Bass v. American Products Export & Import Corp.

• Decision Date: 22 May 1923
• Docket Number: 11238.
• Citation: 117 S.E. 594,124 S.C. 346
• Parties: BASS v. AMERICAN PRODUCTS EXPORT & IMPORT CORPORATION.
• Court: South Carolina Supreme Court

117 S.E. 594

124 S.C. 346

BASS v. AMERICAN PRODUCTS EXPORT & IMPORT CORPORATION.

No. 11238.

Supreme Court of South Carolina

May 22, 1923

Appeal from Common Pleas Circuit Court of Dillon County; Edward McIver, Judge.

Action by T. J. Bass against the American Products Export & Import Corporation. From an order refusing to set aside the service of summons and complaint, defendant appeals. Affirmed.

Cothran J., dissenting.

Elliott & McLain, of Columbia, for appellant.

N. B Hargrove, of Dillon, for respondent.

MARION J.

Appeal from an order of Hon. Edward McIver, circuit judge, refusing to set aside the service of the summons and complaint in an action for damages. The plaintiff is a resident of Dillon county and the defendant a domestic corporation, with its principal place of business in Columbia. Process was served on L. Cottingham in the town of Dillon, upon the theory that Cottingham was an agent of the defendant. Defendant denies that Cottingham was its agent and the validity of the service is challenged on that ground.

Upon the issue thus made and determined in the circuit court, this court has no power in a law case to review the findings of the circuit judge, unless they were wholly unsupported by evidence or were manifestly influenced or controlled by error of law. Hester v. Rasin Fertilizer Co., 33 S.C. 609, 12 S.E. 563; McSwain v. Grain & Provision Co., 93 S.C. 103, 76 S.E. 117, Ann. Cas. 1914D, 981; Lipe v. Carolina, Clinchfield & Ohio Ry. Co. (S. C.) 116 S.E. 101, this term.

Appellant's contention here is, in substance, that the circuit judge's finding that Cottingham was an "agent" of the defendant is wholly unsupported by competent evidence. The question raised by the appeal is not whether the defendant maintained an agent and conducted its corporate business in the county of Dillon, so as to constitute it a resident of Dillon and thus give the court of common pleas for that county jurisdiction of the subject-matter of the action (section 174, Code of Civ. Proc. 1912), but whether Cottingham was an agent within the meaning of section 184, Code of Civ. Proc. 1912, upon whom service of process would suffice to give jurisdiction of the defendant's person.

The evidence, in the form of affidavits, submitted at the hearing, tended to establish that Cottingham was a cotton buyer at Dillon; that he had bought a considerable quantity of "cotton on a commission basis for" the defendant company; that the method of doing business was for Cottingham to call the defendant's office in Columbia and get a "limit" for a particular day; that he would then buy on the Dillon market, ship the cotton to defendant and draw draft, which would include a fixed profit or commission per bale to him; that, if the cotton turned out to be "materially below grade or under weight," Cottingham would be "billed for the difference"; that defendant advanced no funds to Cottingham and was under no obligation to take all cotton bought by him and offered to defendant; that Cottingham claimed to represent the defendant in the buying and shipping of cotton; and that he held himself out and was recognized by the public as the defendant's "agent or representative" at Dillon. Certain inferences which we think were competent for the circuit judge to deduce from the foregoing evidence were that the defendant corporation was engaged in the business of buying and selling cotton, and that the transactions between Cottingham and the defendant, carried on in the manner indicated, constituted a customary and established business practice or procedure which had extended over a considerable period of time. The circuit judge was further entitled to consider the evidence and the inferences to which it was susceptible in the light of well-known conditions and customs that obtain in the marketing of the state's staple crop. Owing to the fluctuations in the market price of cotton, and the amount of capital required to handle this commodity in any considerable quantity, the local cotton buyer rarely buys for himself or on his own account, but almost universally operates by virtue of a connection with some strong cotton-handling firm or corporation. Such local buyer's prestige on the local market and even his ability to do business at all are largely dependent upon his being known as the "representative" of one of the large dealers--the larger and better known, the better for the buyer's chances of getting his share of the offerings on the local market. Hence, from the evidence adduced, we think the further inference might properly have been drawn that the defendant was aware, or in the exercise of ordinary care should have been aware, of the fact that Cottingham claimed to be its representative in Dillon and so held himself out to the public.

