Kendall v. Orange Judd Co.

• Decision Date: 24 May 1912
• Citation: 136 N.W. 291,118 Minn. 1
• Parties: KENDALL v. ORANGE JUDD CO.
• Court: Minnesota Supreme Court

118 Minn. 1

136 N.W. 291

KENDALL

v.ORANGE JUDD CO.

Supreme Court of Minnesota.

May 24, 1912.

Appeal from District Court, Hennepin County; Horace D. Dickinson, Judge.

Action by C. D. Kendall against the Orange Judd Company. From an order denying a motion to set aside the service of summons and to dismiss the action for lack of jurisdiction, defendant appeals. Affirmed.

Syllabus by the Court

While R. L. 1905, s 4109, does not in terms require that a foreign corporation must be doing business in the state in order that process may be served upon it by service on its officers or agents in the state, yet it is the settled rule of construction placed thereon by this court that in order to meet the requirements of due process of law such a corporation must be doing business in the state in order to be so served.

In determining whether a corporation is ‘doing business' in the state within the purview of this statute, as construed by the court, each case must depend upon its own facts and circumstances; but it must at least appear that the transactions of the foreign corporation are such that, through the representative character of its agents operating in the state, it may be said that the corporation itself is in the state.

The question as to whether a foreign corporation is ‘doing business' in the state so as to be subject to service of process under R. L. 1905, s 4109, is entirely distinct from the question as to whether such a corporation is ‘doing business' in the state within the purview of the Somerville Law (R. L. 1905, ss 2888-2890), relative to the conditions upon which a foreign corporation may be allowed to do business in the state; and it does not follow that business which, by reason of the Interstate Commerce Law, does not bring the corporation within the Somerville Law, may not nevertheless bring it within R. L. 1905, s 4109.

Evidence examined, and held to show that the defendant, a foreign corporation, was ‘doing business' in the state to such an extent that service on its president, while temporarily in the state on the business of such corporation, was sufficient, under R. L. s 4109, to confer jurisdiction upon the trial court. Helliwell, Keyes & Carroll, of Minneapolis, for appellant.

Cheever & Cheever, of Brookings, S. D., and Fifield, Fletcher & Fifield and Fred. W. Reed, all of Minneapolis, for respondent.

PHILIP E. BROWN, J.

This is an action based upon a certain alleged agreement to repurchase the stock of the Northwestern Orange Judd Company, a Minnesota corporation, executed by the defendant, the Orange Judd Company, a New York corporation. Service of the summons was had therein upon Herbert Myrick, of Springfield, Mass., president of the defendant company, at Minneapolis, and thereafter the defendant, appearing specially for such purpose, moved upon affidavits and all the files in the case to set aside the service of the summons and to dismiss the action for lack of jurisdiction, assigning as ground for such relief that the court had no jurisdiction over the defendant or the said cause because the defendant was a foreign corporation; that the cause of action alleged in the complaint accrued without the state; that the defendant was not, at the date of the alleged service of the summons, nor at the time of such motion, engaged in doing business in the state, nor had at such times any property therein. The court heard the motion on affidavits, the files in the case, and oral testimony, the motion was denied, and the defendant appealed.

[1] R. L. 1905, § 4109, provides: ‘If the defendant be a foreign corporation the summons may be served by delivering a copy to any of its officers or agents within the state.’ It is apparent that this statute does not in terms require the corporation to be doing business in the state in order to be subject to service as indicated; but such is the settled construction placed upon it by this court. See North Wisconsin Cattle Company v. Oregon Short Line R. Co., 105 Minn. 198, 117 N. W. 391.

