Foster v. Morrison
| Decision Date | 01 November 1954 |
| Docket Number | No. 16922,16922 |
| Citation | 226 S.C. 149,84 S.E.2d 344 |
| Court | South Carolina Supreme Court |
| Parties | Catherine S. FOSTER, as Administratrix of the Estate of Florence C. Burroughs, Deceased, Appellant, and Clinton J. BURROUGHS, Appellant v. H. D. MORRISON and J. M. McManus, individually and as partners trading as MorMac Motor Court, and Rulane Gas Company, a corporation, Defendants, of which Rulane Gas Company, a corporation, is Respondent. (two cases) |
James P. Mozingeo, III, John L. Nettles, Benny R. Greer, Keith A. Gatlin, Darlington, Bell, Horn, Bradly & Gebhardt, Charlotte, N. C., for appellants.
Herbert & Dial, Columbia, for respondent.
Where a foreign corporation has complied with the statutory requirements as to the appointment of a process agent, the Supreme Court of the United States has clearly indicated a leaning toward the construction of such statutes where possible, that would exclude from their operation causes of action not arising in the business done by them in the state. Missouri Pac. Railroad Co. v. Clarendon Boat Oar Co., 257 U.S. 533, 42 S.Ct. 210, 66 L.Ed. 354; Robert Mitchell Furniture Co. v. Selden Breck Const. Co., 257 U.S. 213, 42 S.Ct. 84, 66 L.Ed. 201; Chipman v. Thomas B. Jeffrey Co., 251 U.S. 373, 40 S.Ct. 172, 64 L.Ed. 314.
We, therefore, would affirm and report the Order appealed from. Let the Order be reported.
LEGGE, J., and BURCE LITTLEJOHN, A. A. J., concur.
By the express language of Section 12-722 of the 1952 Code, the authority of the Secretary of State to accept service of process on behalf of a foreign corporation doing business in this State without having complied with the provisions of Section 12-721 is limited to actions or proceedings against such corporation 'growing out of the transaction of any business in this State.' That Section 10-424, relating to the same subject, does not expressly contain the same limitation, is immaterial. The three Sections, 12-721, 12-722 and 10-424, which constituted a single Section, Section 7765, in the 1942 Code, must be construed together.
The purpose of these provisions being the protection of those to whom the foreign corporation has become obligated on its transactions in South Carolina, we have upheld such service after the corporation's withdrawal from the State, where the cause of action had arisen here. Terry Packing Co. v. Southern Express Co., 125 S.C. 198, 118 S.E. 628.
But where the cause of action, as here, did not arise out of the corporation's business within this State, the actual presence of the corporation, through agents in fact who may be personally served within this State, is essential to the jurisdiction. Old Wayne Mutual Life Ass'n of Indianapolis, Indiana v. McDonough, 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345; Simon v. Southern Railway Co., 236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492; Lipe v. Carolina, etc., R. Co., 123 S.C. 515, 116 S.E. 101, 30 A.L.R. 248.
In Thompson v. Queen City Coach Co., 169 S.C. 231, 168 S.E. 693, 697, this Court said:
'We can reach no other conclusion than that, in order for a circuit court of this state to have jurisdiction in a case against a foreign corporation where the cause of action arises without the state, it must be shown that the corporation is
The above caption includes two appeals in which the facts presently involved are the same. They will be discussed as if they were one.
The action is by a resident of this State, as plaintiff, upon a transitory cause of action for tort committed in the State of North Carolina between March 10 and March 12, 1952. Individual defendants have been personally served with process within this State. The other defendant, Rulane Gas Company, which will be referred to as the Company and as respondent, was incorporated in North Carolina and domesticated in this State in 1947 under the statutes which are now contained in Chapter 11 of Title 12 of the Code of 1952. They, in effect, subject domesticated foreign corporations to the laws of this State in like manner as corporations chartered in this State. See particularly, Section 12-705, and, for service of process, Section 12-721 et seq.
The respondent corporation was dissolved under the laws of North Carolina on March 31, 1952. It filed its certificate of withdrawal from this State on May 16, 1952. In its domestication papers it declared that its principal office in South Carolina was in care of Palmetto Rulane Company, Parsonage Street, Bennettsville, at which legal papers might be served upon it by delivery to any officer, agent, or employee found there, or, if none such be found, then by leaving copies on the premises. Code § 12-721.
