Reynolds v. Missouri, Kansas & Texas Railway Co.
224 Mass. 379
Mass.
1916
Check Treatment
Rugg, C. J.

The question at issue in this-case is the jurisdictional one, whether service of process has been made upon the defendant railway company, who hereafter will be referred to as the defendant.

The facts are these. The Missouri, Kansas and Texas Railway Company is a corporation organized under the laws of Kansas. Its lines of railroad are located in Missouri, Kansas, Oklahoma, Texas, and perhaps in other States, but none in Massachusetts. In 1912, it entered into an agreement whereby George E. Marsters, a resident within this Commonwealth, was to represent its railway system as New England passenger agent, with headquarters in Boston, his compensation to consist of a commission on all revenue derived from passenger tickets sold in the six New England States, but without expense to it for office rent, advertising or travelling expenses. Thereupon, it sent him stationery with this printing: *383"Missouri, Kansas 8s Texas Railway System. New England Passenger Agency, 248 Washington Street, Boston. W. S. St. George, Gen. Passenger Agent, St. Louis, Mo. Geo. E. Marsters, New England Passenger Agent.” Notice of this appointment was sent out by the railway company, which advertised him generally as its New England passenger agent. He was consulted by its officials in regard to passenger business. He was furnished with a frank for telegraphing on railroad business. He sold tickets for and reserved seats and berths in cars of the Pullman Company running over the defendant’s railroad system, and used his telegraph frank which he was authorized to use only on the business of the railway company in connection with these transactions, although he was agent for the Pullman Company. In a comparatively few instances he issued prepaid orders for the transportation of passengers beginning at some point on the defendant’s railroad system, to be exchanged for a ticket to be delivered at the points indicated, to be honored by the railway company. A form of prepaid order was furnished him by the defendant for that purpose. The money received from this source was sent by Marsters directly to the defendant. Local ticket agents in Boston conferred with him whenever they wanted information respecting the defendant’s railroad system, or when they wanted a communication sent to it about its business, and he transmitted such communications. In some instances complaints about transportation were presented to him, which he took up with the railway company. Marsters paid the rent of his place of business himself, and conducted there a large business in “Tickets and Tours” on his own account. He advertised upon his windows and walls the names " of many railroads and steamship lines, including in a prominent place that of the defendant railway company. He does not have for sale at his office any tickets of the defendant railway company, but sells through his arrangement with other railroad companies tickets issued by such railroads, which contain coupons for passage to points on or over the system of the defendant. Tickets constantly are sold by Marsters and other persons within this State, to which are attached coupons entitling the traveller to transportation over the lines of the defendant railway company without further validation. It is his duty to influence travellers to use the system of the defendant railway company and to exert this influ*384«nee throughout the New England States. He renders no accounts to the company except for the prepaid orders. He is paid his monthly percentage on New England sales. At the Washington Street place of business he is conducting his own business in some respects for the benefit of the defendant railway company. In conclusion the trial judge found that “Marsters is held out by the defendant railway as an agent for it at Boston, and ... is doing the acts which St. 1913, c. 257, contemplates as constituting an engaging in or soliciting business in this Commonwealth by a foreign corporation. I, therefore, find said defendant is engaging in business within this Commonwealth.” Most of these facts have been found by the trial judge, but as only one witness testified, and apparently the trial judge did not distrust his testimony in any respect, we have treated his testimony as true and included in this statement a few facts not stated in the judge’s findings, but shown by the testimony and supporting his conclusion. See Lindsey v. Bird, 193 Mass. 200; Harvey-Watts Co. v. Worcester Umbrella Co. 193 Mass. 138.

