Atchison, T. & S.F. Ry. Co. v. Weeks
| Decision Date | 20 December 1918 |
| Docket Number | 3226. |
| Citation | 254 F. 513 |
| Parties | ATCHISON, T. & S.F. RY. CO. v. WEEKS et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
A. H Culwell, of El Paso, Tex., and J. W. Terry, of Galveston Tex. (Terry, Cavin & Mills, of Galveston, Tex., Turney Culwell, Holliday & Pollard, of El Paso, Tex., and Robert Dunlap, of Chicago, Ill., on the brief), for appellant.
George E. Wallace, of El Paso, Tex. (Weeks & Owen, of El Paso, Tex on the brief), for appellees.
Before PARDEE, WALKER, and BATTS, Circuit Judges.
The suit was by appellant to restrain collection of a judgment by default of a court of Texas upon a cause of action arising in tort in California. The pertinent facts are:
The appellant company, not a Texas corporation, has lines of railroad in a number of states, including Oklahoma, New Mexico, and Arizona. It has no line in the state of Texas. It formerly operated a line into El Paso, Tex., under a lease. The Railroad Commission not giving its necessary approval the lease was not renewed. It has no permit to do business within the state, and has complied with none of the laws with reference to the doing of business by foreign corporations. It is incorporated to operate a railroad, and could not secure a permit to do business within the state. R. J. Parker, upon whom service was had, is the general manager of the appellant's Western lines. He directs the operation of the appellant's railroads by letters and telegrams to its officers and agents from his office at Amarillo, Tex. He is chief operating officer of the Pan Handle & Santa Fe Railway Company, and is required to maintain his office, as such, under the laws of the state of Texas, at Amarillo. As a matter of convenience, he directs from that point the operations of the Western lines of the appellant, the lines lying outside the state, but connecting at the state line with the Pan Handle & Santa Fe. Appellant's general superintendent, trainmaster, general foreman, and mechanical superintendent are also at Amarillo. These officers maintain their residences at that place, and assist in directing the operation outside of the state of appellant's lines under their jurisdiction. The general manager and other officers have the necessary clerical force at Amarillo. Appellant does not own and maintain a railway extending to Amarillo, and does not maintain any local agent at that place, or have any office or agency there, or elsewhere in the state, except as stated. The principal offices of appellant are not in Texas.
The holding of the trial judge that jurisdiction over appellant could not be based on the relations between it and the Pan Handle & Santa Fe Railway Company is sustained by Peterson v. C., R.I. & P. Ry. Co., 205 U.S. 364, 27 Sup.Ct. 513, 51 L.Ed. 841. The matter for determination is the validity of a judgment by default upon service of citation upon R. J. Parker, manager.
A suit for damages for personal injuries is a transitory action, cognizable in the courts of any state in which the defendant may be found. A corporation, foreign to a state, may so subject itself to the jurisdiction of the state as to place itself, with reference to such an action, in the same position as an individual. This may result from the establishment in the state of the main office of the corporation, and the discharge there of the principal corporate functions, or from doing business therein in such a way and to such an extent that it will be held to be present within the state. With reference to the proposition last made, in the case of People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 Sup.Ct. 233, 62 L.Ed. 587, Ann. Cas. 1918C, 537, it is said:
'The general rule deducible from all our decisions is that the business must be of such nature and character as to warrant the inference that the corporation has subjected itself to the local jurisdiction, and is by its duly authorized officers or agents, present within the state or district where service is attempted.'
In connection with this rule it is said: 'Each case depends upon its own facts. ' When such a statement may be made, a doubt arises as to whether that which is spoken of as a rule has been properly characterized.
While the formulated legal principles are too indefinite to be very useful, the adjudicated cases indicate the judicial trend. In the case of Peterson v. Chicago, Rock Island & Pacific Ry. Co., 205 U.S. 364, 27 Sup.Ct. 513, 51 L.Ed. 841, it was held that the fact that the defendant railroad company owned stock in the local subsidiary company, that its officers were the officers of the subsidiary company, and that the lines of the local company connected with its lines, did not bring it 'into the state in the sense of transacting its own business there.'
It is also established that the continued practice of advertising its wares in a state, and the maintenance of a staff of soliciting agents, does not subject a corporation to the local jurisdiction for the purpose of service of process (Green v. C., B. & Q. Ry. Co., 205 U.S. 530, 27 Sup.Ct. 595, 51 L.Ed. 916); although, if the agents have authority to receive payment and checks or drafts on behalf of the company, and to take notes payable and collectible at banks in the state, it is doing business in such a way as to subject it to process (International Harvester Co. v. Kentucky, 234 U.S. 579, 34 Sup.Ct. 944, 58 L.Ed. 1479).
It is well established that, when acting under the laws of the state with reference to foreign corporations, such a corporation secures a permit, and designates agents upon whom service may be had, it subjects itself, in all respects, to the jurisdiction of the courts of the state as to any business covered by its permit; but it is doubted if such designation of an agent for service constitutes a subjection of the corporation to the courts of the state with reference to business or transactions outside the state, and not within the permit. By making application for the permit to do business, and receiving it, the corporation clearly defines the extent to which it subjects itself to the state jurisdiction. This limitation would no longer be applicable if it acted beyond the permit given. The residence within the state of the governing officers of the corporation does not constitute presence of corporation.
The doing of business which is entirely incidental to the main business, especially if it be interstate in its character, will not evidence an intention of the corporation to subject itself to the local laws. This may extend even to the maintenance of offices within the state, and the employment of such clerical help as may be necessary, without having such effect. Green v. C., B. & Q. Ry. Co., 205 U.S. 530, 27 Sup.Ct. 595, 51 L.Ed. 916.
In determining whether appellant has subjected itself generally to the jurisdiction of the Texas courts, may be considered:
(1) The business of the Atchison, Topeka & Santa Fe Railway Company is the operation of a railroad. It had no authority to operate a railroad in the state of Texas. It could acquire no such authority. The laws specifically inhibit the operation of a railroad within the state by a corporation not chartered by the state.
(2) It made no effort to secure a permit to do business as a foreign corporation, and made no effort to comply with the laws relative to foreign corporations. When it ceased to do business through the operation of a leased line, the state authorities would not permit a renewal of the lease. The state has taken no steps to compel compliance by the company with the laws affecting foreign corporations.
(3) The general manager and other officers of the corporation had their offices at Amarillo, Tex. From that point they directed the operation of the railroad outside the state. The power which they exercised had all its effect outside the state. That which was done by them in the state was not unimportant, but was purely incidental to the business for which the company was chartered, and which was conducted exclusively in other states. These incidental duties were performed by transactions interstate in their character, all orders being transmitted across the state line.
(4) The principal corporate functions of the corporation were performed at its general offices in another state by its controlling officers.
(5) The...
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