Baltimore & O. R. Co. v. Mosele
| Decision Date | 01 June 1977 |
| Docket Number | No. 48876,48876 |
| Citation | 67 Ill.2d 321,368 N.E.2d 88 |
| Parties | , 10 Ill.Dec. 602 The BALTIMORE & OHIO RAILROAD COMPANY, Petitioner, v. Victor J. MOSELE, Judge, et al., Respondents. |
| Court | Illinois Supreme Court |
Richard E. Boyle and Richard F. Nash, both of Gundlach, Lee, Eggmann, Boyle & Roessler, Belleville, for petitioner.
David H. Adamson, III, of Callis, Schooley, Filcoff & Hartman, Granite City, for respondent, Robert Genheimer.
This action arises from a petition for a writ of mandamus filed in this court. Petitioner, the Baltimore and Ohio Railroad Company (hereinafter referred to as B & O) is the named defendant in 32 cases now pending in Madison County. The suits allege personal injuries and are brought pursuant to the Federal Employers' Liability Act (45 U.S.C. sec. 51 et seq. (1970)). A substantial majority of the 32 cases arise from incidents which occurred outside of the State of Illinois. Petitioner contends that venue for these actions does not lie in Madison County. Petitioner's motion to transfer to a county of proper venue was denied by the respondent judge, Mosele, whereupon petitioner instituted the present original action which involves only the case of respondent Robert Genheimer. We granted leave to file a petition for writ of mandamus (58 Ill.2d R. 381(a)) and now hold that the circuit court erroneously failed to grant petitioner's request for change of venue.
The following facts were revealed by discovery procedures instituted in connection with petitioner's motion to transfer venue, and by affidavits submitted to the circuit court. The B & O is a foreign corporation authorized to transact business in this State. It is conceded that the B & O operates railroad facilities and maintains offices in 19 counties in Illinois. The B & O has no offices or operating facilities within Madison County, and the incidents from which the actions arose did not take place on that county. One of the counties in which the B & O operates extensive facilities is St. Clair County, which is immediately south of Madison County.
B & O railroad cars and equipment are used in Madison County by other railroads. B & O cars frequently pass through Madison County under the operation and control of the Terminal Railroad Association (hereinafter referred to as TRRA). The TRRA is an independent railroad corporation, incorporated under the laws of the State of Missouri, which operates throughout Madison County. The B & O owns 6.25% Of the stock of the TRRA. The remaining shares are owned by various other railroad companies. The TRRA functions as a terminal and interchange facility for other railroads which ship freight to or from the city of St. Louis, Missouri. The TRRA terminal yards straddle the boundary between St. Clair and Madison counties in Illinois. B & O engines and crews deliver cars to this terminal, where they are turned over to TRRA crews. Though the record is not entirely clear on the matter, it appears that on infrequent occasions parts of a B & O train operated by a B & O crew would cross the county dividing line. These incursions into Madison County all occurred during the process of "yarding" a train in order that it could be turned over to TRRA crews.
The record also discloses that the B & O solicited business from Madison County shippers and that the solicitation generated a substantial amount of revenue for the company. The deposition of the district sales manager of the B & O revealed that he is assigned specific accounts in Madison County and that he spends approximately three days a month contacting shippers within the county. This solicitation of business is not conducted from an office within Madison County.
At issue is whether the B & O railroad is "doing business" within Madison County for purposes of the venue statute. Section 5 of the Civil Practice Act (Ill.Rev.Stat.1975, ch. 110, par. 5) provides that every action must be commenced in the county of the defendant's residence, or in the county where the cause of action arose. Section 6 of the Civil Practice Act defines the residence of a corporation for venue purposes:
"Any private corporation or railroad or bridge company, organized under the laws of this State, and any foreign corporation authorized to transact business in this State is a resident of any county in which it has its registered office or other office or is doing business." Ill.Rev.Stat.1975, ch. 110, par. 6(1).
As previously mentioned, the causes of action involved in this proceeding did not arise from activities in Madison County, and the B & O maintains no offices in that county. Thus, venue will lie in Madison County only if it can be demonstrated that the B & O is "doing business" in the county.
