Bolton v. White Motor Co.

• Decision Date: 07 March 1940
• Docket Number: 6 Div. 492.
• Parties: BOLTON v. WHITE MOTOR CO.
• Court: Alabama Supreme Court

194 So. 510

239 Ala. 168

BOLTON v. WHITE MOTOR CO.

6 Div. 492.

Supreme Court of Alabama

March 7, 1940

Appeal from Circuit Court, Tuscaloosa County; Henry B. Foster Judge.

Action in assumpsit by Mallie Bolton against The White Motor Company. From a judgment sustaining defendant's plea in abatement, plaintiff appeals.

Affirmed.

DeGraffenried & McDuffie, of Tuscaloosa, for appellant.

McQueen & McQueen, of Tuscaloosa, for appellee.

BOULDIN Justice.

Mallie Bolton brought suit in assumpsit, in the circuit court of Tuscaloosa County, against The White Motor Company, a corporation.

The defendant pleaded in abatement, alleging defendant was a foreign corporation, had qualified to do business in Alabama with a known place of business in Birmingham, Jefferson County, and a designated agent in Birmingham, and was not doing business in Tuscaloosa County by agent when the suit was begun.

On a trial of this issue before the court without a jury the plea was sustained. Plaintiff appeals.

The evidence disclosed the following facts:

The White Motor Company is an Ohio corporation, with principal place of business in Cleveland, Ohio.

It qualified to do business as a foreign corporation in Alabama with principal place of business in Birmingham, designating as agent, I. B. Feagin, resident in Birmingham.

His position and title was "District Manager." The business of the company, through this agency, was the sale, or promotion of sales, of trucks and busses in this district. Tuscaloosa County was within this district.

From April 5, 1937, to May 3, 1938, the business in Tuscaloosa County was in the hands of a distributor or dealer under written contract. This dealer was a purchaser for re-sale, not an agent. But Birmingham sales agents came to Tuscaloosa County at times to assist in making sales. The company, however, reserved the right to sell directly to a limited line of customers. After the termination of the distributor's contract, May 3, 1938, such business as was done in Tuscaloosa County, was through one or more agents, resident in Birmingham. No office was maintained, nor resident agent, doing business in Tuscaloosa County. It was the duty of agents in Birmingham to promote the sales business in Tuscaloosa County. In fact, the Birmingham agent went into Tuscaloosa County some two or three times a year. About July 1, 1938, on request of a former customer in Tuscaloosa County, the district manager and a sales agent went to Tuscaloosa, and took an order for a truck. All such orders were directed to White Motor Company, Cleveland, Ohio, and were subject to approval and acceptance at the home office in Cleveland, and shipment made in interstate commerce direct to purchaser. This action was brought July 25, 1938.

The return of service as of July 25, 1938, being challenged by motion to quash, alias summons and complaint were issued August 31, and served September 2, 1938, on the designated agent.

Section 232 of our Constitution declares: "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 without filing with the secretary of state a certified copy of its articles of incorporation or association. Such corporation may be sued in any county where it does business, by service of process upon an agent anywhere in the state."

Our venue statute, Code, § 10471, declares: "A foreign or domestic corporation may be sued in any county in which it does business by agent, or was doing business by agent at the time the cause of action arose."

The Constitution is self-executing, mandatory and restrictive; limits the venue of an action against a foreign corporation which has qualified to do business in Alabama to a county where the corporation is doing business at the time of suit brought and service had. By its own force the Constitution strikes down the provision of the statute purporting to permit suits against a foreign corporation in a county where it was doing business at the time the cause of action arose. This clause of the statute is limited to actions against domestic corporations. Sullivan v. Sullivan Timber Co., 103 Ala. 371, 15 So. 941, 25 L.R.A. 543; General Motors Acceptance Corporation v. Home Loan & Finance Co. 218 Ala. 681, 120 So. 165; May, Sheriff et al. v. Strickland, 235 Ala. 482, 180 So. 93; Ex Parte Kemp et al., 232 Ala. 434, 168 So. 147.

What is doing business in a given state or county is a question giving rise to much litigation in this state and throughout the country. Since it involves the question of corporate presence essential to jurisdiction in a personal action a question of due process of law under the Federal Constitution often arises.

In Beard v. Union & American Publishing Company, 71 Ala. 60, it was held that soliciting and receiving subscriptions to a newspaper, published in another state, collecting and remitting the proceeds, was not doing business in Alabama, within the meaning of our constitutional provision forbidding a corporation to do business in Alabama without a known place of business and an authorized agent therein. The exercise of some of the functions for which the corporation was created was declared the test.

In the leading case of Sullivan v. Sullivan Timber Co., supra, the Beard case is reviewed with approval, and it was again declared [103 Ala. 371, 15 So. 944, 25 L.R.A. 543]: "The mere presence of an agent within the state, or within a particular county, authorized to transact particular business, not involving an exercise of the corporate powers or franchises, not a part of the business the corporation was created and organized to transact, is not within the proper meaning of the phrases 'do business' or 'does business,' as employed in the constitution and the statute. 2 Beach, Priv. Corp. §§ 416, 890; D.S. Morgan & Co. v. White, 101 Ind. 413; Clews v. Woodstock Iron Co. [ C.C.], 44 F. 31; Bentlif v. L. & C. F. Corp. [ C.C.], [44 F.] 667; Carpenter v. Westinghouse Air-Brake Co. [ C.C.], 32 F. 434; St. Louis Wire-Mill Co. v. Consolidated Barb-Wire Co. [ C.C.], [32 F.] 802; United States v. American Bell Telephone Co. [ C.C.], 29 F. 17."

In International Cotton Seed Oil Co. v. Wheelock, 124 Ala. 367, 27 So. 517, a domestic corporation was buying cotton-seed, manufacturing cotton-seed products at its plant in Dallas County, and selling its products on the market. In course of business it quoted prices to...