Charles Friend & Co. v. Goldsmith & Seidel Co.

• Decision Date: 21 February 1923
• Docket Number: No. 14748.,14748.
• Court: Illinois Supreme Court
• Parties: CHARLES FRIEND & CO. v. GOLDSMITH & SEIDEL CO.

307 Ill. 45

138 N.E. 185

CHARLES FRIEND & CO.

v.GOLDSMITH & SEIDEL CO.

No. 14748.

Supreme Court of Illinois.

Feb. 21, 1923.

Action by Charles Friend & Co., a corporation, against the Goldsmith & Seidel Company, a corporation. A judgment of the municipal court dismissing the suit was affirmed by the Appellate Court (224 Ill. App. 336), and plaintiff appeals on certificate of importance.

Affirmed.Appeal from Appellate Court, First District, on Appeal from Municipal Court of Chicago; C. F. McKinley, Judge.

Lee J. Frank and Charles H. Pease, both of Chicago, for appellant.

Newman, Poppenhusen, Stern & Johnston, of Chicago (Lawrence A. Cohen, of Chicago, Ralph Kalish, of St. Louis, Mo., and Henry Jackson Darby, of Chicago, of counsel), for appellee.

DUNN, J.

Charles Friend & Co., a corporation, began a suit in attachment in the municipal court of Chicago against Goldsmith & Seidel Company, a corporation, the affidavit charging that the defendant was not a resident of this state and that its place of residence was 100 South Commercial street, St. Louis, Mo. The writ of attachment was served on Guggenheim Bros., a corporation, as garnishee, and the defendant moved to dismiss the cause and quash the attachment. The court sustained the motion, discharged the garnishee, quashed the attachment, and dismissed the suit, rendering judgment against the plaintiff for costs. The plaintiff appealed to the Appellate Court, which affirmed the judgment, granted a certificate of importance, and allowed an appeal to this court.

Rule 12 of the municipal court is contained in the bill of exceptions. It is as follows:

‘Rule 12. Abatement.-The defendant shall by motion to dismiss supported by affidavit set up such matters in abatement as would be set up in the circuit court by plea in abatement supported by affidavit.’

The appellee's motion to dismiss the cause and quash the writ was supported by an affidavit of an agent of the appellee that the appellee was incorporated under the laws of Missouri on April 3, 1918, having its principal office in St. Louis; that it had applied to the Secretary of State of the State of Illinois for a license to do business in the state, had complied with all the requirements of the statute in that regard, and had received such license on April 16, 1918; that it has ever since that time had its legally appointed agent in Cairo, Alexander county, Ill., upon whom service of process could be obtained, and has ever since that time been, and is now, actually engaged doing business in Illinois, and has always had assets of the approximate value of $100,000 invested in Cairo and used in connection with its business in Illinois. Under the rule adopted as provided in the Municipal Court Act (Hurd's Rev. St. 1921, c. 37, §§ 264-300), the motion and affidavit were equivalent to a sworn plea in abatement.

The most important question in the case is whether a foreign corporation doing business in this state under the license authorized by law is subject to attachment as a nonresident. The statute authorizes an attachment when the debtor is not a resident of this state, and in Mineral Point Railroad Co. v. Keep, 22 Ill. 9, 74 Am. Dec. 124, an action of debt in which an attachment in aid was issued against the defendant, a Wisconsin corporation, upon an affidavit stating that the defendant was not a resident of the state and had property in Illinois which it was about to remove out of the state, it was said that there could be no question that the defendant and its property were amenable to the attachment process; that the word ‘person’ includes bodies politic and corporate-as well foreign as domestic-and if the defendant was a foreign corporation having property in this state it must be regarded as a nonresident debtor and amenable to the process; if a domestic corporation, the allegation that it had property in the state which it was about to remove out of the state to the injury of the creditor was sufficient cause for issuing the writ. In Iroquois Furnace Co. v. Wilkin Manf. Co., 181 Ill. 582, 54 N. E. 987, the affidavit for attachment stated that the defendant, a corporation, was not a resident of the state, that its place of residence was at Milwaukee, in Wisconsin, but did not state that it was incorporated in Wisconsin and not in Illinois. It was said that it might be conceded that the residence of a corporation is in the state which grants its charter, and the allegation that its residence was at Milwaukee, in the state of Wisconsin, was equivalent to an allegation that it was chartered in the state of Wisconsin. In this case no question appears to have been made as to the amenability of the foreign corporation to the process of attachment, but objections were made only to the sufficiency of the affidavit, bond, and notice.

