International Harvester Company of America v. Commonwealth of Kentucky

Citation34 S.Ct. 944,234 U.S. 579,58 L.Ed. 1479
Decision Date22 June 1914
Docket NumberNo. 297,297
CourtUnited States Supreme Court

Messrs. Alexander Pope Humphrey, Edgar A. Bancroft, and Victor A. Remy for plaintiff in error.

[Argument of Counsel from pages 579-581 intentionally omitted] Messrs. Charles Carroll, Frank E. Daugherty, J. R. Mallory, J. C. Dedman, C. R. Hill, G. D. Florence, and Mr. James Garnett, Attorney General of Kentucky, for defendant in error.

[Argument of Counsel from page 581 intentionally omitted] Mr. Justice Day delivered the opinion of the court:

This case presents the question of the sufficiency of the service of process on an alleged agent of the International Harvester Company in a criminal proceeding in Breckenridge county, Kentucky, in the court of which county an indictment had been returned against the Harvester Company for alleged violation of the antitrust laws of the state of Kentucky. The Harvester Company appeared and moved to quash the return, substantially upon the ground that service had not been made upon an authorized agent of the company, and that the company was not doing business within the state of Kentucky, and it set up that any action under the attempted service would violate the due process and commerce clauses of the Federal Constitution. The only question involved, says the court of appeals, and we find none other in the record, is whether there was such service of process as would sustain the judgment. The court overruled the motion, and, the case being called for trial and the Harvester Company failing to appear or plead, judgment by default for $500 penalty was entered against it, which was affirmed by the court of appeals of Kentucky (147 Ky. 655, 145 S. W. 393).

It appeared that prior to Cotober 28, 1911, before this indictment was returned, the Harvester Company had been doing business in Kentucky, and had designated Louisville, Kentucky, as its principal place of business, in compliance with the statutes of Kentucky in that respect. It further appeared that the company had revoked the agency of one who had been appointed under the Kentucky statute, and had not appointed anyone else upon whom process might be served.

It is conceded in the brief of the learned counsel for the plaintiff in error that whether the person upon whom process was served was one designated by the law of Kentucky as an agent to receive summons on behalf of the Harvester Company was a question within the province of the court of appeals of Kentucky to finally determine, and no review of that decision is asked here. We come, then, to the first question in this case, which is, Whether, under the circumstances shown in this case, the Harvester Company was carrying on business in the state of Kentucky in such manner as to justify the courts of that state in taking jurisdiction of complaints against it.

For some purposes a corporation is deemed to be a resident of the state of its creation; but when a corporation of one state goes into another, in order to be regarded as within the latter it must be there by its agents authorized to transact its business in that state. The mere presence of an agent upon personal affairs does not carry the corporation into the foreign state. It has been frequently held by this court, and it can no longer be doubted, that it is essential to the rendition of a personal judgment that the corporation be 'doing business' within the state. St. Louis Southwestern R. Co. v. Alexander, 227 U. S. 218, 226, 57 L. ed. 486, 488, 33 Sup. Ct. Rep. 245, and cases there cited. As was said in that case, each case must depend upon its own facts, and their consideration must show that this essential requirement of jurisdiction has been complied with, and that the corporation is actually doing business within the state.

In the case now under consideration the court of ap- peals of Kentucky found, with warrant for the conclusion, that the Harvester Company's method of conducting business might be shown to the best advantage from the general instruction of the company to its agents, of date November 7, 1911, as follows:

'The company's transactions hereafter with the people of Kentucky must be on a strictly interstate commerce basis. Travelers negotiating sales must not hereafter have any headquarters or place of business in that state, but may reside there.

'Their authority must be limited to taking orders, and all orders must be taken subject to the approval of the general agent outside of the state, and all goods must be shipped from outside of the state after the orders have been approved. Travelers do not have authority to make a contract of any kind in the state of Kentucky. They merely take orders to be submitted to the general agent. If anyone in Kentucky owes the company a debt, they may receive the money, or a check, or a draft for the same, but they do not have any authority to make any allowance or compromise any disputed claims. When a matter cannot be settled by payment of the amount due, the matter must be submitted to the general collection agent, as the case may be, for adjustment, and he can give the order as to what allowance or what compromise may be accepted. All contracts of sale must be made f. o. b. from some point outside of Kentucky, and the goods become the property of the purchaser when they are delivered to the carrier outside of the state. Notes for the purchaser when may be taken, and they may be made payable at any bank in Kentucky. All contracts of any and every kind made with the people of Kentucky must be made outside of that state, and they will be contracts governed by the laws of the various states in which we have general agencies handling interstate business with the people of Kentucky. For example, contracts made by the general agent at Parkersburg, West Virginia, will be West Virginia contracts.

'If any one of the company's general agents deviates from what is stated in this letter, the result will be just the same as if all of them had done so. Anything that is done that places the company in the position where it can be held as having done business in Kentucky will not only make the man transacting the business liable to a fine of from $100 to $1,000 for each offense, but it will make the company liable for doing business in the state without complying with the requirements of the laws of the state. We will therefore depend upon you to see that these instructions are strictly carried out.'

Taking this as the method of carrying on the affairs of the Harvester Company in Kentucky, does it show a doing of business within that state to the extent which will authorize the service of...

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