Behling v. Wisconsin Hydro Elec. Co.

• Decision Date: 07 May 1957
• Citation: 275 Wis. 569,83 N.W.2d 162
• Parties: Robert W. BEHLING, Plaintiff-Respondent, v. WISCONSIN HYDRO ELECTRIC CO., a Wisconsin corporation, Defendant-Appellant, United Petroleum Co., a foreign corporation, Interpleaded Defendant-Respondent.
• Court: Wisconsin Supreme Court

Page 162

83 N.W.2d 162

275 Wis. 569

Robert W. BEHLING, Plaintiff-Respondent, v. WISCONSIN HYDRO ELECTRIC CO., a Wisconsin corporation Defendant-Appellant United Petroleum Co., a foreign corporation, Interpleaded Defendant-Respondent.

Supreme Court of Wisconsin.

May 7, 1957.

Gwin & Fetzner, Hudson, for defendant-respondent. Wm. Bradford Smith, Madison, for plaintiff-respondent.

BROADFOOT, Justice.

The defendant relies on sec. 262.09(4), Stats., which provides:

'If the defendant is a foreign corporation (including one created by or under any act of Congress) and (a) is doing business in Wisconsin at the time of service, or (b) the cause of action against it arose out of the doing of business in Wisconsin, service may be made in accordance with the provisions of s. 180.825 or by delivering within or without the state a copy of the summons to any officer, director or managing agent of the corporation.'

Sec. 180.825, Stats., referred to in sec. 262.09(4), provides that under certain circumstances service of process may be made on a foreign corporation by service on the secretary of state. No attempt was made to make service under this particular statute.

The issue to be determined in this case is whether the interpleaded defendant was doing business in Wisconsin at the time of service. The defendant contends that it was. The interpleaded defendant contends that it was not so doing business in Wisconsin; that its business was entirely interstate in character in that orders were subject to acceptance at its home office in Minnesota, and that all of the goods which it contracted to deliver were shipped in interstate commerce.

The trial court first held that the service on Robert J. Bell was ineffective for the reason that he was not an officer, director, or managing agent of the interpleaded defendant; further, that the activities of the interpleaded defendant on the date of service on F. T. Carpenter, its president, constituted interstate commerce and therefore the foreign corporation was not doing business in Wisconsin as that term is used in sec. 262.09(4), Stats.

Except for the fact that the Wisconsin statutes relating to service of process must be complied with, the issue involves a question of federal law. Questions of jurisdiction acquired by the service of process on a foreign corporation depend upon whether or not there has been compliance with the due process provision of the federal constitution.

One general rule as to whether or not a foreign corporation is doing business in a state is given in 20 C.J.S. Corporations § 1920, p. 167, as follows:

'Solicitation of business aided by other manifestations of corporate presence will warrant the conclusion that a foreign corporation is doing business in the state notwithstanding none of such manifestations is singly capable of carrying the weight of such inferences. Some statutes which are held to be constitutional render a foreign corporation soliciting business or a particular kind of business amenable to the jurisdiction of the courts.'

That rule has been followed in Wisconsin in Tetley, Sletten & Dahl v. Rock Falls Mfg. Co., 176 Wis. 400, 187 N.W. 204, where there was a continuous course of business in the solicitation of orders in this state in response to which defendant's product was from time to time shipped into this state, plus the fact that the soliciting agent collected money. The foreign corporation was held to be doing business here and subject to the service of process out of our courts as provided by the statute then in effect.

In Petition of Northfield Iron Co., 226 Wis. 487, at page 492, 277 N.W. 168, at page 170, where orders were solicited by a resident agent, we said:

'* * * It is our conclusion that so far as the question of state power is concerned, the International Harvester Co. case, supra, must be taken to make valid a statute, by a state providing for service upon the soliciting agent of a foreign corporation whose only activity aside from a solicitation of orders within the state is the filling of these orders through the instrumentality of interstate commerce.'

In both cases the soliciting agent resided in Wisconsin, orders had to be approved at the home office of the foreign corporation, and all orders were shipped in interstate commerce. Both cases were based on the decision of the U. S. Supreme Court in International Harvester Co. of America v. Commonwealth of Kentucky, 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479.

In Meyers v. Matthews, 270 Wis. 453, 71 N.W.2d 368, the plaintiffs, who claimed to be independent contractors, sought to test the validity of sec. 218.04, Stats. Plaintiffs were nonresidents. They proposed to come into the state of Wisconsin for extended periods in accordance with the business available to solicit offers of assignments of accounts from merchants, doctors, hospitals, and other creditors under a contract with Metropolitan Finance Corporation, a foreign corporation. Plaintiffs proposed to do no collecting but merely to procure on a commission basis offers of assignments. The foreign corporation collected accounts only by mail. In that case we stated, 270 Wis. at page 468, 71 N.W.2d at page 376:

'Metropolitan unquestionably is doing business, and it is doing that business with the aid of its solicitors. Therefore when its solicitors are present in Wisconsin, Metropolitan is present and doing business in Wisconsin. The true relation shown by the evidence to exist between Metropolitan and its solicitors is one of principal and agent. It does not matter for the purposes of this case whether the respondents may be a type of independent contractor or not. We are not concerned here with tort liability or workmen's compensation. What is important here is that the solicitors are agents of Metropolitan.'

The controlling federal case is International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. In that case there was service upon an agent of the shoe company, together with mailing by registered mail to the home office of the company. The shoe company had agents within the state of Washington who solicited orders which were subject to acceptance at its home office in St. Louis, and all goods were shipped in interstate commerce. Pertinent paragraphs from the opinion are as follows:

'It is evident that the criteria by which we mark the boundary line between those activities which justify the subjection of a corporation...