135 A. 755 | Pa. | 1926
Argued December 6, 1926. This appeal raises the question of jurisdiction of the State over foreign corporations. The summons was served in Philadelphia on the Delaware and Hudson Company through an agent. Appellee is a New York corporation, where its principal office is located. It is registered with the state officer, pursuant to the Act of June 8, 1911, P. L. 710.
It operates a railroad in the northeast section of the State, but has neither tracks nor roadbed in Philadelphia County. For ten years rooms were rented in an office building for an agency, known as the General Southern Freight Agent. The doors and windows display the "D. H." sign, and the stationery, letterheads, envelopes, etc., used is the official stationery of that *243 company. The telephone is in the company name. The rooms were occupied by a general agent, who employed seven subordinates, four of whom were attached to the Philadelphia territory, and three to the southern district. All employees were paid from the home office in New York.
The principal work or business transacted in Philadelphia was the solicitation of freight. This agency covers Pennsylvania east of Harrisburg, and extends south to Florida. From it, during 1925, originated one million out of twenty-two million tons of freight. How much of this tonnage came from Philadelphia County or this agency in Pennsylvania does not appear. Complaints as to service may be received here and forwarded to New York; these in turn are referred back to communicate the result to the shipper or consignee as the case might be. Lost freight may be traced through this office. In exceptional cases, freight charges and adjustments of freight are received and forwarded to New York. The freight incoming or outbound must pass over other carriers' lines and these adjustments may be made directly through these carriers.
No freight is actually handled, nor are bills of lading. Contracts are not made on account of freight, all must go to the principal office in New York. It is conceded appellee was engaged in commerce of both classes.
At common law a corporation could be sued only in the territorial jurisdiction where it had its legal domicile: Bank of Augusta v. Earle, 13 Pet. 519, 586; Eline v. Western Maryland Ry. Co.,
Before a state may compel the corporation of another state to submit to its jurisdiction, or before a corporation may legally be in another state for the purpose of service of process, it must be present in the state by the act of some one authorized to represent it: Rosenberg Co. v. Curtis Brown Co.,
The fact that a foreign corporation is engaged solely in interstate commerce does not prevent its being sued in our courts or becoming amenable to our laws. If what they are doing, whether intrastate or interstate, amounts to a "doing business" within the state, the requirements of the Fourteenth Amendment to the federal Constitution are satisfied: International Harvester Co. v. Kentucky,
Where a foreign corporation is in fact doing business in the state as that term is understood, it is immaterial what the commerce may be; they are "here" within our jurisdiction. Decisions relating to taxing, licensing or to state laws that impede the free flow of interstate commerce do not control the question of service of process. As stated by Mr. Justice BRANDEIS in Davis v. Farmers Coöperative Co.,
The state, however, does not possess an unlimited right to impose its jurisdiction on foreign corporations. If its acts are not sufficient to constitute "doing business" they cannot be held. A state has no power to render a personal judgment against a foreign corporation "not doing business within the state": International Harvester Co. v. Kentucky, supra; Davis v. Farmers Coöperative Co., supra; Chipman, Ltd., v. Jeffery Co., supra; Green v. Chicago, Burlington Quincy Ry. Co.,
It is admitted appellee was doing business in a certain part of the State, and had registered in compliance with our Act of 1911. Plaintiff might have brought his action in Luzerne County, where the accident happened, serving the secretary of the Commonwealth. He chose, however, to proceed under section 6 of the Act of April 8, 1851, P. L. 353, which provides that suit may be brought against a foreign corporation in any county *246 where it "shall have an agency, or transact any business . . . . . . in this Commonwealth, and the writ may be served upon the president, cashier, agent, chief or any other clerk, or upon any directors or agent of such . . . . . . corporation within such county." It has been definitely established that this act was not repealed by the Act of 1911, supra, and that suit may be brought under the provisions of either of them: Eline v. Western Maryland Ry. Co., supra.
Where a foreign corporation is doing business in the State and has complied with the law as to registration, the place where the action is to be instituted in the State is a matter for our legislature to determine. The due process of the Fourteenth Amendment in this respect does not extend beyond the fact of doing business within the State. Our State acts, however, as to both domestic and foreign corporations, require "doing business" in the county where suit is brought before jurisdiction can be acquired: Gengenbach v. Willow Grove Park Co.,
It is here admitted that all the elements except the fifth, the most important, are present in this case. The phrase "shall have an agency," in the Act of 1851, supra, has been interpreted by this court as referring to branch offices or agencies for the transaction of the corporation's business: Parke v. The Commonwealth Insurance Co.,
In addition to what we first stated as to solicitation of freight and office work connected therewith, the general agent occasionally acted as a messenger for shippers who request rerouting merchandise already shipped. He communicated the shipper's wish to the operating department. The shipper could have the connecting carrier do this just as well. As agent he might be helpful in ascertaining whether the shipment had reached defendant's lines, but the connecting carrier could also do this. He had no authority to settle any claims either *248 for or against the company. Once a year he received a check from the shipper in adjustment of freight charges, and once in three years he delivered to a claimant a check for goods lost or injured. The latter acts are occasional and incidental acts. What is the combined effect of all these acts, or does solicitation of business and its subsequent receipt in this State amount to "doing business"?
Appellant argues that in soliciting freight, the service of the railroad company is sold; when the freight is delivered to the connecting carriers, it is tantamount to a delivery to the defendant; when the freight charges are paid either by the consignor or the consignee, it was payment to the defendant for the service rendered that had its origin in Philadelphia County. The argument has force. This court has been careful to distinguish between acts which are in aid of a main purpose, and those necessary to its existence. The former are collateral or incidental, while the latter are direct. A railroad cannot exist as such unless it carries freight and passengers, but it is not necessary to establish soliciting agencies to secure either. That is self-evident; agencies to solicit, multiplied as competition increased. They are used as information or advertising bureaus. True, contracts may follow such acts, but these contracts executed constitute the business. Mr. Justice SADLER, in Gengenback v. Willow Grove Park Co., supra, states the law as to domestic corporations, and the Chief Justice, in Eline v. Western Maryland Ry. Co., supra, as to foreign corporations. Solicitation of business is not "doing business" within the Act of 1851. The minor acts, related above, of business courtesy not compulsory do not affect the main question; nor do the cases of Lobb v. Pennsylvania Cement Co.,
Considering the case from the viewpoint of the federal authorities, if we follow the Green Case, supra, we would hold that the acts do not measure up to "doing business." There the railroad was all outside of the state, and, as an incident to its business, freight and passenger traffic was solicited in other parts of the country. For this purpose an agent was employed who had an office in that territory, whose business was to secure passengers and freight. He employed clerks and traveling agents who sold no tickets, and received no payment for transportation of freight. Instead, the agent procured from a connecting railroad an order which gave to the customer the right to receive a ticket over his principal's line; and, as to freight, in some cases bills of lading covering the principal's line were issued by the first carrier to the shipper. The court there held that, although the defendant was doing considerable business of a certain kind, the business shown was nothing more than that of solicitation, not sufficient to constitute 'doing business' in the sense that liability to service is incurred: Rosenberg Co. v. Curtis Brown Co.,
Mr. Justice DAY, in the International Harvester Case, supra, in construing Mr. Justice MOODY'S opinion in the Green Case, says it is an extreme case. It was not overruled and has since been quoted as authority in Minnesota Assn. v. Benn,
The judgment of the court below is affirmed.
Mr. Justice FRAZER dissented.