Perkins v. Benguet Consol. Min. Co.

• Citation: 48 O.O. 87,107 N.E.2d 203,158 Ohio St. 145
• Decision Date: 09 July 1952
• Docket Number: Nos. 32161,32162,s. 32161
• Parties: , 48 O.O. 87 PERKINS v. BENGUET CONSOL. MIN. CO. et al. (two cases).
• Court: United States State Supreme Court of Ohio

Page 145

158 Ohio St. 145

107 N.E.2d 203, 48 O.O. 87

PERKINS v. BENGUET CONSOL. MIN. CO. et al. (two cases).

Nos. 32161, 32162.

Supreme Court of Ohio.

July 9, 1952.

Syllabus by the Court.

1. Federal due process neither prohibits nor compels the taking of jurisdiction by the courts of a state in an action against a foreign corporation where the cause did not arise in that state or relate to the corporation's activities therein. (Paragraph one of the syllabus in the case of Perkins v. Benguet Consolidated Mining Co., 155 Ohio St. 116, 98 N.E.2d 33, overruled.

2. Where jurisdiction is not limited by statute to cause of action arising within this state, an action on a transitory cause may be maintained in the courts of this state by a nonresident against a foreign corporation doing business here, although the cause did not arise here or relate to the corporation's business transacted here.

3. A foreign mining corporation is doing business in this state where its local activities include: continuous maintenance of an office by the president who is the general manager and also one of the principal stockholders, continuous maintenance of two active bank accounts since 1942 with substantial balances of company funds, business correspondence, stock transfers, payment of salaries, directors' meetings, the purchase of machinery and supplies for use in the company's business, and supervision of the company's policy in rehabilitating its properties.

The plaintiff, a nonresident of this state, instituted these actions in the Court of Common Pleas of Clermont County against several defendants, one of which is the Benguet Consolidated Mining Company, a foreign corporation organized under the law of the Philippine Islands where it owns and has operated profitable gold and silver mines.

In the first case the plaintiff seeks to recover dividends claimed to be due her as a stockholder; and in the second she asks damages by reason of the company's failure to issue certificates to her for 120,000 shares of its stock.

Neither of the alleged causes of action arose in this state.

In each case the summons for this corporation was served on its president in Clermont County where he resided and also maintained an office. He was, as well, the general manager and one of the principal stockholders of the company which had not appointed a statutory agent on whom process could be served.

In each case the Court of Common Pleas granted the company's motion to quash the service of summons. 99 N.E.2d 515.

On appeals to the Court of Appeals on questions of law, the judgments of the trial court were affirmed. 88 Ohio App. 118, 95 N.E.2d 5.

This court, with two members dissenting, affirmed the judgments of the Court of Appeals. 155 Ohio St. 116, 98 N.E.2d 33.

In the Supreme Court of the United States the two cases were consolidated, and a petition for a writ of certiorari was granted for the purpose of determining whether federal due process required the quashing of the servide of summons. 342 U.S. 808, 72 S.Ct. 33.

That court held 'that the Fourteenth Amendment leaves Ohio free to take or decline jurisdiction over the corporation.' With two members of that court dissenting, the judgments were vacated and the causes were remanded to this court for 'consideration of the circumstances which, under the law of Ohiio, ultimately will determine whether the courts of that State will choose to take jurisdiction over the corporation'. 342 U.S. 437, 72 S.Ct. 413, 415.

Gorman, Silversteen & Davis, Cincinnati, for appellant.

Ely, White & Davidson, Nichols, Speidel & Nichols, Batavia, and Lucien H. Mercier, Washington, D. C., for appellees.

WEYGANDT, Chief Justice.

The Supreme Court of the United States held that federal due process neither prohibits nor compels the taking of jurisdiction by the courts of a state in an action against a foreign corporation where the cause did not arise in that state or relate to the corporation's activities therein.

Hence, in the absence of some other theory, this holding requires the overruling of paragraph one of the syllabus in the previous decision of a majority of this court in these causes, 155 Ohio St. 116, 98 N.E.2d 33, which was based on the sole ground that federal due process prohibits the exercise of such jurisdiction by a state court.

With this federal difficulty now removed, should the courts of this state assume jurisdiction in an action against a foreign corporation under the particular facts of these cases?

Although there is a division of authority on the subject, the majority rule and the better reasoned view are well summarized in the following statement in 23 American Jurisprudence, 502, Section 496:

'The weight of modern authority supports the proposition that where jurisdiction is not limited by statute to causes of action arising within the state, an action may be maintained against a foreign corporation in the state or federal courts within a state in which it is doing business, by a resident or a nonresident of the state or by another foreign corporation on any transitory cause of action, even though the cause of action arose neither within the state nor out of the business done by the corporation therein. In other words, a foreign corporation may be sued on a transitory cause of action in any jurisdiction...