Bloom v. American Express Co.

• Decision Date: 28 June 1946
• Docket Number: No. 34225.,34225.
• Parties: BLOOM v. AMERICAN EXPRESS CO.
• Court: Minnesota Supreme Court

23 N.W.2d 570

222 Minn. 249

BLOOM v. AMERICAN EXPRESS CO.

No. 34225.

Supreme Court of Minnesota.

June 28, 1946.

Appeal from District Court, Hennepin County; Winfield W. Bardwell, Judge.

Action by Victor M. Bloom against American Express Company to recover overtime wages allegedly due under Fair Labor Standards Act of 1938, § 1 et seq., 29 U.S.C.A. § 201 et seq. From an order granting defendant's motion to set aside the service of summons, plaintiff appeals.

Order affirmed.

Fred Sorenson, of Minneapolis, for appellant.

Morgan, Chase, Headley & Hoshour and Samuel H. Morgan, all of St. Paul, for respondent.

JULIUS J. OLSON, Justice.

Plaintiff appeals from an order granting his adversary's motion to set aside the service of summons. His cause of action has for its object the recovery of overtime wages under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq. The services so rendered consisted of acting as defendant's tour escort between Chicago and various cities and places in the Republic of Mexico between December 28, 1941, and June 1, 1942.

Defendant is an unincorporated joint stock association organized under the common law of New York. It has conducted its business in Minnesota for more than 30 years. Its business consists of conducting travel tours for groups of persons both here and abroad, issuing and selling travelers' checks and letters of credit, and acting as agent for shippers and consignees commonly known as "foreign freight forwarders."

Defendant's principal office in this state is in Minneapolis, and during the time here involved, in fact ever since 1927, that office has been and was in charge of one James E. Beard, who is its principal agent in this state and possessed of the powers and authority of a general agent. None of defendant's members are residents of Minnesota, nor are any of its officers domiciled here. The only issue presented is whether the court erred in holding that jurisdiction had not been acquired, since service was not made upon any member or officer of defendant, and that service upon Mr. Beard was not authorized by our law, Minn.St. 1941, § 540.15, Mason St.1927, § 9180, which reads "When two or more persons transact business as associates and under a common name, whether such name comprise the names of such persons or not, they may be sued by such common name, and the summons may be served on one or more of them. The judgment in such case shall bind the joint property of all the associates, the same as though all had been named as defendants." (Italics supplied.)

Under the common law, an unincorporated association was not recognized as a legal entity and, as such, could neither sue nor be sued. Starting with this background, we find that the act cited goes back to G.S. 1866, c. 66, § 37. While the language there used is slightly different from that of the present statute, the substance is the same now as it was then. Furthermore, in G.S.1878, c. 66, § 42, we find the statute practically in its present form, and it has so remained ever since. By L.1901, c. 278, it was provided: "Whenever a cause of action exists or has accrued in favor of a resident of this state against any non-resident, individual, association or copartnership engaged in business in this state, by reason of said business so conducted in this state, service of the summons" could be made by delivering a copy thereof to the "manager, superintendent, representative, foreman or agent while he is in actual charge of the business out of which said cause of action accrued, * * * and such service so made shall be due and sufficient service upon any such individual, association or copartnership."

The constitutionality of this act was attacked in Cabanne v. Graf, 87 Minn. 510, 92 N.W. 461, 59 L.R.A. 735, 94 Am.St. Rep. 722. There the trial court had sustained the service upon a nonresident individual defendant, and the question directly presented and decided was disposed of as follows: This court, relying upon Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, considered that case (87 Minn. 513, 92 N.W. 462), "the leading authority in support of the now well-settled proposition that, * * * no state can authorize its courts to compel a citizen of another state remaining therein to come before them and submit to their decision a mere claim upon him for a money demand, no matter what the prescribed mode of service of process against him may be. An attempt to do so is not due process of law." (Citing cases.)

The act was held to be unconstitutional as to that defendant. But we did not thereby declare the entire statute to be unconstitutional. Instead, we said this (87 Minn. 512, 92 N.W. 461): "* * * Whether the statute is valid as applied to associations or copartnerships, which are quasi legal entities, to the extent of binding their property, but not that of the individuals of which they are composed, we do not consider or decide, for this is not such a case, but one against an individual." See Henry L. Doherty & Co. v. Goodman, 294 U.S. 623, 55 S.Ct. 553, 79 L.Ed. 1097.

