Erving v. Chicago & N. W. Ry. Co.

Decision Date08 April 1927
Docket NumberNo. 25913.,25913.
Citation214 N.W. 12,171 Minn. 87
PartiesERVING v. CHICAGO & N. W. RY. CO.
CourtMinnesota Supreme Court

Appeal from District Court, Goodhue County; Albert Johnson, Judge.

Action by Robert R. Erving against the Chicago & Northwestern Railway Company. From an order denying defendant's motion, made on special appearance to set aside the service of the summons, defendant appeals. Affirmed.

Brown, Somsen & Sawyer, of Winona, for appellant.

Herbert P. Keller and George G. Chapin, both of St. Paul, for respondent.


This is an appeal from an order denying defendant's motion, made on special appearance, to set aside the service of the summons.

Defendant is a railroad corporation organized under the laws of Illinois, Wisconsin, and Michigan. Plaintiff, a nonresident of Minnesota, prosecuted this action to recover damages for personal injuries, alleged to have been suffered in Illinois because of defendant's negligence at a time when plaintiff was a passenger on one of defendant's trains. The cause of action did not arise out of any business transacted in Minnesota. Defendant owns and operates a line of road between Chicago and points in Wyoming, and another line between Chicago and the Black Hills, in South Dakota. It has numerous branch lines. It is located in Illinois, Wisconsin, Michigan, Minnesota, Iowa, South Dakota, North Dakota, Nebraska, and Wyoming. It crosses this state and has several branches in Minnesota. It has about 650 miles of road in this state with the usual railroad equipment and stations. One of the branch lines extends into Goodhue county, wherein this action was commenced.

The statutes of this state authorize the service of a summons upon any railroad company by delivering a copy thereof to any ticket or freight agent of such company within the county in which the action is begun. G. S. 1923, § 9233.

Every foreign corporation is required, in order to transact business in this state, to appoint, in writing, an agent duly authorized to accept service of process and upon whom service of process may be had. G. S. 1923, § 7493. Defendant complied with this statute, and the service in this case was made upon its duly authorized agent.

1. The established policy in this state permits the suing of transitory actions, against foreign corporations, regardless of the place where the cause of action arose, if they may be reached by process. Herrick v. M. & St. L. Ry. Co., 31 Minn. 11, 16 N. W. 413, 47 Am. Rep. 771; Rishmiller v. Denver & Rio Grande Ry. Co., 134 Minn. 261, 159 N. W. 272. This is the prevailing rule. 7 R. C. L. 1037; 12 R. C. L. 115; Atchison, T. & S. F. Ry. v. Sowers, 213 U. S. 55, 67, 29 S. Ct. 397, 53 L. Ed. 695; 14A C. J. 1383; 15 C. J. 791 (97).

2. "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states." U. S. Const. art. 4, § 2. The state policy decides whether and to what extent the state will entertain in its courts transitory actions where the causes of action have arisen in other jurisdictions. But such policy must operate in the same way upon its own citizens and those of other states. Any other law would be in conflict with the above provision in the federal Constitution. Chambers v. B. & O. Ry. Co., 207 U. S. 143, 28 S. Ct. 34, 52 L. Ed. 143; State ex rel. Prall v. District Court of Waseca County, 126 Minn. 501, 148 N. W. 463, Ann. Cas. 1915D, 198; State ex rel. Bossung v. District Court, 140 Minn. 494, 168 N. W. 589, 1 A. L. R. 145; Davis v. M., St. P. & S. S. M. Ry. Co., 134 Minn. 455, 159 N. W. 1084; State ex rel. Schendel v. District Court, 156 Minn. 380, 194 N. W. 780.

The case of State ex rel. Schendel v. District Court, supra, however, involved a case brought under the federal Employer's Liability Act (U. S. Comp. St. §§ 8657-8665), which specifically gave jurisdiction to the state court. Doll v. C. G. W. Ry. Co., 159 Minn. 323, 198 N. W. 1006.

3, 4. Defendant seeks to escape the jurisdiction of the court on the theory that by such action interstate commerce is unduly burdened, and hence the statute attempting to authorize the service was ineffectual. Its claim centers about the cases of Davis v. Farmers' Co-Op. Equity Co., 262 U. S. 312, 43 S. Ct. 556, 67 L. Ed. 996, Atchison, T. & S. F. Ry. Co. v. Wells, 265 U. S. 101, 444 S. Ct. 469, 68 L. Ed. 928, and Iron City Produce Co. v. Am. Ry. Express Co. (Ohio App.) 153 N. E. 316.

The gist of the decision in the Davis, as well as the Wells Case, was the fundamental falsity of the particular statute, involved in each case, to permit a citizen and resident of another state to prosecute in the particular state a cause of action, which arose elsewhere against a railroad corporation of another state, which was engaged in interstate commerce, which neither owned nor operated a railroad in the particular state, and which had not consented to be sued therein. The falsity of the statute consisted in its converting a mere soliciting agent into one capable of accepting service in actions of every kind. Many railroads have soliciting agents in most of the states, and if all the states adopted a similar statute it would have a far-reaching effect and subject the company to litigation far from its real territory. It was held that such statutes would impose an undue burden on interstate commerce. Federal control was also emphasized. The disturbing element of interference with interstate commerce, under federal control, is particularly objectionable because the courts are jealous of the right of the public to have public servants give their undivided efforts and attention to their usual and ordinary duties.

