342 U.S. 437 (1952), 85, Perkins v. Benguet Consolidated Mining Co.

Docket Nº:No. 85
Citation:342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485
Party Name:Perkins v. Benguet Consolidated Mining Co.
Case Date:March 03, 1952
Court:United States Supreme Court
 
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Page 437

342 U.S. 437 (1952)

72 S.Ct. 413, 96 L.Ed. 485

Perkins

v.

Benguet Consolidated Mining Co.

No. 85

United States Supreme Court

March 3, 1952

Argued November 27-28, 1951

CERTIORARI TO THE SUPREME COURT OF OHIO

Syllabus

A foreign corporation, owning gold and silver mines in the Philippine Islands, temporarily carried on in Ohio (during the Japanese occupation of the Philippines) a continuous and systematic, but limited, part of its general business -- consisting of directors' meetings, business correspondence, banking, stock transfers, payment of salaries, purchasing of machinery, etc. While engaged in doing such business in Ohio, its president was served with summons in an action in personam against the corporation filed in an Ohio state court by a nonresident of Ohio. The cause of action did not arise in Ohio, and did not relate to the corporation's activities there. A judgment sustaining a motion to quash the service was affirmed by the State Supreme Court.

Held:

1. The Federal Constitution does not compel Ohio to open its courts to such a case -- even though Ohio permits a complainant to maintain a proceeding in personam in its courts against a properly served nonresident natural person to enforce a cause of action which does not arise out of anything done within the State. Pp. 440-441.

2. The Due Process Clause of the Fourteenth Amendment also does not prohibit Ohio from granting such relief against a foreign corporation. Old Wayne Life Assn. v. McDonough, 204 U.S. 8, and Simon v. Southern R. Co., 236 U.S. 115, distinguished. Pp. 441-447.

3. As a matter of federal due process, the business done by the corporation in Ohio was sufficiently substantial and of such a nature as to permit Ohio to entertain the cause of action against it, though the cause of action arose from activities entirely distinct from its activities in Ohio. Pp. 447-449.

4. It not clearly appearing, under the Ohio practice as to the effect of the syllabus, whether the Supreme Court of Ohio rested its decision on Ohio law or on the Fourteenth Amendment, the cause is remanded to that court for further proceedings in the light of the opinion of this Court. Pp. 441-449.

155 Ohio St. 116, 98 N.E.2d 33, vacated and remanded.

Page 438

In two actions in an Ohio state court, the trial court sustained a motion to quash the service on the respondent foreign corporation. The Court of Appeals of Ohio affirmed, 88 Ohio App. 118, 95 N.E.2d 5, as did the State Supreme Court, 155 Ohio St. 116, 98 N.E.2d 33. This Court granted certiorari. 342 U.S. 808. Judgment vacated and cause remanded, p. 449.

BURTON, J., lead opinion

MR. JUSTICE BURTON delivered the opinion of the Court.

This case calls for an answer to the question whether the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States precludes Ohio from subjecting a foreign corporation to the jurisdiction of its courts in this action in personam. The corporation has been carrying on in Ohio a continuous and systematic, but limited, part of its general business. Its president, while engaged in doing such business in Ohio, has been [72 S.Ct. 415] served with summons in this proceeding. The cause of action sued upon did not arise in Ohio and does not relate to the corporation's activities there. For the reasons hereafter stated, we hold that the Fourteenth Amendment leaves Ohio free to take or decline jurisdiction over the corporation.

After extended litigation elsewhere,1 petitioner, Idonah Slade Perkins, a nonresident of Ohio, filed two actions in personam in the Court of Common Pleas of Clermont

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County, Ohio, against the several respondents. Among those sued is the Benguet Consolidated Mining Company, here called the mining company. It is styled a "sociedad anonima" under the laws of the Philippine Islands, where it owns and has operated profitable gold and silver mines. In one action, petitioner seeks approximately $68,400 in dividends claimed to be due her as a stockholder. In the other, she claims $2,500,000 damages, largely because of the company's failure to issue to her certificates for 120,000 shares of its stock.

In each case, the trial court sustained a motion to quash the service of summons on the mining company. Ohio Com.Pl., 99 N.E.2d 515. The Court of Appeals of Ohio affirmed that decision, 88 Ohio App. 118, 95 N.E.2d 5, as did the Supreme Court of Ohio, 155 Ohio St. 116, 98 N.E.2d 33. The cases were consolidated, and we granted certiorari in order to pass upon the conclusion voiced within the court below that federal due process required the result there reached. 342 U.S. 808.

