Hale v. St. Louis & S. F. R. Co.

• Decision Date: 21 January 1913
• Citation: 134 P. 949,39 Okla. 192,1913 OK 52
• Parties: HALE v. ST. LOUIS & S. F. R. CO.
• Court: Oklahoma Supreme Court

134 P. 949

39 Okla. 192, 1913 OK 52

HALE v. ST. LOUIS & S. F. R. CO.

Supreme Court of Oklahoma

January 21, 1913

Rehearing Denied Sept. 2, 1913.

Syllabus by the Court.

The general policy of the state to require nonresident corporations to become resident persons, by a compliance with section 43, art. 9, of the Constitution, § 260, Williams' Ann. Const., in order that the state may regulate and control same, in intrastate matters, and in order that all intrastate controversies between such corporations and citizens of the state, whatever the amount involved may be, shall be determined under the laws of the state and adjudicated by the courts of the state, is paramount to a contingent statute authorizing service of process on local agents, where the corporations have refused to comply with the law. And when such corporations refuse to submit themselves to the law, and persist in doing business within the state in violation of such state policy, they cannot avail themselves of the benefits of a statute of limitations, enacted for the exclusive benefit of resident citizens.

Commissioners' Opinion, Division No. 2. Error from District Court, Kiowa County; James R. Tolbert, Judge.

Action by C. B. Hale against the St. Louis & San Francisco Railroad Company. Judgment sustaining demurrer for defendant, and plaintiff brings error. Reversed.

O. B Reigel, of Snyder, and Moss, Turner & McInnis, of Oklahoma City, for plaintiff in error.

W. F Evans, of St. Louis, Mo., R. A. Kleinschmidt and Fred E Suits, both of Oklahoma City, for defendant in error.

HARRISON C.

This action was begun in the district court of Kiowa county December 17, 1909, by C. B. Hale against the St. L. & S. F Railway Company for injuries alleged to have been received through the negligence of the company on November 20, 1907. Defendant's demurrer to plaintiff's petition was sustained on the ground that the petition showed on its face that the alleged injuries were received more than two years before the filing of the suit. Plaintiff refused to plead further, and brought the case here on a transcript.

The sole proposition involved in the case is whether a foreign corporation which has refused to comply with the laws of the state by filing a copy of its articles of incorporation within the state and to appoint an agent, as required by law, upon whom service of process may be had, may receive the benefits of the statutes of limitations. It is contended by the railroad company that plaintiff's cause of action, being for personal injuries, is barred by subdivision 3, § 5550, Comp. Laws 1909, which reads as follows: "Within two years: An action for trespass upon real property; an action for taking, detaining or injuring personal property, including actions for the specific recovery of personal property; an action for injury to the rights of another, not arising on contract, and not hereinafter enumerated; an action for relief on the ground of fraud--the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud." On the other hand, it is contended by plaintiff that defendant, being a foreign corporation, cannot claim the benefit of the statute of limitation because of section 5553, Comp. Laws 1909, which reads as follows: "If, when a cause of action accrues against a person, he be out of the state, or has absconded or concealed himself, the period limited for the commencement of the action shall not begin to run until he comes into the state, or while he is so absconded or concealed; and if, after the cause of action accrues, he depart from the state, or abscond, or conceal himself, the time of his absence or concealment shall not be computed as any part of the period within which the action must be brought. The railroad company meets the effect of this section by section 5607, Comp. Laws 1909, which reads as follows: "If any railroad or stage company, or corporation, fail to designate or appoint such person, as in the preceding sections is provided and required, such process may be served on any local superintendent of repairs, freight agent, agent to sell tickets, or station keeper, of such company or corporation in such county, or such process may be served by leaving a copy thereof, certified by the officer to whom the same is directed, to be a true copy, at any depot or station of such company or corporation, in such county, with some person in charge thereof, or in the employ of such company or corporation, and such service shall be held deemed complete and effectual."

The contentions of the two parties, briefly summed up, are: By the plaintiff: That, a foreign corporation being out of the state, having refused to comply with the laws of the state, and being a nonresident, under section 5553, it cannot claim the benefits of the statutes of limitations. And by the railroad company: That, notwithstanding it has failed to comply with the laws of the state, it may yet claim the benefit of the statute of limitation, because section 5607, supra, provides that service of process may be had on any local superintendent of repairs, freight agent, agent to sell tickets, or station keeper of such company. Numerous authorities are cited by opposing counsel in support of their respective contentions.

