Cella Commission Co. v. Bohlinger

• Decision Date: 16 July 1906
• Docket Number: 2,370.
• Citation: 147 F. 419
• Parties: CELLA COMMISSION CO. v. BOHLINGER.
• Court: U.S. Court of Appeals — Eighth Circuit

147 F. 419

CELLA COMMISSION CO. v. BOHLINGER.

No. 2,370.

United States Court of Appeals, Eighth Circuit.

July 16, 1906

(Syllabus by the Court.)

The act of the Legislature of Arkansas of February 26, 1901 Kirby's Dig. Sec. 835, which authorizes a personal judgment against any foreign corporation on any cause of action in favor of a resident or citizen of that state upon service of a summons upon the Auditor of the state of Arkansas, is violative of the fourteenth article of amendments to the Constitution, because it authorizes judgment without the notice to the defendant of the hearing and proposed adjudication in his case, which is indispensable to constitute due process of law.

In the absence of consent or of property in the state, which by attachment, or otherwise, has become the subject or object of the action, nothing short of service of a summons upon the defendant within the state or his appearance in the action will give to a court the jurisdiction requisite to sustain a personal judgment against a nonresident of the state or a foreign corporation.

Where a part of a statute is constitutional and a part is unconstitutional, the former may be sustained in many cases where the latter fails.

Indispensable conditions of such a result are that the constitutional part and the unconstitutional part are capable of separation so that each may be read and may stand by itself, and that the unconstitutional part is not so connected with the general scope of the law that it is impossible to give effect to the intention of the Legislature in its enactment without it.

Where the Legislature of a state has included in a law by general language many subjects, persons, or corporations and has made no limitation or exception, the legal presumption is that it intended to make none.

A statute of a state which includes, by general language subjects within and those without the constitutional jurisdiction of the state may not be limited by judicial construction to the former class and then sustained.

Where a statute of a state covers by general language foreign corporations which are doing business in the state and foreign corporations which are not engaged in business therein, the latter class may not be lawfully expected from the operation of the law nor may the statute be lawfully limited by judicial construction to the former class and then sustained, because such a course would make a new law which the original statute clearly indicates that the Legislature did not intend to enact and because it is impossible to separate such a statute into a constitutional part and an unconstitutional part, each of which may be read and may stand by itself.

Chester H. Krum, for plaintiff in error.

W. H. Pemberton, for defendant in error.

Before SANBORN, HOOK, and ADAMS, Circuit Judges

SANBORN Circuit Judge.

The Cella Commission Company is a corporation of the state of Missouri. A. Bohlinger brought an action against it for breach of a contract in one of the courts of the state of Arkansas. An attachment was issued and H. B. Ake & Co. and the German National Bank of Little Rock were garnished, but no property of the defendant was found or attached. The cause was removed to the court below, where a judgment was rendered against the commission company, which is challenged by this writ of error. After the removal to the Circuit Court the commission company moved to quash the service of the summons, which had been made upon the Auditor of the state of Arkansas pursuant to section 835 of Kirby's Digest of the laws of that state, on the ground that it was a foreign corporation, and was not doing business in the state of Arkansas. The court found that the defendant was doing business in that state at the time of the service of the summons and denied the motion. This ruling presents the first question in this case. A state may lawfully prescribe the terms under which a foreign corporation may transact business within it. The Legislature of Arkansas fixed these terms under which permission was given to any foreign corporation to do business in that state: (1) That it should file in the office of the Secretary of State a designation of an agent who should be a citizen of that state upon whom service of summons or other process might be made; (2) that it should file in the same office a copy of its charter; (3) that it should pay certain fees; and (4) that if it should fail to comply with these conditions it should be subject to certain penalties. Acts 1899 (Kirby's Dig. Secs. 825-834). The summons in the case in hand was not served upon any agent of the defendant appointed under the provisions of these statutes.

On February 26, 1901, while the laws cited above were in full force, the Legislature of Arkansas passed this act:

'In all cases where a cause of action shall accrue to a resident or citizen of the state of Arkansas, by reason of any contract with a foreign corporation, or where any liability on the part of a foreign corporation shall accrue in favor of any citizen or resident of this state, whether in tort, or otherwise, and such foreign corporation has not designated an agent in this state upon whom process may be served, or has not an officer continuously residing in this state upon whom summons and other process may be served so as to authorize a personal judgment, service of summons and other process may be had upon the Auditor of State, and such service shall be sufficient to give jurisdiction of the person to any court in the state having jurisdiction of the subject-matter, whether sitting in the township or county where the Auditor is served, or elsewhere in the state. This act shall not be effective in cases where its enforcement would conflict with the powers of Congress or the federal laws to regulate commerce between the states. ' Kirby's Dig. Sec. 835, p. 349.

The service of the summons in this case was made upon the State Auditor under this statute, and upon this service alone the personal judgment in question has been rendered against this foreign corporation. This statute of 1901 does not prescribe any condition or term under which any foreign corporation may do business in the state of Arkansas. It is entirely independent act and a simple and plain fiat of the state of Arkansas that any of its citizens may recover a personal judgment against any foreign corporation upon any cause of action which he has against it upon service of the summons in the suit upon the Auditor of that state. It does not even require the Auditor to send the copy of the summons which he receives to the defendant or to give it any notice whatever of the action, so that a foreign corporation of Maine or of England or of any other state or nation may find itself a judgment debtor for any amount in the state of Arkansas without any previous notice of the suit in which the judgment has been rendered.

A court that has jurisdiction of the person of the defendant and of the subject-matter of the action, a notice to the defendant before hearing and an opportunity to be heard before judgment are indispensable elements of that due process of law without which no person may be lawfully deprived of his life, his liberty or his property. Const. Amend. arts. 5-- 14. No state has any jurisdiction of persons or of property beyond its territorial limits (Story's Conflict of Laws, c. 2; Wheaton's International Law, pt. 2, c. 2) although it may often affect persons beyond its boundaries by virtue of its jurisdiction over their property within them and property without its limits by reason of its jurisdiction over the persons within them who own it. Nonresidents of a state and foreign corporations may consent that a summons or notice may be served upon them by its service upon an agent whom they appoint, or upon an officer of a state, and such service may then sustain the jurisdiction of its courts to render judgments thereon. When a state provides by law that one of the conditions under which a foreign corporation may do business therein is that the summons in an action against it may be served upon an agent which it appoints, and, in case that it makes no appointment, upon an officer of the state, and the corporation engages in business in that state, it thereby accepts the offer and the condition of the state and consents to such service and to the jurisdiction of the courts of that state to render judgments against it thereon. But no such condition or offer of condition to do business in Arkansas upon service of the summons upon the auditor of that state was made by the legislation of Arkansas, nor accepted by this defendant. The act of 1901 made the service of the summons upon the auditor as effectual to give jurisdiction of foreign corporations which never transacted any business in the state as of those who were engaged in commercial transactions therein.

A state has jurisdiction of the property within its boundaries and to the extend necessary to justly apply that property it may by attachment thereof before hearing and by a substituted service of a summons upon its owner vest in its courts the power to render a judgment against the owner by virtue of which the attached property and that property only may be seized and administered by its court. No property was attached in this case, however, and no jurisdiction was acquired by the courts below in this way. But in the absence of consent to substituted service and in the absence of property of the defendant in the state, which is the subject or object of the action, nothing short of service of a summons upon the defendant personally within the state, or his appearance in the action, constitutes that due process of law which will give the necessary jurisdiction to a court of the state to render a...