205 U.S. 364 (1907), 225, Peterson v. Chicago, Rock Island and Pacific Railway Company

Docket Nº:No. 225
Citation:205 U.S. 364, 27 S.Ct. 513, 51 L.Ed. 841
Party Name:Peterson v. Chicago, Rock Island and Pacific Railway Company
Case Date:April 08, 1907
Court:United States Supreme Court
 
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Page 364

205 U.S. 364 (1907)

27 S.Ct. 513, 51 L.Ed. 841

Peterson

v.

Chicago, Rock Island and Pacific Railway Company

No. 225

United States Supreme Court

April 8, 1907

        Argued March 6, 7, 1907

        ERROR TO THE CIRCUIT COURT OF THE UNITED

        STATES FOR THE NORTHERN DISTRICT OF TEXAS

        Syllabus

        Foreign corporations can be served with process in a state only when doing business therein, and such service must be upon an agent who represents the corporation in such business.

        Under the circumstances of this case, a railroad company is not doing business in a state simply because another railroad company, of which it owns practically the entire capital stock, does do business therein, nor is the latter company or its officers and employees agents of the former company for the purpose of service of process, even though such agents may at times also represent that company as to business done in other states. There is no partnership liability under such circumstances by which the company owning or controlling the capital stock of the other can be brought into court to respond for a tort by serving the latter company with process.

        This case comes here upon a certificate from the Circuit Court of the United States for the Northern District of Texas, raising the question of the jurisdiction of that court over an action brought by plaintiffs in error, Augusta A. Peterson and Ida Peterson, the latter a minor, suing by her mother and next friend, and both being citizens of Texas, against the Chicago, Rock Island & Pacific Railroad Company, an Illinois corporation.

        The plaintiffs in error, wife and daughter of one John Peterson, an employee of the Pacific Company, sought recovery for the alleged negligent killing of said John Peterson while engaged as an engineer in its employ at Chickasha, in the Indian Territory, on October 19, 1903. It is charged in the petition that the Pacific Company was then engaged in carrying on its business in the State of Texas in the name and through the Chicago, Rock Island & Gulf Railroad, a corporation of the State of Texas, which latter corporation, it was alleged, was

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an auxiliary corporation and agent of the defendant, and was then and there dominated and controlled by it, its lines of railroad being operated by the Pacific Company as a part of the Rock Island system.

        It was charged that S. B. Hovey, vice-president and general manager of the Gulf Company, residing in Tarrant County, Texas, was also the general manager and local agent of the Pacific Company in that state. It was also alleged that F. E. Merrell was the local agent in Tarrant County, Texas, of the Pacific Company, and that M. E. Sebree was the local agent for it in said county and state.

       Service of citation was made on the defendants by serving the parties above named as its agents in Tarrant County, Texas, in pursuance of the statute of the state. The defendant moved to quash the service on the ground that none of the parties were such agents, and filed in support of its motion the affidavits of each -- Hovey, Merrell, and Sebree -- denying such agency. Thereafter plaintiffs made application for additional process in pursuance of a later statute of the State of Texas, to be hereinafter noticed, and charged that A. L. Thomas, who resides in Tarrant County, Texas, was a train conductor engaged in handling trains over the tracks of the Gulf Railroad in the State of Texas and over those of the Pacific Railroad beyond the limits of the state, and that he was engaged in running and handling passenger trains on the tracks of both said companies on both sides of the state line, and is an agent and representative of the defendant company, residing in Tarrant County, Texas. It was further charged that V. N. Turpin, who resides in Fort Worth, Tarrant County, Texas, was a ticket agent engaged in the selling of tickets and the making of contracts for transportation and for and in behalf of the Pacific Company from the City of Fort Worth, Texas, over [27 S.Ct. 514] the lines of the Gulf Company, in the State of Texas, and over the line of the defendant company beyond the line of said state, and was an agent and representative of the defendant company in said state and county.

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        These persons, Thomas and Turpin, were accordingly served under the application for new process as the agents and representatives of the defendant company in the said county and state.

        The defendant company filed a supplemental motion to quash this service upon the grounds that these persons were not the agents or representatives of the defendant company, filing their affidavits in support of said motion. In the return of the writ served on Hovey, it was also set forth that he was general manager of the Pacific Company, residing in Tarrant County, Texas. The motion and supplemental motion to quash the service was heard by the court, the motion sustained, and the cause dismissed for want of jurisdiction, the court holding that the defendant had not been properly served with process.