In our judgment, there is a distinction between a foreign corporation having only a soliciting agent in a state where it owns no property, and where, as in the case at bar, it is an important factor in the business industry of the state. Defendant's large local holdings and commercial activities in Minnesota make it impossible to distinguish its position before our courts from residents of the state. For all practical purposes, defendant is physically here. The courts have control over it. We need not consider theoretically whether a corporation may be present in a foreign jurisdiction. People's Tobacco Co. v. American Tobacco Co., 246 U. S. 79, 38 S. Ct. 233, 62 L. Ed. 587, Ann. Cas. 1918C, 537. A contrary view has been expressed. Bank of Augusta v. Earle, 13 Pet. 519, 589, 10 L. Ed. 274. But the important thing is that, if it is not technically present, its representatives are. The power of the court will be effectual.

Plaintiff's counsel argues that, by filing the statutory prerequisite as a condition upon which it may do business in this state, defendant has impliedly agreed to be bound thereby. The state may not require defendant to surrender its constitutional rights as a condition to its doing business in the state. Western Union Co. v. Kansas, 216 U. S. 1, 30 S. Ct. 190, 54 L. Ed. 355; Pullman Co. v. Kansas 216 U. S. 56, 30 S. Ct. 232, 54 L. Ed. 378; Looney v. Crane Co., 245 U. S. 178, 38 S. Ct. 85, 62 L. Ed. 230; Southern Pacific Co. v. Denton, 146 U. S. 202, 13 S. Ct. 44, 36 L. Ed. 942; Terral v. Burke Const. Co., 257 U. S. 529, 42 S. Ct. 188, 66 L. Ed. 352, 21 A. L. R. 186; Ins. Co. v. Morse, 87 U. S. (20 Wall.) 445, 458, 22 L. Ed. 365; Henderson on the Position of Foreign Corporations, c. 8, § 132. Our statute requires that a foreign corporation, doing business in our state, shall submit to the jurisdiction of our courts by appointing an agent upon whom service of process may be had. This is a reasonable exercise of power to regulate business. It does not, in itself, impose an improper burden upon interstate commerce. Int. Harvester Co. v. Kentucky, 234 U. S. 579, 34 S. Ct. 944, 58 L. Ed. 1479; Davis v. Cleveland, etc., Ry. Co., 217 U. S. 157, 30 S. Ct. 463, 54 L. Ed. 708, 27 L. R. A. (N. S.) 823, 18 Ann. Cas. 907; Interstate Amusement Co. v. Albert, 239 U. S. 560, 36 S. Ct. 168, 60 L. Ed. 439, 21 Illinois Law Review, 724. The state may certainly compel such corporation to submit to the jurisdiction of its courts. Kane v. New Jersey, 242 U. S. 160, 37 S. Ct. 30, 61 L. Ed. 222; Interstate Amusement Co. v. Albert, supra; Maverick Mills v. Davis (D. C.) 294 F. 404. The state may impose such conditions upon the right of a foreign corporation to do business therein as it may see fit, so long as they do not conflict with the federal Constitution. Ordinarily, an acceptance of such conditions is binding. O'Brien v. So. Bell Tel. & Tel. Co. (D. C.) 292 F. 379; 14A C. J. 1387 (13); Denver & R. G. R. Co. v. Roller (C. C. A.) 100 F. 738, 49 L. R. A. 77; Bagdon v. P. & R. Coal & Iron Co., 217 N. Y. 432, 111 N. E. 1075, L. R. A. 1916F, 407, Ann. Cas. 1918A, 389; Lafayette Ins. Co. v. French, 18 How. 404, 15 L. Ed. 451; Smolik v. P. & R. Coal & Iron Co. (D. C.) 222 F. 148; Railroad Co. v. Harris, 12 Wall. 65, 81, 20 L. Ed. 354; Ex parte Schollenberger, 96 U. S. 369, 24 L. Ed. 853; So. Pac. Ry. Co. v. Denton, 146 U. S. 202, 13 S. Ct. 44, 36 L. Ed. 942; N. Y. L. E. & W. Ry. Co. v. Estill, 147 U. S. 591, 608, 13 S. Ct. 444, 37 L. Ed. 292; State v. St. Mary's Franco-American P. Co., 58 W. Va. 108, 51 S. E. 865, 1 L. R. A. (N. S.) 558, 112 Am. St. Rep. 951, 6 Ann. Cas. 38 and note; Beale on Foreign Corporations, §§ 264, 265, and 266. It would seem that defendant is just as amenable to the courts of the state as are residents of the state, but it seeks to avoid the Minnesota courts, in this action, by the way of a socalled exception to the rule which, it claims, is established by the Davis Case.

It has long been settled that the presence in the state of a mere soliciting agent and nothing more does not make a foreign corporation present in the state, so as to subject it to a suit and process of the state courts. People's Tobacco Co. v. Amer. Tobacco Co., 246 U. S. 79, 38 S. Ct. 233, 62 L. Ed. 587, Ann. Cas. 1918C, 537; Stephan v. Union Pac. (D....

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