The precise point to be decided is whether the defendant railway company was “engaged in or soliciting business in this Commonwealth” within the meaning of the pertinent statute.* The question involved is a federal one upon which the decisions of the United States Supreme Court are controlling. That court has said that “each case of this kind must depend upon its own facts. ” Washington-Virginia Railway v. Real Estate Trust Co. 238 U. S. 185, 186. That court has not undertaken to formulate any general rule defining what transactions are essential to the doing of business in the sense which will render the one conducting it liable to service of process. It has gone no further than to saythat as to corporations “the business must be such in character and extent as to warrant *385the inference that the corporation has subjected itself to the jurisdiction and laws of the district in which it is served.” St. Louis Southwestern Railway v. Alexander, 227 U. S. 218, 227. In that case the facts were that the name under which the defendant did business was on the door of an office in New York, together with the name of persons designated as a general freight and passenger ' agent and a travelling freight agent. Through one of these agents, •before action was brought, the plaintiff had some negotiations and correspondence touching his claim and its settlement, whichreached and were considered by the executive officers of the defendant. This was held to be the transaction of business in behalf of the defendant in such manner as to make it liable to the service of process in respect of that matter in New York.

The case at bar seems to us to fall within the principle and the facts of the Alexander case. Marsters confessedly was the New England passenger agent advertised by the defendant as such, to whom others in this neighborhood looked for information respecting travel and accommodations to be had upon the defendant’s railway system. He used the defendant’s telegraphic frank for that business. He received money for transportation orders on the defendant’s line and accounted for such money to the defendant. He was also constantly striving to direct travel from all New England territory over the defendant’s railroad system. He took up complaints as to service with executive officers of the defendant. While the case at bar possesses all the elements of doing business revealed in the Alexander record, there are present some factors lacking in that case. Tickets good over the defendant’s railroad system, attached as coupons to other tickets, were sold not only by Marsters (although not in his capacity as agent for the defendant) but by others within this State. The amount of revenue derived from these sales is not stated. The selling of tickets for passenger transportation is an important source of income to a railroad. The selling of such tickets accepted as good without further countersigning or stamping can only be done by authority of the defendant. Possession of such authority indicates a kind of agency. The importance of this branch of the defendant’s business depends somewhat upon its magnitude. But the inference seems fair from the general testimony of Marsters that it is considerable. The selling of tickets good over the lines of a foreign railway corporation by agents of *386other corporations does not, standing alone, constitute the doing of business by the foreign corporation within the State of sale of the tickets. Peterson v. Chicago, Rock Island & Pacific Railway, 205 U. S. 364, 394. But, considered in connection with the other circumstances, it is entitled to some weight. All in all, Marsters performed a service which was regarded as important. Judged by the compensation paid to him, it was worth fifteen per cent of all the revenue coming from passenger tickets sold in New England for the defendant railroad system. Correspondence as to complaints, advice as to passenger business, and other activities are outside a simple solicitation of business. While many of these elements alone might be held not to be a doing of business, we think that, grouped in combination, they constitute a doing of business within the Commonwealth sufficient to subject it to the service of process. International Harvester Co. v. Kentucky, 234 U. S. 579.

The case at bar seems to us distinguishable from Green v. Chicago, Burlington & Quincy Railway, 205 U. S. 530. There the office was hired in Pennsylvania by the defendant, but the solicitation of business and the selling of prepaid orders entitling the holder when reaching Chicago to receive a ticket over the railroad of the defendant was all that was done in that State. There are absent all the other factors present in the case at bar, while payment of office rent is the only one not disclosed here and present there. W. S. Tyler Co. v. Ludlow-Saylor Wire Co. 236 U. S. 723, and Peterson v. Chicago, Rock Island & Pacific Railway, 205 U. S. 364, 394, fall in the same class as the Green case, and are wanting in features found here which seem to throw the case at bar on the other side of the line. The mere solicitation of business by a foreign corporation without more commonly has been held not to be the doing of business within a State. Berger v. Pennsylvania Railroad, 27 R. I. 583. Booz v. Texas & Pacific Railway, 250 Ill. 376, 381. Arrow Lumber & Shingle Co. v. Union Pacific Railroad, 53 Wash. 629. These and other like cases generally have been decided in the absence of a State statute expressly providing that for purpose of services of process the solicitation of business shall constitute a doing of business. See, however, Mechanical Appliance Co. v. Castleman, 215 U. S. 437, 442. It is not necessary in the present case to decide whether such a statute would be constitutional, for the reason that the facts show a doing of business *387in the sense in which those words are used in Goldey v. Morning News, 156 U. S. 518, Green v. Chicago, Burlington & Quincy Railway, 205 U. S. 530, St. Louis Southwestern Railway v. Alexander, 227 U. S. 218, and other cases of the United States Supreme Court.

