Atlantic Coast Line R. Co. v. Richardson

• Decision Date: 06 August 1908
• Parties: ATLANTIC COAST LINE R. CO. et al. v. RICHARDSON.
• Court: Tennessee Supreme Court

117 S.W. 496

121 Tenn. 448

ATLANTIC COAST LINE R. CO. et al. v. RICHARDSON.

Supreme Court of Tennessee.

August 6, 1908

Certiorari to Court of Civil Appeals.

Action by Charles E. Richardson against the Atlantic Coast Line Railroad Company and another. Petition for certiorari to review a judgment of the Court of Civil Appeals, affirming a judgment of the circuit court of Davidson county, for plaintiffs.

Petition granted, and judgments reversed.

Sloss Baxter, for plaintiffs in error.

Robert L. Morris, for defendant in error.

BEARD C.J.

The defendant in error, at Wyoming, in the state of New York delivered to the Buffalo, Rochester & Pittsburg Railway a car loaded with pears, and received a few days thereafter a bill of lading, in which it undertook to convey the same, over its own line and connecting lines of the Atlantic Coast Dispatch Company, to Nashville, in this state.

This company, as the record indicates, was a voluntary association of certain railroads for the more expeditious handling and transport of freight passing over their several lines to points beyond. The plaintiffs in error, the Atlantic Coast Line Railroad Company and the Georgia Railroad & Banking Company, were, as we infer, two of the constituent members of this association.

The car in question passed over the lines of several railroads including those of the plaintiffs in error. On reaching Nashville, the pears were found to be in a decayed and worthless condition, whereupon the present suit was instituted to recover the value of the shipment. As a ground for recovery it was alleged that the defendant carriers were guilty of negligence in failing properly to ice the car containing the pears, and also of unreasonable delay in transportation, resulting in the decay and loss of the fruit. The action was begun by the issuance of an ordinary summons upon which a return by the officer making this service was indorsed as follows: "Came to hand and executed by reading the process to S. M. Wene, agent of the Atlantic Coast Line Company, and to M. H. Lillard, agent of the Georgia Railroad & Banking Company. ***" Upon the coming in of the declaration the plaintiffs in error filed pleas to the jurisdiction of the court. In its plea the Atlantic Coast Line Railroad Company averred that it was a foreign corporation, "created under the laws of the state of Virginia, operating its lines of railroad in the states of Virginia, North Carolina, etc., and wholly outside of Tennessee; that its principal offices were located outside of this state; that S. M. Wene, upon whom service of the summons was made, was its traveling soliciting agent, and was never appointed agent for the company in Davidson county, in this state; that the company had no office or agency in Davidson county, at the time of the transaction out of which the plaintiff's cause of action arose or since; and that this cause of action did not arise within the state of Tennessee, nor out of any transaction had, in whole or in part, within the state of Tennessee."

The plea of the Georgia Railroad & Banking Company was in like form and substance, save that it averred that it was a corporation created and existing under and by virtue of the laws of Georgia; that its lines of railway were altogether outside of Tennessee; that its principal offices were located in Augusta, Ga., and that M. H. Lillard, upon whom service was made, was a traveling soliciting agent of the company, and was never appointed the agent for the company in Davidson county. In all other essential respects the plea of this latter company was similar to the one set out above.

Instead of demurring to these pleas, if bad in law, the plaintiffs joined issue, and the case was heard on evidence pertinent thereto, resulting in a judgment overruling them and putting plaintiffs in error to trial on defenses involving the merits of the case, which resulted in a verdict and judgment adverse to them.

If the trial judge was in error in his ruling on these pleas on abatement, this is determinative of the case, and there will be no necessity of considering the numerous other errors assigned upon his action in the conduct of the cause.

Before coming to the question of law raised by these pleas, it is proper to say that the averments of fact contained in them are, without any contradiction, supported by the evidence in the case. It is only necessary to add that the car containing the pears in question was received from a connecting carrier by the Atlantic Coast Line Railroad Company, at Richmond, Va., and by that company was taken over its own lines to Augusta, Ga., where it was delivered into the possession of the Georgia Railroad & Banking Company, and by it was transported over its lines to Atlanta, Ga., where it was turned over to the custody of the Southern Railway Company, and by it was carried over its several lines to Nashville, the point of destination. Upon these facts the question is: Did the service of process upon these traveling agents bring the plaintiffs in error within the jurisdiction of the circuit court of Davidson county, and authorize a judgment in personam?

The answer to this question depends alone upon the proper construction of sections 1, 2, c. 226, p. 386, of the Session Acts of 1887 (sections 4543, 4544, of Shannon's Code). Section 1 of this act provides that any foreign corporation "found doing business in this state shall be subject to suit here to the same extent that corporations of this state are by the laws thereof liable to be sued, so far as it relates to any transaction had in whole or in part within this state, or any cause of action arising here, but not otherwise." The second section defines what is meant by being "found doing business in this state" in these terms, to wit: "Any corporation having any transaction with persons, or having any transaction concerning any property, situated in this state, through any agency, whatever, acting for it within the state, shall be held to be doing business here, within the meaning of section 1."

We are at a loss to see how, by the most liberal interpretation, this controversy can be brought within the jurisdictional limits of this statute. These two foreign corporations had no transaction with any person or concerning any property situated in this state, through any agency acting for them, or either of them, within the state. Their transactions were with persons, or corporations, outside the state, and with regard to property, at the time of these transactions, far beyond the borders of the state. The Atlantic Coast Line Railroad Company had its transaction with reference to this property with the common carriers, from whom it received and to whom it delivered this car load of freight. This was equally true with the Georgia Railroad & Banking Company.

This act of 1887 was passed for the purpose (Telephone Company v. Turner, 88 Tenn. 265, 12 S.W. 544) of remedying a defect in our corporation acts, pointed out in Chicago & Alton Railroad v. Walker, 9 Lea, 475. In that case it was held that the Code provisions, which regulate the mode in which corporations may be sued, did not apply to the case of a foreign corporation having no resident agent, or local office, but which was alone represented by a traveling agent, not localized in this state. To meet this apparent hardship, by section 3 of that act it is provided that "process may be served upon any agent" of a corporation found within the county where the suit is brought, "no matter what character of agent such person may be"; but the effect of this section is necessarily limited to suits against foreign corporations falling within the letter and spirit of sections 1 and 2 of the act. So it is, while authorizing process to be served on an agent, whatever his character may be, yet the right of bringing foreign corporations into the courts of this state is circumscribed by the terms of sections 1 and 2 of the act.

It is true that it was held in State v. Insurance Company, 106 Tenn. 294, 61 S.W. 75, that "the term, or phrase, 'doing business' does not and cannot have a uniform and unvarying meaning, but is governed largely by the connection and in view of the object of the statute." And so it was ruled that the Connecticut Mutual Insurance Company, which in the year 1894 recalled its agents and agencies from the state, and from that time ceased to solicit and write new policies, was not doing business in Tennessee, so as to be subject to a privilege tax on its premium receipts from policies theretofore issued, which were sent by mail, or otherwise, to the agents of the company outside the state.

But we see no room for speculation as to the sense in which the terms "doing business in this state" are used in the act of 1887, as the second section, as has already been said, defines those terms, and thus places them beyond the realm of debate.

That this was understood by the court in its disposition of that case is apparent, from the clear line of distinction which the opinion points out between it and that of Insurance Company v....