Sullivan v. Sullivan Timber Co.

• Decision Date: 05 June 1894
• Citation: 15 So. 941,103 Ala. 371
• Parties: SULLIVAN v. SULLIVAN TIMBER CO.
• Court: Alabama Supreme Court

15 So. 941

103 Ala. 371

SULLIVAN v. SULLIVAN TIMBER CO.

Supreme Court of Alabama

June 5, 1894

Appeal from circuit court, Conecuh county; John R. Tyson, Judge.

Action by J. J. Sullivan against the Sullivan Timber Company on an account stated, and for work and labor done. From a judgment for defendant, plaintiff appeals. Affirmed.

Stallworth & Burnett and Troy & Watts, for appellant.

Gregory L. & H. T. Smith, for appellee.

BRICKELL C.J.

The appellant, by summons and complaint, commenced an action against the appellee, averred to be a corporation under the laws of the state of Florida, doing business in the county of Conecuh. Service of summons was made in that county upon J W. Black, the president of the company. The complaint contains two counts,-the one, for an account stated; the other, for work and labor done. The defendant appeared and pleaded in abatement, alleging that it had a known place of business, and an authorized agent therein, in the city of Mobile, and that, at the time of the commencement of the suit, it was not doing business in the county of Conecuh. To this plea, the plaintiff demurred, assigning three causes. The first and second were that the plea did not negative the fact that the defendant was doing business in the county of Conecuh when the contracts were made on which the suit is founded; the third, that it did not appear from the plea that the court had not local jurisdiction of the action. The demurrer was overruled, and issue was taken on the plea. The defendant introduced evidence showing that its principal place of business was in Mobile, where it had authorized agents. It owned a sawmill in the county of Escambia, and a railroad running therefrom, three or four miles into the county of Conecuh, and a derrick in that county, which had been used for the purpose of supplying the mill with logs. In consequence of litigation, the operation of the mill had been stopped prior to the commencement of the suit, and after its stoppage the company had not done any business in Conecuh county. The plaintiff introduced evidence showing that, at or about the time of the commencement of the suit, the defendant had a person in possession and taking care of the railroad and derrick; and that, subsequent to the commencement of the suit, an agent of the company paid the taxes on its property in Conecuh county. This was all the evidence, and, at the request of the defendant, the court instructed the jury to find the issue for the defendant. The rulings on the demurrer and the instruction given to the jury form the matter of the assignments of error. It is apparent the case draws in question the construction of the last clause of the fourth section of the fourteenth article of the constitution, and of the statute (Code § 2642). The section of the constitution in its entirety, reads: "No foreign corporation shall do any business in this state without having at least one known place of business, and an authorized agent or agents therein and such corporation may be sued in any county where it does business by service of process on an agent anywhere in the state." The statute reads: "A foreign or domestic corporation may be sued in any county in which it does business by agent." The section of the constitution and the statute (which, in so far as it relates to foreign corporations, is merely affirmatory of the constitution) are remedial, intended to supply defects or correct mischiefs in the pre-existing state of the law; and in their construction we are to consider what was the law before the constitution was adopted and prior to the enactment of the statute, what were the defects it was intended to supply or the mischiefs it was intended to correct.

