Lloyd Adams, Inc. v. Liberty Mut. Ins. Co.

• Decision Date: 12 July 1940
• Docket Number: 13297
• Citation: 10 S.E.2d 46,190 Ga. 633
• Parties: LLOYD ADAMS, Inc., v. LIBERTY MUT. INS. CO.
• Court: Georgia Supreme Court

10 S.E.2d 46

190 Ga. 633

LLOYD ADAMS, Inc., v. LIBERTY MUT. INS. CO.

13297

Supreme Court of Georgia

July 12, 1940

Syllabus by the Court.

1. (a) Section 3 of the non-resident motorist act of 1937 (Ga.L.1937, pp. 732, 734) authorizes an action under that act to be brought in any county of this State; hence an action against a non-resident motorist, predieated upon personal injuries alleged to have been negligently inflicted in a highway accident in Berrien County, was properly brought in the superior court of Fulton County.

(b) Said act, so construed, does not violate the equal protection clause of the Federal Constitution (amend. 14, § 1; Code, § 1-815) because it permits a foreign corporation to be sued thereunder in any county of this State, whereas a domestic corporation is suable only in the county in which is located its principal office or place of business, of because it allows a non-resident defendant to be sued in any county at the election of the plaintiff.

2. Said act does not violate art. 3, sec. 7, par. 8, of the State Constitution (Code, § 2-1808), which inhibits the passage of any law referring to more than one subject matter in that it appoints the Secretary of State as a nonresident motorist's agent for accepting service, and also designates jurisdiction and venue of cases arising under that act.

3. The portion of the first sentence of Code § 114-403, as amended by Ga.L.1937, pp. 528, 530, declaring that an injured employee may maintain a suit against a tort-feasor after having accepted payment from him for the damages sustained and all of the second sentence of that section contravene the due process clauses of the State and United States Constitutions (Const.Ga. art. 1, § 1, par. 3; Const.U.S Amend. 14, § 1; Code, §§ 2-103, 1-815), in that such portions of the section undertake to authorize recovery on a cause which has previously been extinguished by payment. The right of subrogation provided by this section has application only to the rights of the employee defined therein.

Liberty Mutual Insurance Company, a workman's compensation insurance carrier, sued Lloyd Adams, Incorporated, under the Code, § 114-403, as amended by the act of 1937 (Ga. L. 1937, pp. 528, 530), to recover the amount of workmen's compensation payments made on account of an accidental injury alleged to have been negligently inflicted by the defendant upon the employee of the plaintiff's insured. Both the plaintiff and the defendant were foreign corporations. The injury occurred in Berrien County. The action was instituted in the superior court of Fulton County under the non-resident motorist act of 1937 (Ga. L. 1937, p. 732) which provides in substance that a non-resident using the public highways of the State thereby appoints the Secretary of State as said non-resident's agent for service of process in any action growing out of an accident from the non-resident's operation of a motor vehicle on any highway of this State. This action was brought in Fulton County, not upon the theory that the Secretary of State resides in Fulton County, but upon the theory that any court of the State has jurisdiction of the action, in view of section 3 of the non-resident motorist act (Ga. L. 1937, pp. 732, 734), which provides that 'all courts in the counties of this State now having jurisdiction of tort actions and criminal actions, shall have jurisdiction of all such nonresident users in actions arising under this Act.' The defendant demurred to the petition, on the grounds: that it set forth no cause of action; that the Code section, as amended (supra), does not authorize a recovery under the facts alleged in the petition; that that statute is unconstitutional in that it offends the due process clauses of the State and United States Constitutions; and that section 3 of the non-resident motorist act, if it be construed as conferring jurisdiction upon the superior court of Fulton County of a cause of action growing out of an accident alleged to have happened in Berrien County and jurisdiction to entertain such a suit against this defendant, a foreign corporation, is unconstitutional as denying equal protection of the law, in that said statute permits 'foreign corporations to be sued in any county of the State, without regard to whether such corporation has an office or place of business in such county, and without regard to whether the cause of action originated in such county; whereas domestic corporations are suable only in counties in which is located the principal office or place of business of the domestic corporation or in the county in which the cause of action in tort originated' (Code, § 22-1102); and that the non-resident motorist act of 1937 violates paragraph 8 of section 7 of article 3 of the State Constitution, which declares that 'no law or ordinance shall pass which refers to more than one subject matter, or contains matter different from what is expressed in the title thereof,' in that said act embodies two separate and distinct subjects, to wit: (a) appointment of the Secretary of State as non-resident motorists' agent for accepting service, and (b) designation of jurisdiction and venue of cases under that act.