Therefore, we conclude that the finding of fact that the defendant railway company was doing business within the Commonwealth was right.

In its broader aspect the question is presented whether St. 1913, c. 257, is constitutional. The circumstance that the business transacted by the defendant was wholly interstate in its nature is of no consequence in this connection. International Harvester Co. v. Kentucky, 234 U. S. 579. It is not necessary to discuss how great may be the effect of a State statute declaring certain conduct by a foreign corporation to constitute the transaction of business which would not be held to constitute the transaction of business apart from the statute. It is enough to say that the facts in the case at bar plainly bring the defendant within the terms of the statute. The statute is constitutional as applied to these facts because in our opinion, as already stated, they constitute a doing of business within the rule of the Alexander case.

The service of process here was in accordance with the terms of the statute. It was made both upon Marsters as the agent and upon a stockholder of the defendant.

While service upon a stockholder or even upon a director of the defendant resident within the Commonwealth, in accordance with R. L. c. 167, § 36, standing alone might be disregarded if the corporation transacted no business within the State, Riverside & Dan River Cotton Mills v. Menefee, 237 U. S. 189, when it is found that the corporation is transacting business within the Commonwealth, then such a service made in accordance with a statute offends no constitutional provision and constitutes adequate service of process. Pennsylvania Lumbermen’s Mutual Fire Ins. Co. v. Meyer, 197 U. S. 407. St. Louis Southwestern Railway v. Alexander, 227 U. S. 218, 226.

The motion of the plaintiff to be allowed to offer additional evidence after the hearing had been closed, but before the rendition of a decision, was addressed to the discretion of the trial judge and cannot be revised. The denial of the motion and the appeal from it presents no question of law. Briggs v. Adams, 220 Mass. 262.

*388There has been no waiver of the plea to the jurisdiction which seasonably was filed by the railway company. The argument of the question whether a preliminary injunction ought to issue, was made with reservation of all rights under the plea to the jurisdiction. The argument was invited by the judge. He made a finding to the effect that counsel plainly relied on the jurisdictional point and did not waive it, and by permission argued other points only in case the court should be against him on the question of jurisdiction. This finding was right. The conduct of the defendant’s attorney constituted no waiver of the plea to the jurisdiction and was far from being in substance a general appearance. In principle this branch of the case is indistinguishable from O’Loughlin v. Bird, 128 Mass. 600, Lowrie v. Castle, 198 Mass. 82, 90, Cheshire National Bank v. Jaynes, ante, 14, and cases there collected. The plaintiff’s exceptions and appeal upon this point are without merit.

The question whether the cause of action set out in the plaintiff’s bill is one which can be sued upon in this State because related to the business done here, is not presented on this report and is not considered. See Simon v. Southern Railway, 236 U. S. 115, 130.

The plaintiff’s appeal from the interlocutory orders striking out part of the plaintiff’s replication to the plea has not been argued and is treated as waived. It follows that the plaintiff’s exceptions are overruled, the order overruling the defendant’s plea to the jurisdiction is affirmed, and other interlocutory orders are affirmed.

So ordered.

Notes

St. 1913, c. 257, amending St. 1907, c. 332, § 1, is as follows: “In an action against a foreign corporation having its principal or a usual place of business within this Commonwealth, or which is engaged in or soliciting business in this Commonwealth, permanently or temporarily, and with or without a usual place of business therein, service of the summons or writ may be made according to the provisions of section thirty-six of chapter one hundred and sixty-seven of the Revised Laws for service in actions against domestic corporations; and such service shall be of the same effect and validity as if made upon the commissioner of corporations.”