By the common law, to maintain a personal action against a corporation, there must have been service of process upon its head or principal officer within the jurisdiction of the sovereignty from which corporate existence was derived. The officer upon whom, in the sovereignty of its creation, service could be legally effected, binding the corporation, it may be, could be found in another jurisdiction, but he was not deemed to bear with him his official functions, and service upon him there effected would not bind or affect the corporation. Whatever of legal proceedings could be pursued against the corporation elsewhere than within the sovereignty of its creation must have been authorized by legislation of the forum in which such proceedings were instituted. St. Clair v. Cox, 106 U.S. 354, 1 S.Ct. 354; Aldrich v. Anchor Coal & Development Co. (Or.) 32 P. 756; McQueen v. Manufacturing Co., 16 Johns. 5; Peckham v. Haverhill, 16 Pick. 274, 286; Moulin v. Insurance Co., 24 N. J. Law, 244; Camden Rolling-Mill Co. v. Swede Iron Co., 32 N. J. Law, 15. Upon principles of comity, there was acquiescence in the maintenance of suits in this state by foreign corporations, and the making by them of such contracts as they had by the law of their creation capacity to make, if thereby our own laws or public policy were not offended. Lucas v. Bank, 2 Stew. (Ala.) 147; Hitchcock v. Bank, 7 Ala. 386; Mayor v. Rogers, 10 Ala. 37; Telegraph Co. v. Pleasants, 46 Ala. 641; Eslava v. Ames Co., 47 Ala. 384; Exporting Co. v. Locke, 50 Ala. 332; Thorington v. Gould, 59 Ala. 461. But there was no statute providing for or regulating suits against them, except the statute authorizing the issue of an attachment for the seizure of property belonging to them, found in the state. Code 1852, § 2513; Rev. Code 1867, § 2938; Code 1876, § 3263; Code 1886, § 2940.

Private corporations created and organized for the transaction of business and the derivation of pecuniary profits are in this country, it is said, mainly the growth of the last 75 years. In McKim v. Odom (1828) 3 Bland, 407-418, it was said by Bland, Ch., that no instance of such a corporation in colonial times could be found. Cook, Stock, Stockh. & Corp Law, § 1. The increasing number of such corporations, and the variety and extent of the business they were created and organized to transact, their presence by agents, either by acquiescence or by legislative permission, in other states, in the exercise of their general powers, making contracts, acquiring and disposing of property, rendered the rules of the common law to which we have referred the source of frequent inconvenience and injustice, compelling a modification or relaxation of them. The principle came to be accepted that if a foreign corporation sent its agents into another state, and there, by acquiescence or legislative permission of the state, engaged in the transaction of business, upon all causes of action there arising it became subject to suit in such mode as the law of the state provided, or, if there was no special provision for such suits, in the mode prescribed for suits against domestic corporations of like charcater. Moulin v. Insurance Co., supra; St. Clair v. Cox, supra; Railroad Co. v. Harris, 12 Wall. 65; Railway Co. v. Whitton, 13 Wall. 270; Ex parte Schollenberger, 96 U.S. 369; Aldrich v. Anchor Coal & Development Co., supra. But if the corporation was not engaged in the transaction of business, or had not property within the state which could be reached by attachment, though its head or principal officer may there have had his personal residence, or may have been found there casually, there could not be a valid service of process compelling it to appear; and, without a voluntary appearance, there could be no judgment rendered which would bind or affect it. The period of time at which it must have been engaged in the transaction of business within the state, to authorize a personal action against it, by the service of process on its principal officer or other agent, was the commencement of the suit. The fact that, at some time anterior, the corporation may have been engaged in business or may have had agents within the state, and though, at such time, the contract was made, or the cause of action arose, on which the suit was founded, was not controlling or material. The modification or relaxation of the common-law principle was rested upon the theory that the corporation, by entering the state by its agents, engaging in the transaction of its corporate business, gave to itself "a species of locality in the nature of a domicile," and was presumed to have assented to be sued in the courts of the state, as if it were a domestic corporation. Rolling-Mill Co. v. Swede Iron Co., supra; Aldrich v. Anchor Coal & Development Co., supra; Ex parte Schollenberger, supra. As is well observed in Latimer v. Railway Co., 43 Mo. 109: "The well established and settled principle is that, to give a court jurisdiction, a real defendant, against whom the plaintiff is entitled to a judgment, must be found and served with process within the limits of the jurisdiction, or some property or chose in action of his must be found there upon which the court can proceed in rem. Every attempt on the part of one nation or state, by its legislature, to grant jurisdiction to its courts over persons or property not within its territory, is regarded elsewhere as mere usurpation, and all judicial proceedings in virtue thereof are held utterly void. This proceeds upon the known maxim, 'Extra territorium jus dicenti impune non paretur."' The presence of the corporation by its agents, engaged in the transaction of corporate business, was...