com
Appellant contends that the trial court erred in reopening the matter and permitting the defendant to introduce the affidavits of Olson, Thorson, and Enger. The contention is without merit. It will bo remembered that upon the first hearing the plaintiff asked for and was granted permission to submit certain additional proof. Some time thereafter plaintiff submitted certain affidavits. Ordinary fair play would entitle defendant some opportunity to rebut the affidavits so submitted. No formal order bad been entered denying tbe defendant’s motion, although tbe court apparently bad intimated that it deemed tbe affidavits submitted by tbe plaintiff sufficient to justify a denial of tbe motion. But even if a formal order bad in fact been entered tbe court would have bad undoubted power to vacate such order. 28 Cyc. 1518. It might even have entertained a second motion to set aside tbe service of tbe summons without first formally vacating its former order. Clopton v. Clopton, 10 N. D. 569, 573, 574, 88 Am. St. Rep. 749, 88 N. W. 562; Fisk v. Hicks, 29 S. D. 399, 137 N. W. 424, Ann. Cas. 1914D, 971, 19 R. C. L. 676.
It was suggested upon tbe oral argument that defendant’s appearance was in effect a general one, and therefore conferred jurisdiction under tbe rule announced by tbe supreme court of Wisconsin in Grantier v. Rosescrance, 27 Wis. 466. In tbe case cited tbe defendant moved to set aside a default judgment on tbe grounds: (1) That the record did not show a legal service of tbe summons, and that in fact such service bad not been made; and (2) that tbe complaint failed to state a cause of action. Tbe court ruled that tbe defendant by challenging tbe sufficiency of tbe complaint made a general appearance, and thereby conferred jurisdiction. It will be noted that in tbe Wisconsin case tbe defendant did not limit bis appearance to tbe question of want of jurisdiction over bis person, but went further and specifically asked tbe court to determine the sufficiency of tbe complaint. Of
It follows from what has been said that the order appealed from must be affirmed. It is so ordered.
Concurrence Opinion
(concurring). This case presents no serious question. It relates only to tbe service of a summons on a foreign corporation. By statute such service may be made by delivering a copy of tbe summons to tbe president, secretary, treasurer, or managing agent, if witbin tbe state and doing business for tbe corporation. Section 1226, subd. 5. Now tbe sheriff of Ward county attempted to serve tbe summons and returned tbe same with a certificate that be bad served it on tbe defendant by delivering to and leaving with Jourgen Olson, tbe president and managing agent of tbe defendant, a true copy. Tbe certificate ivas insufficient and so were tbe affidavits in regard to such service, because it was not shown that- Olson was doing business for tbe corporation, and it was clearly shown that at tbe time of such attempted service be bad ceased to be an officer of tbe company. Hence tbe service was properly held void.