13 F. 827 | U.S. Circuit Court for the District of Northern Iowa | 1882
The plaintiff contends that a foreign corporation cannot in any case plead the statuto of limitations in this state because it is a non-resident of the state. It is an artificial person existing only by the law of its creation. It has no existence and can have no existence outside of the state by whose laws it has been created. It cannot change its abode; it is incapable of emigration; its fixed residence is in the state of its creation. It may have agents in other states; it may do business in them; it may, by the laws of such states, sue and be sued therein; hut it can have but one residence, which must bo and is in the state to which it owes its existence.
This is the plaintiff’s argument, but does it not proceed upon an erroneous assumption? Can it he truly said that a corporation has really a residence anywhere ? It is said that a corporation is an artificial person, and by a natural transition of thought a placo of residence is ascribed to this artificial person. But is it not by a mere fiction of law that personality, and residence in place, are ascribed to a corporation? What is a corporation? Would it not be more accu
Since, then, a corporation cannot be said, except in legal fiction, to have residence anywhere, non-residence cannot, in a strict sense, be ascribed to it. In construing the word “non-residence,” therefore, as used in section 2533, we must consider, not so much what may or may not be the “residence” of a corporation in the abstract, as what the legislature intended by the use of the word “non-resident” in the connection in which we find it. We must not stick in the bark; not confine our view solely to the meaning of the word “non-resident, ” but take in the whole scope of this legislation. We must consider the matter, not in the abstract, but in the concrete.
Seeing, then, that corporations cannot be said to have literally any residence in a place, and that they cannot be known and dealt with
A strict and literal interpretation of section 2533 would, as against foreign corporations, rob it of all reason; for the sole reason for providing that the “time during which the defendant is a non-resident of the state shall not be included in computing any of the periods of limitation,” is to save the rights of the plaintiff, where, by reason of the defendant’s absence, the plaintiff cannot get service upon him. But the facilities for suing foreign corporations doing business in Iowa are greater than those which the law furnishes against individuals residing here. A foreign corporation may be sued in any county where its agent may be found carrying on its business, and it cannot do business without agents. An individual must be sued in the county of bis residence. To say, therefore, that a plaintiff may sue a foreign corporation anywhere in tho state, and at any time after the cause of action accrues and yet that the corporation is to be deemed a nonresident, and may not, therefore, plead the statute of limitations, is to make the statute purely arbitrary. It is equivalent to saying that the corporation shall be deemed resident, or at least present, for the purpose of being sued, but not rosidentVitli respect to this defense of the suit. This construction of the statute, while wholly unnecessary to protect the plaintiff’s rights, would work infinite detriment to foreign corporations doing business in Iowa; for with this construction they might be sued upon stale claims resting in parol, or for. personal injuries 10 or 20 years after the cause of action accrued, and long after the witnesses of such transactions have passed away. Thus would the very policy an'd purpose of the limitation law be subverted by a too literal interpretation of one of its own provisions. The legislature could surely not have intended that the statute of limitations should he so construed as to annul and defeat tho very purpose for which it ■was enacted
But does it follow from this doctrine that a corporation may not have a legal residence, through its agents, in a state other than the one of its creation, with the assent of the state in which it is so present, for business or other purposes ? May it not, when so present, make contracts, commit torts, sue and be sued? And if so, why may it not be deemed to have a legal residence or presence, if yon will, so far as the statute of limitations is concerned? Is it a strained construction of the word “residence,” as used in our statute, which leads to a conclusion at once so just and rational ? Indeed, the supreme court of the United States, in Ex parte Schollenberger,
The chief justice, speaking for the court, says:
“ The language of this court in Railroad Co. v. Harris, 12 Wall. 65, through Mr. Justice Swayne, is; ‘It [a corporation] cannot migrate, but it may exercise its authority in a foreign territory upon such conditions as may be prescribed by the place. One of these conditions may be that it shall consent to be sued there. If it do business there it will be presumed to have assented, and will be bound accordingly.’ ”
See Bank of Augusta v. Earle, 13 Pet. 588; Ohio & Miss. R. Co. v. Wheeler, 1 Black, 295; Runyan v. Coster’s Lessee, 14 Pet. 129; Louisville, C. & C. R. Co. v. Letson, 2 How. 497; Covington Drawbridge Co. v. Shepherd, 20 How. 227, 233; Paul v. Virginia, 8 Wall. 168, 181.
