Jefferson Conley v. Mathieson Alkali Works

• Decision Date: 18 May 1903
• Docket Number: No. 238,238
• Parties: JEFFERSON B. CONLEY, Plff. in Err. , v. MATHIESON ALKALI WORKS
• Court: U.S. Supreme Court

190 U.S. 406

23 S.Ct. 728

47 L.Ed. 1113

JEFFERSON B. CONLEY, Plff. in Err.,

v MATHIESON ALKALI WORKS.

No. 238.

Argued April 15, 16, 1903.

Decided May 18, 1903.

Mr. W. W. MacFarland and Messrs. MacFarland, Taylor, & Costello for plaintiff in error.

Mr. Alfred Ely, and Messrs. Agar, Ely, & Fulton for defendant in error.

Mr. Justice McKenna delivered the opinion of the court:

The plaintiff is a citizen of the state of New York, and the defendant was incorporated in the state of Virginia. The plain- tiff, as assignee of T. T. Mathieson, brought this action in the supreme court of New York county, state of New York, against the defendant for moneys alleged to be due on a contract made and entered into by Mathieson and defendant. The complaint alleged that the contract was made in the city of New York on the 15th of August, 1893. The articles of agreement show that Mathieson's employment was as general superintendent for the term of eight years, in the erection and general management of the works of the corporation, 'and also of their operation, after the same shall have been erected.' The defendant had designated no agent upon whom service could have been made, and summons was served on R. T. Wilson and John G. Agar, two members of the board of directors of the corporation, both residents of the city of New York. They were not officers of the company. Before the time for answer had expired, on defendant's motion the cause was transferred to the United States circuit court for the southern district of New York. A motion was made in that court to set aside the summons and service as null and void. Affidavits were presented by both parties, and ruling on them the court said that if the facts stated by the affidavits of the defendant were true, that, at the time of the service of the summons and for some months before, defendant corporation had ceased to do business in the state, the motion should be granted. But is was said that 'the affidavits of complainant are mainly on information and belief, but annexed to them is a letter, the genuineness of which is not questioned, which bears date March 15, 1901 (two months and a half after the alleged cessation of business at Niagara Falls), and signed by the treasurer of the defendant corporation, in which he speaks of the plant at Niagara Falls as still being operated by the defendant. Under these circumstances the court would not be warranted in granting this motion, in view of the conflict of fact. If, however, the defendant feels assured that the apparent discrepancy can be explained, and is willing to pay the expenses of a reference, it may be sent to a master to take testimony and report to the court whether or not at the time of the service of the summons the defendant corporation was doing business within this state.'

A reference to the master was made. After taking testimony (which occupies sixty-two pages of the record), the master reported that, beside its plant at Saltville, the defendant, prior to December 31, 1900, owned and operated a plant for the manufacture of caustic soda and bleaching powder by electricity, located at Niagara Falls, under a patented process, known as the Castner electrolytic process; that on the 31st of December, 1900, it conveyed this plant and all of the property of the defendant, of every kind and description, to the Castner Electrolytic Alkali Company, a corporation organized under the laws of Virginia; that the consideration expressed for the conveyance was $1 and other valuable considerations, but that the substantial consideration was the entire capital stock of the Castner Electrolytic Alkali Company; that the selling agent for the products manufactured at Niagara Falls, before and after the transfer, was Arnold Hoffman & Co., a corporation organized under the laws of Rhode Island, and [which] had and has its principal place of business in Providence, in that state; that said company was and is the selling agent for the Saltville products, with some exceptions, and that said corporation has a branch office in the city of New York, but the business dealings of the defendant corporation and of the Castner company with Arnold Hoffman & Co. are carried on through its Providence office; that the defendant, since a period prior to the 31st day of December, 1900, had, and still has, its principal place of business in the city of Providence, and that its books and records are kept there, and it has also an office force, consisting of several employees, that its bank account is also kept in said city, and that it has no office in the state of New York,—none of its books, records, or accounts are kept there, nor has it, since January 1, 1901, sold any of its products there; that a by-law of the company, adopted in 1896, provided that the directors should hold monthly meetings in the city of New York, on the second Wednesday of each and every month in each year, but that it did not appear, however, that meetings had been held in compliance with the by-laws, the fact being that they were held sometimes in Saltville and sometimes in Providence, and, during the year 1901, at least, were held not more than two or three times in New York city, and then at the branch office of Arnold Hoffman & Co., or at the office of R. T. Wilson & Co., bankers, in Wall street, a member of which firm was a director of the defendant company, and one of its principal stockholders; that the admissions in a letter of the treasurer of the company, March 15, 1901, 'are fully explained by the fact that it followed earlier correspondence in which the plan of disposing of the plant at Niagara Falls for the stock of a new company was brought to the attention of Mr. Pell,' the president, to whom the letter was addressed. The master's report concluded as follows:

'Upon the facts thus outlined, it does not appear that the defendant corporation was, at the time of the service of the summons herein, viz., April 18, 1901, doing business within this state.

'The fact that it held...