Industrial Commission v. Kemmerer Coal Co.

• Decision Date: 01 August 1944
• Docket Number: 6650
• Citation: 150 P.2d 373,106 Utah 476
• Court: Utah Supreme Court
• Parties: INDUSTRIAL COMMISSION v. KEMMERER COAL CO

150 P.2d 373

106 Utah 476

INDUSTRIAL COMMISSION v. KEMMERER COAL CO

No. 6650

Supreme Court of Utah

August 1, 1944

Original proceedings by the Industrial Commission of Utah against Kemmerer Coal Company for a writ of mandamus to compel defendant to secure payment of compensation for three of its employees. On defendant's motion to quash the service of the alternative writ of mandate.

Motion granted.

GROVER A. GILES, Atty. Gen., and ZAR E. HAYES, A. U. MINER, and ARTHUR H. NIELSON, Asst. Attys. Gen., for plaintiff.

M. E WILSON, of Salt Lake City, for defendant.

WADE Justice. WOLFE, C. J. and LARSON and McDONOUGH, JJ., concur. TURNER, J., concurs in the result.

OPINION

WADE, Justice.

The Industrial Commission of Utah, the plaintiff herein, is seeking to obtain a writ of mandamus from this court to compel the defendant, the Kemmerer Coal Co., a Wyoming corporation, to secure payment of compensation for three of its employees who reside in Utah.

The defendant has made a special appearance and has moved this court to quash the service of the alternative writ of mandate issued by it. The defendant contends that it is a foreign corporation and is not authorized to do business in this state and therefore is not amenable to process here.

The defendant's affidavits in support of its motion to quash the service of process state that it is incorporated under the laws of the state of Wyoming and is a resident and citizen of that state; that under its charter it cannot carry on business in any other state than Wyoming; that it maintains an office in a building in Salt Lake City, Utah, for the convenience of its sales force, which at present consists of three men who reside in Utah; that the name of the defendant is painted on the door of the office and is listed on the directory of the building and in the telephone directory. All the expenses of the office are paid by defendant and the furniture therein is owned by defendant. It also owns three automobiles which are used by its employees in this state.

The summons was served on one L. M. Pratt, Jr., one of the employees of defendant who resided and worked in Utah. Mr. Pratt worked under the immediate supervision of one R. A. Davis, who is the Division Soliciting Sales Manager of the defendant and also is employed and resides in Utah. These employees solicited persons in Utah and Northwestern states to buy coal from the defendant. All orders received by them were subject to confirmation at the home office in Wyoming. No contracts were entered into in Utah and the coal was shipped f. o. b. railroad cars in Wyoming. The defendant maintained the office in Salt Lake City both for the convenience of its employees and so that they might keep it informed of business opportunities.

The question of the amenability of a foreign corporation to process of the courts in states other than its domicile depends upon the statute and the facts in each particular case. Before a foreign corporation can be amenable to personal service of legal process of another state without its consent, it must be present and doing business therein. Bank of America v. Whitney Central Nat'l Bank, 261 U.S. 171, 43 S.Ct. 311, 67 L.Ed. 594; Wells Fargo & Co. v. McArthur Bros. Mercantile Co., 42 Ariz. 405, 26 P.2d 1021; Philadelphia & R. Ry. Co. v. McKibbin, 243 U.S. 264, 61 L.Ed. 710, 37 S.Ct. 280; West Publishing Co. v. Superior Court, 20 Cal.2d 720, 128 P.2d 777.

What is considered "doing business" by a foreign corporation so as to make it present within the state for the purpose of serving process upon it also depends upon the facts and the statute in each particular case. The case of Green v. Chicago, B. & Q. Ry. Co., 205 U.S. 530, 27 S.Ct. 595, 51 L.Ed. 916, is often cited as one of the leading cases holding that solicitation of business by agents of a foreign corporation does not constitute "doing business." This case involved the interpretation of a Federal statute and the court expressly indicated that under some state statutes this might not be true. From a reading of the later cases it would appear that very little more than mere solicitation is necessary to constitute "doing business" by a foreign corporation in a state other than its domicile to subject it to the jurisdiction of its courts. See Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915; American Asphalt Roof Corp. v. Shankland, 205 Iowa 862, 219 N.W. 28, 60 A. L. R. 986 and note (b) commencing on page 1034; International Shoe Co. v. Lovejoy, 219 Iowa 204, 257 N.W. 576, 101 A. L. R. 122 and note commencing on page 139; Frene v. Louisville Cement Co., 77 U.S. App. D.C. 129, 134 F.2d 511, 514, 146 A. L. R. 926, in which case the court in analyzing the modern trend of courts in determining what constitutes "doing business" by a foreign corporation for the purpose of being amenable to the service of process, said:

"The tradition has grown that personal jurisdiction of a foreign corporation cannot be acquired when the only basis is 'mere solicitation' of business within the borders of the forum's sovereignty. And this is true, whether the solicitation is only casual or occasional or is regular, continuous and long continued.

"The tradition crystallized when it was thought that nothing less than concluding contracts could constitute 'doing business' by foreign corporations, an idea now well exploded. It is now recognized that maintaining many kinds of regular business activity constitutes 'doing business' in the jurisdictional sense, notwithstanding they do not involve concluding contracts. In other words, the fundamental principle underlying the 'doing business' concept seems to be the maintenance within the jurisdiction of a regular, continuous course of business activities, whether or not this includes the final stage of contracting. Consequently it is clear that if, in addition to a regular course of solicitation, other business activities are carried on, such as maintaining a warehouse, making deliveries, etc., the corporation is 'present' for jurisdictional purposes. And very little more than 'mere solicitation' is required to bring about this result." (Italics ours.)

See also Marchant...