While agency may not be established by the declarations and conduct of the alleged agent alone, such declarations and conduct may be admissible as circumstances in connection with other evidence tending to establish agency. Watkins v. Railroad Co., 97 S.C. 150, 81 S.E. 426. Considered as a whole, we think the evidence was sufficient to support a legal conclusion that an implied agency or agency by estoppel (2 C.J. 461, § 70) might have arisen, which would have entailed liability on the part of the defendant for acts of Cottingham within the apparent scope of his authority, irrespective of whether there was an agency in fact.

If so, is service of process upon one whose ostensible relationship or connection with a corporation may be such as to bind the corporation as to third persons under the doctrine of agency by estoppel, a service upon an agent within the meaning of the statute (section 184, Code Civ. Proc. 1912)? The authority of any agent to bind the corporation by acceptance or receipt of legal process is seldom conferred by express authority of the principal; it is implied by law from the ostensible relationship between the parties. Thus a "timekeeper" may have no express authority to accept service, but his authority may be implied from a very limited actual authority to bind the corporation in respect of certain relations of his principal with others. Jenkins v. Bridge Co., 73 S.C. 532, 53 S.E. 991. Very rarely, perhaps, could service be made upon an "agent" if the service depended upon the express authority of the agent to act for the principal in that particular matter. If, therefore, the relationship between the person served and the corporation is such as would entail or support liability of the corporation as to third persons for acts of the ostensible agent within the apparent scope of his authority, we see no reason why such ostensible authority to bind the corporation should not be held to extend to and include the same implied authority to accept service or to act for the corporation in the receipt of legal process as an actual agent, without express authority, would have in like circumstances. Clearly, the term "agent" as used in a procedure statute, enacted for the benefit of the general public, may not properly be given a more limited signification than it would have in adjudicating the rights of individuals arising out of a similar state of facts. In that view, there was some evidentiary basis for the circuit judge's conclusion that Cottingham was the defendant's agent.

That conclusion is reinforced in the case at bar by this practical consideration:

"The chief object of service of process is to give notice to the party served of the proceeding against him." McSwain v. Grain & Provision Co., 93 S.C. 114, 76 S.E. 122, Ann. Cas. 1914D, 991.

Whether the actual relationship between Cottingham and the defendant was technically that of agency or not, the business connection was close. The defendant's corporate business in Dillon was admittedly transacted through Cottingham or by virtue of an established business connection with him. The relationship in fact was such that the court might reasonably and fairly have inferred from all the circumstances that service upon Cottingham would result--as it did--in prompt notice to the defendant and adequate opportunity to defend. While the sufficiency of the service to convey notice or knowledge of the proceeding is, of course, by no means decisive of its validity, this consideration is pertinent in determining the legality of the service of process upon one whose representative character or agency is brought in question. See McSwain v. Grain & Provision Co., supra.

The law commits the determination of the issue here made to the circuit judge, and, whether his conclusion was correct or not, we may not properly hold that his finding was wholly without evidence to support it.

The judgment of the circuit court is accordingly affirmed.

GARY, C.J., and WATTS and FRASER, JJ., concur.

COTHRAN J. (dissenting).

I think it clearly appears from the record that the court of common pleas for Dillon county was without jurisdiction of the action, and that it should have been so declared.

It is conceded that the defendant is a domestic corporation, with its principal place of business, and actually doing business, in the city of Columbia, Richland county. Its domicile--its legal residence--is therefore in Richland county, and it is a matter not only of legal right but of the jurisdiction of the court that it be sued in that county only, unless it should appear that the corporation is maintaining an agent and transacting its corporate business in some other county in the state. It has been sued in the county of Dillon, and, in order to sustain the jurisdiction of the courts of that county, it is incumbent upon the plaintiff to establish the exception indicated.

I do not at all agree to the statement in the leading opinion:

"The question raised by the appeal is

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