Powell, Goldstein, Frazer & Murphy, and T. Elliott Goldstein, all of Atlanta, for plaintiff in error.

Bryan, Middlebrooks & Carter, of Atlanta, for defendant in error.

DUCKWORTH Justice.

1. Service on the non-resident defendant corporation was perfected by serving the Secretary of State as provided by the non-resident motorist act of 1937 (Ga.L.1937, p. 732). The first section of that act provided that a non-resident by operating a motor vehicle on the highways of this State shall be deemed to have appointed the Secretary of State of Georgia to be his lawful attorney in fact upon whom may be served all summons or other legal processes in any action against such user, growing out of any accident in which the non-resident user may be involved, and that such operation 'shall be a signification of his agreement that any such process against him shall be of the same legal force and validity as if served upon him personally.' Section 2 provided the method of perfecting service. Section 3 is as follows: 'All courts in the counties of this State now having jurisdiction of tort actions and criminal actions, shall have jurisdiction of all such nonresident users in actions arising under this Act.' The Court of Appeals, in Lowe v. Roberts, 59 Ga.App. 890, 2 S.E.2d 748, construed this act to mean that a suit against a non-resident arising under the act may be filed in any county of the State. The plaintiff in error suggests that the act may be interpreted as meaning that suit must be brought in the county where the tort was committed, or as meaning that it must be brought in the county of the official residence of the Secretary of State. There is nothing in the act which suggests that the suit should be brought in the county where the tort originated. Were it the policy of our law to require tort actions to be brought in the county where the tort was committed, there would be strong reason for assuming that no exception to the general rule was intended to be made by this act. On the contrary, our Constitution provides that tort actions shall be brought in the county of the residence of the defendant. Const. art. 6, § 16, par. 6; Code, § 2-4306. It is clear that the act is not subject to the second suggested interpretation. A non-resident does not by the mere appointment of an agent to accept service for him acquire a fixed residence in the county of such agent. Export Insurance Co. v. Womack, 165 Ga. 815, 142 S.E. 851. The provision for the appointment of an attorney in fact relates to service, and not to venue. Section 3 is the only portion of the act relating to the fixing of the venue of actions arising under the act. It is there declared that all courts in the counties of this State having jurisdiction of tort actions and criminal actions shall have jurisdiction of all such non-resident users. This, we think, is subject to no other interpretation that that the plaintiff may bring suit under the act in a proper court of any county in the State. Proceeding under this construction of the statute, the plaintiff filed the instant action in the superior court of Fulton County against a non-resident corporation, for a tort which was alleged to have been committed in Berrien County.

In its demurrer the defendant attacked the provision of the statute allowing suit to be brought thereunder in either of the 159 counties of the State, on the ground that it violates the equal protection clause of the Fourteenth Amendment of the Constitution of the United States, in that the act permits foreign corporations to be sued in any county of the State, 'whereas domestic corporations are suable only in counties in which is located the principal office or place of business of the domestic corporation or in the county in which the cause of action in tort originated.' 'It of course rests with the state to prescribe the venue of actions brought in her courts. But the exercise of this power, as of all others, must be in keeping with the limitations which the Constitution of the United States places on state action. Procedural statutes are not excepted, but must fall like others when in conflict with those limitations.' Power Mfg. Co. v. Saunders, 274 U.S. 490, 495, 47 S.Ct. 678, 680, 71 L.Ed. 1165. It was also stated in that case that the equal protection clause 'does not prevent a state from adjusting its legislation to differences in situation or forbid classification in that connection, but it does require that the classification be not arbitrary, but based on a real and substantial difference, having a reasonable relation to the subject of the...