Upon commencement of the action the summons and complaint were filed with the Secretary of State on March 5, 1953; and with notice of such filing, were forwarded by registered mail to the Company at Charlotte, N. C., on March 4, 1953, and receipted for by one Ted L. Lewis for the Company on March 5. Copies of the summons and complaint were also personally delivered in Charlotte on March 6 to J. Fred Walters, a former officer of the Company, who was resident process agent for it. They were similarly served upon Doris Herndon in Bennettsville on March 4, a former employee of Palmetto Rulane Company, or upon Peggy Roach Lewis, an employee of Suburban Rulane Gas Company of South Carolina.
There was filed with the Secretary of State an annual statement of respondent Rulane Gas Company, dated January 30, 1952, and signed and sworn to by J. Fred Walters, Assistant Secretary, in which the Charlotte, North Carolina, address was given, and the following, quoting, 'That their place of business in South Carolina, at which process may be served, is Bennettsville.'
Respondent moved to set aside the service of process upon affidavit of Walters, its former Assistant Secretary, in which there were recited the dissolution of respondent on March 31, 1952, withdrawal from this State on May 16, 1952, and return of its original Certificate of Domestication which had been issued in connection with the operation of respondent in this State; and that at the time of the commencement of the action respondent was not engaged in any business in this State and did not then have any agent, officer or employee upon whom process might be served. The service of process was set aside and dismissed by the lower court upon review of Terry Packing Company v. Southern Express Company, 125 S.C. 198, 118 S.E. 628, which was distinguished upon the ground that the cause of action there involved arose in this State out of the operations of the foreign corporation here.
The distinction is not alone sufficient to differentiate the cited case from this because under Code Section 10-214 a foreign corporation is subject to suit by a resident of this State for any cause of action, which means, of course, that a resident of this State may sue a foreign corporation in our courts upon a cause of action which arises in another jurisdiction, if it is a transitory cause of action and if jurisdiction of the defendant is properly obtained. Lipe v. Carolina, C. & O. Ry. Co., 123 S.C. 515, 116 S.E. 101, 103, 30 A.L.R. 248. In the latter, jurisdiction of our court of a foreign corporation was sustained upon a cause of action for wrongful death from injuries inflicted in North Carolina. The court said:
'The language of the statute, conferring the right upon any resident to bring an action in the circuit court against a foreign corporation 'for any cause of action,' and limiting the right of action of a nonresident, is too clear to require interpretative comment. The plaintiff, a resident of the state, was entitled to sue upon her transitory cause of action arising in the state of North Carolina, and the circuit court was invested with jurisdiction to try the cause. Obviously, if the service of process was otherwise sufficient to give the circuit court jurisdiction of the person of the defendant, the service was not invalidated or rendered nugatory by reason of the fact that the plaintiff's cause of action arose without the state. The power of the state 'to make the jurisdiction over the foreign corporation wide enough to include the adjudication of transitory actions not arising in the states' is not open to question.'
Further reference to the Lipe case and other similar authorities will be later made.
The respondent had no inherent right to transact business in this State and could only do so by permission of the State. The right of a foreign corporation to do business and domesticate here is one of grace and the State has the right to impose reasonable conditions upon such foreign corporations as it thinks wise and prudent. Frink v. National Mut. Fire Ins. Co., 90 S.C. 544, 74 S.E. 33, Ann.Cas.1913D, 221, State of Washington ex rel. Bond & Goodwin & Tucker v. Superior Ct., 289 U.S. 361, 53 S.Ct. 624, 77 L.Ed. 1256, 89 A.L.R. 653. One of the conditions imposed upon foreign corporations domesticating in South Carolina is that such corporations '* * * shall be subject to the laws of the same (South Carolina) in like manner as corporations chartered under the laws of this State * * *.' Code § 12-705.
Code Section 12-601, which is one of the general laws to which the respondent became subject by domesticating in South Carolina, provides that all dissolved corporations shall be continued bodies corporate for the purpose, among others, of defending suits. This section applies not only to domestic corporations, but to foreign corporations, both by its own terms and by the terms of Section 12-705. The legislature was explicit in its use of...
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