[2] As to what constitutes ‘doing business,’ within the meaning of the statute as thus construed, it is likewise settled that mere solicitation of business is not enough. North Wisconsin Cattle Company v. Oregon Short Line R. Co., supra; Archer-Daniels Linseed Oil Co. v. Blue Ridge Dispatch, 113 Minn. 367, 129 N. W. 765. On the other hand, it was held in the case last cited that the maintenance by a foreign railroad company of an office, jointly with other foreign railroad companies, through the medium of an unincorporated soliciting and shipping agency which actually transacted part of its shipping business, constituted ‘doing business' so far as service of the process in an action arising out of such transactions was concerned. It is manifest therefore that no general rule can be laid down which will be determinative of what constitutes ‘doing business' in future cases that may arise, and that each case must depend upon its own facts and circumstances; the nearest approach to a rule being suggested by Chief Justice Start in North Wisconsin Cattle Co. v. Oregon Short Line R. Co., supra, when he declared that: ‘Whether such a corporation is doing business in the state is a question of jurisdiction, and in its last analysis it is one of due process of law, under the Constitution of the United States.’ In other words, the transactions of the foreign corporation, which, of necessity, must be conducted through its agents, must be such that, through the representative capacity of such agents operating in the state, it may be said that the corporation itself is in the state.

[3] It must be borne in mind, in this connection, that the question as to what is ‘doing business' within the meaning of this statute, as construed by the courts, is entirely distinct from the question as to what constitutes ‘doing business' within the Somerville Law (R. L. 1905, §§ 2888-2890), relative to the conditions to the right of a foreign corporation to do business in the state. Under the Somerville Law transactions within the protection of the Interstate Commerce Law cannot constitute ‘doing business,’ because the state has no right to impose conditions thereon; but it does not follow that such transactions may not, nevertheless, constitute doing business within the purview of R. L. 1905, § 4109, relative to service of process.

[4] The question, then, on this appeal, is whether the evidence in this particular case shows that the defendant, at the time of the service upon its president at Minneapolis, was ‘doing business' in the state to such an extent as to render it subject to suit and process under the act last above recited. It does not clearly appear where the purchase agreement sued on was executed, but it seems that it was not done in Minnesota. It appears, further, that, excepting the plaintiff's stock subscription, to which we will refer later, all the transactions out of which this agreement grew took place outside of the state. The first of these, so far as appears from the record, took place at Brookings, S. D., October 21, 1910, whereby the Northwestern Orange Judd Company, which, as we have already stated, was a Minnesota corporation, purchased an agricultural journal, then published at Brookings by a South Dakota corporation. Immediately thereafter the name of the journal was changed to the ‘Orange Judd Northwest Farmstead,’ and arrangements were made whereby the defendant undertook the publication of the said journal for a specified portion of the profits, it being agreed that the Northwest Orange Judd Company would reimburse the defendant for the expense of such publication in case the profits should not reach a specified amount; but whether this transaction amounted to anything more than an agreement to manufacture does not appear except by way of inference from subsequent transactions and events. Herbert Myrick, the defendant's president, testified in his affidavit filed in the case that the defendant had no interest in the said journal other than indicated by the said agreement; but the agreement itself was not offered in evidence. On or about October 21, 1910, the plaintiff subscribed, at Minneapolis, for 22 shares of the said Northwestern Orange Judd Company, and thereafter a certificate of stock was delivered to him by the said company, on the back of which was indorsed the said repurchase agreement, purporting to have been executed by the defendant, whereby the defendant agreed to repurchase the said stock upon six months' notice. This agreement was not executed in Minnesota. On or about November 15, 1910, the plaintiff gave notice, pursuant to the terms of the said agreement, of his desire that the defendant should repurchase the said stock as agreed, and the defendant, having, upon maturity of such notice, failed so to repurchase, this action was brought September 1, 1911. In the meantime, however, and immediately after the purchase of the said journal by the Northwestern Orange Judd Company, offices were opened at 335 Palace Building, Minneapolis, at and from which various transactions connected with the said journal, under its new name of the ‘Orange Judd Northwest Farmstead,’ were conducted, and a little later an auxiliary office was established in the Globe Building in the same city. It does not appear who leased these offices. There was uncontradicted evidence that the defendant had no lease thereon, and the Northwestern Orange Judd Company having, so far as any participation in the matters transpiring subsequently to its purchase of the said journal is concerned, completely disappeared from the scenes, except for the allegation of the verified complaint that it was still a Minnesota corporation at the time of the suit, and the testimony of the defendant's president, in his affidavit, that it still existed and still owned and had at all times owned the...