However, by R.L.1905, § 5544, L.1901, c. 278, was expressly repealed. No legislative substitution has since been made.

The rule has long been established that, in the absence of an enabling statute, an unincorporated association cannot sue or be sued in the association's name, the reason being that such an association, absent a statute recognizing it to be such, has no legal entity distinct from that of its members. That was so determined in St. Paul Typothetae v. St. Paul Bookbinders' Union, 94 Minn. 351, 357, 102 N.W. 725, 726, 3 Ann.Cas. 695, where we held: "But whatever may be the law applicable to such association generally, there is one respect in which the authorities are agreed, and that is that at common law they are not, whether organized for business or other purposes, entitled to recognition in the courts in their association name. It is well settled that, in the absence of a statute otherwise providing, to be entitled to conduct judicial proceedings in court, a party litigant must be either a natural or artificial person. * * * such societies cannot maintain an action in their association name, but must sue in the name of the individuals composing them, however numerous they may be. Such societies in the absence of statutes recognizing them, have no legal entity distinct from that of their members." (Citing cases.)

In addition to these, reference may be had to Allis-Chalmers Co. v. Iron Molders' Union, C.C., 150 F. 155, 184; Jardine v. Superior Court, 213 Cal. 301, 307, 2 P.2d 756, 758, 759, 79 A.L.R. 291; 4 Am.Jur., Associations and Clubs, § 46, and cases cited; 79 A.L.R. 291, and annotation, p. 305 et seq.

It is also a recognized rule that, where statutes specify the person upon whom service of process is to be made in an action against an association such as this defendant, there must be compliance with such statutory provisions. As stated in 7 C.J.S., Associations, § 36, p. 94, under Effect of Statutory Provisions: "Statutes which change the common-law rule as to parties defendant in actions against unincorporated societies by authorizing suits against certain officers thereof, or against the society by its name, usually prescribe the persons upon whom service shall be had, and where the statute prescribes the person or persons upon whom service should be made, such provision is mandatory."

Cf. Church v. Callihan & Co., 49 Neb. 542, 68 N.W. 932; Meyer v. Omaha Furniture & Carpet Co., 76 Neb. 405, 107 N.W. 767. Decisions in most jurisdictions apply a strict construction to statutes in derogation of the common law. 50 Am.Jur., Statutes, §§ 424 and 425. Under § 424, note 11, we find that this court has gone along with that rule. Cf. State ex rel. City of Minneapolis v. St. P. M. & M. Ry. Co., 98 Minn. 380, 396, 397, 108 N.W. 261, 266, 28 L.R.A.,N.S., 298, 120 Am.St.Rep. 581, 8 Ann.Cas. 1047, affirmed, 214 U.S. 497, 29 S.Ct. 698, 53 L.Ed. 1060. True, in Teders v. Rothermel, 205 Minn. 470, 472, 286 N.W. 353, 354, we held that the statute there involved should be given "a fair construction, with the purpose of its enactment in view, not narrowed or restricted because it is a substitute for the discarded common law." Nevertheless, we should also be mindful that "Long-established and valuable remedies are abrogated by statute only by `specific enactment or necessary implication.' [Citing cases.] It is a rule to be applied cautiously, but nevertheless unfalteringly whenever valuable rights themselves need protection, that a statute in derogation of a well-established and salutary principle of the common law, or of equity, will not be extended by construction `beyond its most obvious import.' Stewart v. Duncan, 40 Minn. 410, 42 N.W. 89. `Statutes are enacted * * * with regard to the existing principles of the common law and of equitable jurisprudence, and should be so construed as to harmonize with the existing body of law, unless the intention to change or repeal it is apparent.'" (Citing authorities.) State Bank of Milan v. Sylte, 162 Minn. 72, 75, 202 N.W. 70, 71.

We think our present case is one for the application of the rule stated in the Sylte case. The legislature has not, within the 68 years since this statute in its present form was enacted, expressly, or at all, provided a means of service of process upon foreign associations other than as provided by the act. It operates uniformly upon all associations of this kind. Where there are no members of the association within the confines of this state, jurisdiction is not available in this kind of action upon an agent,...