It was very early held that--

‘The residence of a corporation, if it can be said to have a residence, is necessarily where it exercises corporate functions. It dwells in the place where its business is done. It is located where its franchises are exercised. It is present where it is engaged in the prosecution of the corporate enterprise. This corporation has a legal residence in any county in which it operates the road or exercises corporate powers and privileges. In legal contemplation, it resides in the counties through which its road passes, and in which it transacts its business.’ Bristol v. Chicago & Aurora Railroad Co., 15 Ill. 436.

That was a case of a domestic corporation, and the question for construction was the meaning of the Practice Act (Hurd's Rev. St. 1921, c. 110) with reference to the venue of a suit against a railroad company, which was required to be in the county where the defendant resided. Later, however, the same reasoning was applied to the case of a foreign corporation, and it was held, upon the principle announced in the former case, that the residence of a foreign corporation might be in any state where it was by comity permitted to exercise its franchise, and that a railroad company incorporated in Indiana but doing business in this state and having its principal office in Cook county was a resident of that county. Chicago, Danville & Vincennes Railroad Co. v. Bank of North America, 82 Ill. 493. This was also a construction of the Practice Act, a provision of which required a defendant, if a resident of the county in which suit was brought, to file an affidavit of meritorious defense. Similar decisions in other states are Baldwin v. Mississippi & Missouri Railroad Co., 5 Iowa, 518;Richardson v. Burlington & Missouri Railroad Co., 8 Iowa, 260;Lawrence v. Ballou, 50 Cal. 258;North Missouri Railroad Co. v. Akers, 4 Kan. 453, 96 Am. Dec. 183.

It is said that the domicile, residence, and citizenship of a corporation are in the state where it is created and that it has no existence beyond the boundaries of that state. In Ex parte Schollenberger, 96 U. S. 369, 24 L. Ed. 853, it is said:

‘A corporation cannot change its residence or its citizenship. It can have its legal home only at the place where it is located by or under the authority of its charter, but it may by its agents transact business anywhere, unless prohibited by its charter or excluded by local laws.’

In fact, however, a corporation has no home, domicile, residence, or citizenship in the sense in which those terms are applied to natural persons. Whenever those words are applied to a corporation, it is in a figurative sense, and they are used with a vagueness of meaning which arises from the fact that they are metaphorical. A corporation is not a citizen of any state or country. Every definition of ‘citizen’ implies a person inhabiting a city, town, or state, and possessed of some rights because of that fact. Corporations, though not citizens, are held to be citizens of the state of their creation for the purpose of determining the jurisdiction of the federal courts (Wisconsin v. Pelican Ins. Co., 127 U. S. 265, 8 Sup. Ct. 1370, 32 L. Ed. 239), but they are not citizens within the meaning of section 2 of article 4 of the Constitution, which provides that the citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states (Paul v. Virginia, 8 Wall. 169, 19 L. Ed. 357), nor within section 1 of the Fourteenth Amendment, which prohibits any state from making or enforcing any law which shall abridge the privileges or immunities of citizens of the United States (Orient Ins. Co. v. Daggs, 172 U. S. 557, 19 Sup. Ct. 281, 43 L. Ed. 552), though they are persons, within the same section, who may not be deprived of their property without due process of law or denied the equal protection of the laws (Minneapolis & St. Louis Railway Co. v. Beckwith, 129 U. S. 26, 9 Sup. Ct. 207, 32 L. Ed. 585).

As has been seen, we have held a foreign corporation doing business in this state to be a resident so as to be required to file an affidavit of merits with its plea when sued, and not to be a resident so as to be subject to be sued in attachment. It cannot change its residence from the place of its incorporation or have a legal existence elsewhere, but it may by its agents transact business anywhere unless prohibited by its charter or local laws. Corporate existence is an ideal...