We start with the holding of the Supreme Court of Ohio, not contested here, that, under Ohio law, the mining company is to be treated as a foreign corporation.2 Actual notice of the proceeding was given to the corporation

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in the instant case through regular service of summons upon its president while he was in Ohio acting in that capacity. Accordingly, there can be no jurisdictional objection based upon a lack of notice to a responsible representative of the corporation.

The answer to the question of whether the state courts of Ohio are open to a proceeding in personam, against an amply notified foreign corporation, to enforce a cause of action not arising in Ohio and not related to the business or activities of the corporation in that State rests entirely [72 S.Ct. 416] upon the law of Ohio, unless the Due Process Clause of the Fourteenth Amendment compels a decision either way.

The suggestion that federal due process compels the State to open its courts to such a case has no substance.

Provisions for making foreign corporations subject to service in the state is a matter of legislative discretion, and a failure to provide for such service is not a denial of due process. Still less is it incumbent upon a state in furnishing such process to make the jurisdiction over the foreign corporation wide enough to include the adjudication of transitory actions not arising in the state.

Missouri P. R. Co. v. Clarendon Co., 257 U.S. 533, 535.

Page 441

Also without merit is the argument that, merely because Ohio permits a complainant to maintain a proceeding in personam in its courts against a properly served nonresident natural person to enforce a cause of action which does not arise out of anything done in Ohio, therefore the Constitution of the United States compels Ohio to provide like relief against a foreign corporation.

A more serious question is presented by the claim that the Due Process Clause of the Fourteenth Amendment prohibits Ohio from granting such relief against a foreign corporation. The syllabus in the report of the case below, while denying the relief sought, does not indicate whether the Supreme Court of Ohio rested its decision on Ohio law or on the Fourteenth Amendment. The first paragraph of that syllabus is as follows:

1. The doing of business in this state by a foreign corporation, which has not appointed a statutory agent upon whom service of process against the corporation can be made in this state or otherwise consented to service of summons upon it in actions brought in this state, will not make the corporation subject to service of summons in an action in personam brought in the courts of this state to enforce a cause of action not arising in this state, and in no way related to the business or activities of the corporation in this state.

155 Ohio St. 116, 117, 98 N.E.2d 33, 34.

If the above statement stood alone, it might mean that the decision rested solely upon the law of Ohio. In support of that possibility, we are told that, under the rules and practice of the Supreme Court of Ohio, only the syllabus necessarily carries the approval of that court.3 As

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we understand the Ohio practice, the syllabus of its [72 S.Ct. 417] Supreme Court constitutes the official opinion of that court, but it must be read in the light of the facts and issues of the case.

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The only opinion accompanying the syllabus of the court below places the concurrence of its author unequivocally upon the ground that the Due Process Clause of the Fourteenth Amendment prohibits the Ohio courts from exercising jurisdiction over the respondent corporation in this proceeding.4 That opinion is an official part of the report of the case. The report, however, does not disclose to what extent, if any, the other members of the court may have shared the view expressed in that opinion. Accordingly, for us to allow the judgment to stand as it is would risk an affirmance of a decision which might have been decided differently if the court below had felt free under our decisions to do so.

The cases primarily relied on by the author of the opinion accompanying the syllabus below are Old Wayne Life Assn. v. McDonough, 204 U.S. 8, and Simon v. Southern R. Co., 236 U.S. 115. Unlike the case at bar, no actual notice of the proceedings was received in those cases by a

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responsible representative of the foreign corporation. In each case, the public official who was served with process in an attempt to bind the foreign corporation was held to lack the necessary authority to accept service so as to bind it in a proceeding to enforce a cause of action arising outside of the state of the forum. See 204 U.S. at 22-23, and 236 U.S. at 130. The necessary result was a finding of inadequate service in each case and a conclusion that the foreign corporation was not bound by it. The same would be true today in a like proceeding where the only service had and the only notice given was that directed to a public official who had no authority, by statute or otherwise, to accept it in that kind of a proceeding. At the time of rendering the above decisions, this Court was aided, in reaching its conclusion as to the limited scope of the statutory authority of the public officials, by this Court's...

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