We repeat that the true question is not what is to be deemed the residence of a corporation in the abstract, but rather in what sense did the legislature of Iowa use the word “non-resident” in the section under consideration ? This question is by no means answered, as counsel seem to suppose, by the decision of the supreme court of the United States in Tioga R. Co. v. Blossburg & C. R. Co. 20 Wall. 137. The court in this case simply follows the courts of the state of New York in expounding the statute law of that state, which decisions, it may be conceded, sustain the plaintiff’s position in the present ease. Par, however, from expressing any approval of the decisions of the New York courts, Mr. Justice Bradley, in delivering the opinion, intimates that the supreme court of the United States considered them on principle unsound, and Mr. Justice Miller, in his dissenting opinion, emphatically condemns the doctrine of the New York courts. Mr. Justice Bradley, delivering the opinion, says:
“ The courts of New York have decided that a foreign corporation cannot avail itself of the statute of limitations of that state. These decisions upon construction of the statute are binding upon us, whatever we may think of their unsoundness upon general principles.”
The case in the supreme court of the United States most resembling the present case, in which that court, not being bound by any state decision, gives its independent judgment, was the Ex. Co. v.
The circuit court of the district of Nebraska instructed the jury as follows: '
“ If you find that the defendant had a managing agent within the state at the time of the loss, then the statute began to run from that time, and if it had such agent in the state for the next five years after the loss, then this action is barred, but otherwise it is not. In other words, to bar this action the plaintiff must have been able, for five years before the suit was brought, to have sued the defendant in this state, and conmelled it to answer the suit by a service upon a managing agent therein.”
The supreme court of the United States affirmed the correctness of this instruction, saying they could see no error in the charge, and this is in accord with the Iowa and Illinois adjudications. The decisions of the state courts upon the questions under consideration are in conflict. Indeed, upon what question of the least doubt are they not in conflict ? The decisions of the courts of New York are, as we have seen, opposed to the view we have taken above. Those of Illinois, on the contrary, fully sustain our position. See Bank of N. A. v. C., D. & V. R. Co. 82 Ill. 495; Pennsylvania Co. v. Sloan, 1 Bradw. 6 4; Bristol v. Chicago & A. R. Co. 15 Ill. 436.
But it is, of course, to the decisions of the supreme court of Iowa that we must chiefly look in expounding the statutes of this state; and if there was any decision of that tribunal directly upon the question before us, it would be our duty to follow it. There is, perhaps, no such decision to guide us, but the whole tenor and scope of the state supreme court decisions favor strongly the conclusion at which we have arrived. Thus the supreme court of Iowa, in Baldwin v. M. & M. R. Co. 5 Iowa, 519, cite with approval the language and doctrine of Bristol v. C., A. & R. R. Co. 15 Ill. 438, as follows:
“ The residence of a corporation, if it can be said to have a residence, is necessarily where it exercises corporate functions. It dwells in the place where its business is done. It is located where its franchises are exercised. It is present where it is engaged in the prosecution of the corporate enterprise. This corporation has a legal residence in any county in which it operates the road or exercises corporate powers and privileges. In legal contemplation, it resides in the counties through which its road passes, and in which it transacts its business.”
“ The material question is whether the defendants had a residence in Henry comity. And this must be regarded as settled by the case of Baldwin v. M. & M. R. Co. 5 Iowa, 518. It was there held that a corporation like a railway company resides in counties through which the road passes and in which it transacts its business; that it has a legal residence where it exercises corporate powers and privileges.”
It is no answer to this to say that these cases relate to Iowá corporations, since the question is, what is the true interpretation of the words “residence” and “non-residence,” in our legislation, when applied to railway corporations ? Our legislation has distinctly recognized the right of foreign railway corporations to run and operate their roads and exercise their franchises in Iowa, and this surely brings them within the doctrine as to what constitutes legal residence laid down in the cases cited. See, also, Penley v. Waterhouse, 1 Iowa, 498, and Savage v. Scott, 45 Iowa, 132. These cases, though dissimilar in their facts to the present case, and therefore not directly in point, do, nevertheless, favor distinctly the doctrine that the true test of legal residence is the fact that the defendant is within the jurisdiction and subject to legal process.
In Cobb v. Ill. Cent. Ry. Co. 38 Iowa, 608, the defendant pleaded the statute of limitations and the court sustained the plea, but it is said that the “question now under consideration was not raised, considered, or decided.” This may be true as far as counsel were concerned in that case, but it would seem that when the question was directly made by the plea of the statute, the court must have passed upon it