Foster v. Charles Betcher Lumber Co.
| Decision Date | 03 March 1894 |
| Parties | N. C. FOSTER, Plaintiff and respondent, v. CHARLES BETCHER LUMBER CO., Defendant and appellant. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Grant County, S. D.
Affirmed
E. M. Bennett and F. H. Wilson
Attorneys for appellant.
Bion A. Dodge
Attorneys for respondent.
Opinion filed March 3, 1894
This is an appeal from an order denying the motion of the appellant to vacate and set aside a judgment rendered in favor of the respondent by default, the appellant not having appeared in the action. The summons and complaint were served upon A. J. Fairchild, at Milbank, in Grant County, in this state, and upon Albert Wildborg, at Big Stone City, in said county. The sheriff, in his amended return, states that he duly served the summons and complaint upon the persons above named, who were the managing agents of said defendant. The appellant assigns as error that the court erred in denying appellant’s motion to vacate and set aside the said judgment, as the court acquired no jurisdiction of the person of the appellant. It appeared that the appellant was a foreign corporation, organized and existing under the laws of the state of Minnesota, but it also appeared that it had property and places of business in this state. It also appeared from the proof offered by appellant that it had never filed a copy of its articles of incorporation in the office of the secretary of state, nor its appointment of an agent authorized to accept service of process, as required by the laws of this state.
Two questions are presented for our decision. (1) Can service of a summons be legally made upon the managing agent of a foreign corporation, in this state, who has not been appointed by the corporation in the manner prescribed by the statute of this state? And (2) were the persons upon whom the service in this case was made “managing agents” of the appellant, within the meaning of the statute of this state relating to the service of summons upon foreign corporations? The section of the statute relating to such service is section 4898, Comp. Laws, and reads as follows:
“The summons shall be served by delivering a copy thereof, as follows: (1) If the action be against a private corporation, to the president or other head of the corporation, secretary, cashier, treasurer, a director, or managing agent thereof; but such service can be made in respect to a foreign corporation only when it has property in this territory, or the cause of action arose therein, or when such service shall be made within this territory personally upon the president, treasurer, secretary, or duly authorized agent thereof.”
The learned counsel for appellant contend that, under this section, service can only be made upon a foreign corporation by serving the summons upon the president, treasurer, secretary, or duly authorized agent, as provided in the last clause of the section, and that service can only be made upon a managing agent in case of domestic corporations. But we cannot agree with the counsel in this construction of the statute. In our opinion the language of the section will not bear that construction. The first clause of the section clearly applies to all private corporations, whether domestic or foreign. No distinction is made in that clause between the two classes. But by the second clause a condition of such service is made, not as to the persons upon whom service may be made, but under what circumstance such service can be made; and it provides: “But such service can be made in respect to a foreign corporation only when it has property in this territory, or the cause of action arose therein.” The expression “such service” evidently refers to the service specified in the preceding clause, as there is no other service to which it can properly refer. The third and last clause of the section provides for a different service, which may be made when the foreign corporation has no property in this state, and the cause of action did not arise therein. The learned counsel for the respondent contends “that the section authorizes service on the managing agent of a foreign corporation when it has property in this state, or the cause of action arose therein; and that when neither of these conditions exists, service can be made only upon the president, secretary or duly authorized agent.” We are of the opinion that this is the true construction of the section. This seems to be the construction placed upon a somewhat similar provision of the practice act of New York, whence the section we are considering apparently came. Brewster v. Railroad Co., 5 How. Pr. 183; Sterett v. Railroad Co., 17 Hun. 316; Reddington v. Mining Co., 19 Hun. 405; Tuchband v. Railroad Co., 115 NY 437, 22 N.E. 360. We are not able to discover any valid reason why any distinction should be made as to the service of process between the managing agent of a domestic and a for eign corporation when such corporation has such a managing agent within this state, and we think the lawmaking power has made none.
The counsel for appellant further contend that inasmuch as the appellant had never filed its articles of incorporation with the secretary of state, nor its certificate of the appointment of an agent, as required by the law of this state, it was not legally doing business within the state, and could not legally have a managing agent therein, on whom service could be made. But we cannot assent to this proposition. The failure of appellant to comply with the laws of this state cannot be taken advantage of by itself, nor in fact by any private person in a collateral proceeding. The state only in its sovereign capacity, can take advantage of such failure of a foreign corporation to comply with the law. Wright v. Lee, 2 S.D. 596, 51 N.W. 706 (1892), on reh’g 4 SD 237, 55 N.W. 931 (1893). If a foreign corporation is engaged in business in this state, though failing to comply with the laws by filing a copy of its articles of incorporation and a certificate of the appointment of an agent, it is still subject to the laws of the state, and ameanable to its process, until its right to so continue to do business within this state is declared forfeited by the courts of the state, upon due proceedings taken in the name of the state. The person transacting the business of the corporation in this state, as managing agent, must be presumed to be the agent of the corporation, and subject to the service of process. In Hagerman v. Slate Co., 97 Pa. St. 534, the supreme court of Pennsylvania said:
“When a foreign corporation, transacting business in this state, has failed to establish an office, and report the name of an agent, … but has some person residing therein as its agent, it must be presumed that the corporation has substituted such agent as the one on whom service is authorized to be made, to the extent, at least, of its unfinished business in this state.”
This seems to be the true rule. If a corporation fails to comply with the laws of the state, but is still engaged in business therein, and permitted to carry on such business, it must transact its business here subject to the laws of the state, and its assent to service upon its managing agent is implied. The general rule is thus stated by the supreme court of the United States, in St. Clair v. Cox, 106 US 350, 1 SCt 354:
Thomas v. Mining Co., 65 Cal. 600, 4 Pac. 641; Funk v. Insurance Co., 27 Fed. 336; Knapp, Stout & Co. v. National Mut. Fire Ins. Co., 30 Fed. 607; Moch v. Insurance Co., 10 Fed. 696; Pringle v. Woolworth, 90 NY 502; Pope v. Manufacturing Co., 87 NY 137; Tuchband v. Railroad Co., 115 NY 437, 22 N.E. 360.
Thrs brings us to the consideration of the second question:
Were the parties upon whom the service of the summons in this case was made the managing agents of the defendant? The defendant, in support of its motion to vacate and set aside the judgment, read the affidavit of the president and secretary of said defendant. The material part of the affidavit of the president is as follows:
...
To continue reading
Request your trial