        From the stipulated facts, documentary evidence, and testimony embodied in the bill of exceptions, the following facts, pertinent to the determination of the issues, may be gathered:

        The Pacific Company and the Gulf Company are both of the "Rock Island system" of railroads. The second annual report of the "Rock Island company" (June 30, 1904) shows that it is the owner of the entire capital stock, except directors' shares, of the Chicago, Rock Island & Pacific Railroad Company, a corporation of Iowa; that company owns 695,574.75 shares of the capital stock of the Chicago, Rock Island & Pacific Railway Company, a corporation of the States of Illinois and Iowa, and 286,349 shares of the common capital stock of the St. Louis & San Francisco Railroad Company, a corporation of the State of Missouri, and the report adds:

Each of the two latter companies operates independently its lines of railway and each is interested through the ownership, directly or indirectly, of at least the majority of the capital stock in certain subsidiary companies, each of which operates its property independently. The lines of the Chicago, Rock Island & Pacific Railway Company, including lines

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formerly of the Choctaw, Oklahoma & Gulf Railroad Company, the Burlington, Cedar Rapids & Northern Railway Company, and the Rock Island & Peoria Railway Company, together namely, the Chicago, Rock Island & Gulf namely, the Chicago, Rock Island & Gulf Railway Company, and the Chicago, Rock Island & El Paso Railway Company, comprise what is known as the "Rock Island system."

As the Rock Island company is the owner of the entire capital stock, except directors' shares, of the Chicago, Rock Island & Pacific Railroad Company, the income of both the companies is included in the following statement.

        This report purports to be made by order of the board of directors, was dated October 17, 1904, and was signed by Robert Mather, president. Appended to this report, as a part of it, under the head of "statements and Exhibits, Rock Island System Lines," was the following statement, to-wit:

        On page 23 of said report, under the heading of "Rock Island System-Mileage Operated:"

        The Chicago, Rock Island & Gulf Railway Company:

        Terral, I.T. (Red River), to Dallas, Texas . . . 126.67

        Bridgeport, Texas, to Graham, Texas . . . . . . 53.29

        Texhoma, O.T., to Bravo, Texas-New

        Mexico state line. . . . . . . . . . . . . . . 91.75

        Texola, O.T. (Texas state line), to

        Amarillo, Texas. . . . . . . . . . . . . . . . 112.97

        ------

        Total, Chicago, Rock Island & Gulf

        Railway Company . . . . . . . . . . . . . 386.68

        Plaintiff also introduced in evidence a railroad folder, dated July 10, 1904, on which was printed in large letters, "Rock Island System Time-table," in which appears the names of the Chicago, Rock Island & Pacific Railway Company, Chicago, Rock Island & El Paso Railway Company, and the Chicago, Rock Island & Gulf Railway Company, with a list of the names and residences of the passenger and freight agents, and a schedule of the passenger trains on said lines.

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On the inside of the cover of the folder is a map showing the lines of the said railroad company, so connected as to belong to one system. Below the map is printed:

        The Rock Island System of America

The Rock Island system covers a territory which is 1,000 miles long by 1,000 miles wide, supports a population of more than 21,000,000 people, and is capable of supporting at least four times that many. The area of this territory is as great as the combined area of France, Germany, Italy, Spain, Austria-Hungary, Denmark, the Netherlands, Turkey, Switzerland, and Greece, and its productive capacity is greater.

Here are produced more than half the wheat, more than half the corn, and nearly half the cotton, silver, and gold produced in the United States.

       The origin of the Gulf Company is thus [27 S.Ct. 515] stated in the annual report of the Rock Island road, June 30, 1904:

        Consolidation of Texas Lines

The Legislature of the State of Texas, by an act passed March 27th, 1903, authorized the sale of the railroads and properties of the Chicago, Rock Island & Texas Railway Company, extending from the Red River to Fort Worth, Texas, with a branch from Bridgeport, Texas, to Graham, Texas; the Chicago, Rock Island & Mexico Railway Company, extending from the Texas-Oklahoma line, near Texhoma, to the Texas-New Mexico line at Bravo, and the Choctaw-Oklahoma & Texas Railroad...

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