Respondents assert that the facts reveal several bases upon which venue in Madison County may be upheld. First, respondents contend that the occasional physical incursions of B & O trains into Madison County while in the TRRA terminal yards constitute "doing business" in the county. Secondly, respondents contend that the unique relationship between the TRRA and its shareholders demonstrates that the B & O is doing business in Madison County through the agency of the TRRA. Lastly, respondents contend that the B & O is doing business in Madison County by virtue of its solicitation of shippers within the county.
At the outset, we must emphasize that this case concerns the proper interpretation to be placed upon the phrase "doing business" as it is used in the context of the venue statute. The term has a long history in the law and for many years was utilized as a statement of the test for determining when a corporation would be amenable to suit in a foreign jurisdiction. (See generally 4 Wright and Miller, Federal Practice and Procedure § 1066 (1969).) As a result, the phrase "doing business" has been the subject of myriad judicial interpretations, the vast majority of which considered the term only in a jurisdictional context. (See Words and Phrases, "Doing Business".) No firm rule as to what constitutes doing business for jurisdictional purposes is discernible from the cases. As Judge Learned Hand stated: "It is quite impossible to establish any rule from the decided cases; we must step from tuft to tuft across the morass." Hutchinson v. Chase & Gilbert, Inc. (2d Cir. 1930), 45 F.2d 139, 142.
In International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, the United States Supreme Court set to rest a great part of the confusion which had resulted from the "doing business" cases. International Shoe determined that a nonresident defendant is amenable to suit in a jurisdiction, and due process of law is satisfied, where he has "minimum contacts" with the forum State "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102.
We have commented upon the background of the term "doing business" because counsel for both parties have cited and relied upon decisions which interpret the phrase within the context of personal jurisdiction. These decisions are only marginally helpful in determining the issue at hand. Jurisdiction and venue are distinct legal concepts. Jurisdiction relates to the power of a court to decide the merits of a case, while venue determines where the case is to be heard. Statutory venue requirements are procedural only and do not have any relation to the question of jurisdiction. (United Biscuit Co. of America v. Voss Truck Lines, Inc. (1950), 407 Ill. 488, 95 N.E.2d 439.) The Illinois venue statute is designed to insure that the action will be brought either in a location convenient to the defendant, by providing for venue in the county of residence, or convenient to potential witnesses, by allowing for venue where the cause of action arose. Sunderland, Observations on the Illinois Civil Practice Act, 28 Ill.L.Rev. 861 (1934).
We have not previously interpreted the phrase "doing business" as that term relates to venue in section 6 of the Civil Practice Act (Ill.Rev.Stat.1975, ch. 110, par. 6). Respondents would have us incorporate the International Shoe test into our interpretation. In short, respondents contend that venue in Madison County is proper if the B & O had minimal contacts with that county such that maintenance of a suit there would not offend traditional notions of fair play and justice. We reject this contention.
Section 17 of the Civil Practice Act (Ill.Rev.Stat.1975, ch. 110, par. 17) extends the personal jurisdiction of the Illinois courts to the extent permitted by the due process clause as interpreted in International Shoe and the cases it has spawned. (Nelson v. Miller (1957), 11 Ill.2d 378, 389, 143 N.E.2d 673.) Section 17 accomplishes this expansion, in part, by providing that any person submits to the jurisdiction of the courts of this State as to any cause of action arising from "(t)he transaction of any business within this State." (Ill.Rev.Stat.1975, ch. 110, par. 17(1)(a).) Clearly, the language of section 17, referring to the "transaction of any business," is far broader than the language of section 6, which places venue in any county in which the defendant is "doing business." See generally Note, Doing Business as a Test of Venue and Jurisdiction over Foreign Corporations in the Federal Courts, 56 Colum.L.Rev. 394, 416 (1956).
A comparison of the literal terms of sections 6 and 17 demonstrates that the legislature intended that more extensive contacts with a county are necessary to establish proper venue than are required when the issue is whether the defendant is subject to the jurisdiction of the courts of this State. It would be a distortion of the plain meaning of the words of the venue statute to hold that a corporation is "doing business" within any county with which it has even minimal contacts. Additionally, such a...
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