As there is such a marked conflict between the two lines of decisions on this question, it becomes necessary to review some of the leading cases and to ascertain the reason upon which they are based in order to a proper comparison of their weight. A number of states, to wit, Kansas, Nevada, Wisconsin, Missouri, and New York, hold, under statutes similar to section 5553, that foreign corporations, although, under statutes similar to section 5607, they may be served with process within the state, yet cannot avail themselves of the benefits of the statute of limitations. While, on the other hand, a greater number of states, under statutes somewhat similar, have held the contrary. The point of divergence seems to be over what constitutes the test of the question. The former states, on the theory that a foreign corporation is a person without the state, make the question of residence the test. Some of the other line of decisions make the question " whether or not service may be had within the state" the test, while others, partially at least, qualify the latter test.

In Williams v. Metropolitan Street Ry. Co., 68 Kan. 17, 74 P. 600, 64 L. R. A. 794, 104 Am. St. Rep. 377, 1 Ann. Cas. 6, wherein the sole question involved was whether a foreign corporation transacting business in that state could plead the statute of limitations in bar of an action originating in that state, in favor of a resident plaintiff, is a case which, although decided in December, 1903, some 10 years subsequent to the adoption of our Code from that state, is based upon a line of decisions which have been followed by the Kansas court from the earliest decisions of the state. And inasmuch as the court, speaking through Mr. Justice Smith, exhaustively reviews all the leading decisions on the question, not only from the state of Kansas, but from other jurisdictions, we quote at length from the opinion. After stating the proposition involved, the court said: "In Mary E. Lane, Adm'r, v. National Bank of the Metropolis, 6 Kan. 74, it was held that the personal absence of the debtor from the state, even if he retained a residence here at which process against him might be served, was sufficient to take the case out of the statute. This case has been followed repeatedly. Hoggett v. Emerson, 8 Kan. 262; Morrell v. Ingle, 23 Kan. 32; Conlon v. Lanphear, 37 Kan. 431, 15 P. 600; Ament v. Lowenthall, 52 Kan. 706, 35 P. 804; Coale v. Campbell, 58 Kan. 480, 484, 49 P. 604; Investment Co. v. Bergthold, 60 Kan. 813, 58 P. 469. In the early case of Bank of Augusta v. Earle, 13 Pet. 519, 588, 10 L.Ed. 274, Chief Justice Taney said: 'It is very true that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created. It exists only in contemplation of law, and by force of the law, and where that law ceases to operate, and is no longer obligatory, the corporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty.' * * * In Shaw v. Quincy Mining Company, 145 U.S. 444, 450, 12 S.Ct. 935, 937, 36 L.Ed. 768, Mr. Justice Gray, after quoting the above language of Chief Justice Taney, said: 'This statement has been often reaffirmed by this court, with some change of phrase, but always retaining the idea that the legal existence, the home, the domicile, the habitat, the residence, the citizenship of the corporation can only be in the state by which it was created, although it may do business in other states whose laws permit it.' "

Lafayette Ins. Co. v. French, 18 How. 404, 15 L.Ed. 451, is also reviewed, citing Clark & Mar. Priv. Corp. 356, and, after quoting from Mr. Justice Valentine in Land Grant Ry. Co. v. Com'rs Coffey Co., 6 Kan. 253, the court resumes:

"The corporation sued in this action, like all others, is, in the words of Chief Justice Marshall, 'an artificial being, invisible, intangible, and existing only in contemplation of law.' In State v. Water Co., 61 Kan. 547, 558, 60 P. 337, 341, it was said: 'A corporation exists by the will of a sovereign power. To this superior authority it owes an allegiance which it cannot abjure.'

If the Metropolitan Street Railway Company was, in contemplation of law, present in this state from May, 1894, until June, 1901 then the action was barred. The corporation was sued. It is not contended that the body corporate moved itself into this state, but that, having agents here, their presence, while transacting business in its behalf, amounted...