Maxwell v. Atchison, T. & S.F.R. Co.

• Decision Date: 19 March 1888
• Citation: 34 F. 286
• Parties: MAXWELL v. ATCHISON, T. & S.F.R. CO.
• Court: U.S. District Court — Eastern District of Michigan

34 F. 286

MAXWELL v. ATCHISON, T. & S.F.R. CO.

United States Circuit Court, E.D. Michigan.

March 19, 1888

Syllabus by the Court

A cause of action upon a contract arises, not in the state where the contract is made, but where it is broken.

In an action against a railway corporation of another state service of process cannot be made upon a passenger agent whose sole duty it is to solicit travel for the defendant road, notwithstanding he may have been employed to effect a compromise of plaintiff's claim.

It seems that under the act of 1875, even in actions of tort, if it appears clearly from the plaintiff's own statement or the testimony of his witnesses that a verdict for $2,000 would be so excessive as to require the court to set it aside, and grant a new trial, it is its duty to dismiss the case for the want of jurisdiction.

This was an action of trespass upon the case to recover damages for the alleged expulsion of the plaintiff from one of defendant's passenger cars within the state of Kansas plaintiff, who is a resident and citizen of this county bought from the Wabash Company, in Detroit, a ticket for Denver, Colo., and return. This ticket was composed of several coupons, one of which entitled him to be transported over the railroad of the defendant in the state of Kansas. His expulsion took place on his return from Denver. Defendant pleaded to the jurisdiction of the court: First. That defendant is a corporation organized under the laws of Kansas, and has no agent within this state upon whom process could be lawfully served; that George E. Gillman, upon whom such process was served, has desk-room, for which this defendant pays, in a coal office in this city, and has merely authority to solicit persons intending to travel in Kansas to patronize the defendant road; that he has no authority to sell tickets, and is not clothed with any agency whatever from this defendant, except as such solicitor. Second. That the ejection of the plaintiff charged in the declaration took place in the state of Kansas; that Gillman did not solicit the plaintiff to travel upon the defendant road, and neither the purchase of the ticket nor the cause of action grew out of the agency of said Gillman as passenger agent. To this plea plaintiff replied--First, that Gillman was an agent of the defendant within this state, and was represented by the defendant upon one of its printed folders as a 'passenger agent," and that the defendant recognized Gillman as such agent by authorizing him to compromise this suit against it for a specified sum; and, second, that the cause of action did accrue to the plaintiff within the state of Michigan because the contract was made with the defendant's agent by the purchase of a ticket in Detroit to Denver and return and was a continuing contract upon which a transitory action arises. Defendant demurred to this replication, and plaintiff joined in the demurrer.

Sylvester Larned and D. A. Straker, for plaintiff.

Alfred Russell, for defendant.

BROWN J., (after stating the facts as above.)

Two questions are presented by the pleadings in this case: First, whether Gillman was such a representative or agent of the defendant company that such company can be said to be 'found' within this district, within the meaning of the act of congress; second, whether this court has jurisdiction of an action for a trespass committed upon the plaintiff in another state. The defendant is a corporation organized under the laws of Kansas, and its several lines of railway run westward from the Missouri river. It was represented in Detroit by one Gillman, who is described upon its folders as a 'passenger agent.' His business is to solicit passengers for the defendant, but he has not authority to sell tickets. He also seems to have been employed by the defendant to effect a settlement of plaintff's claim, and, in pursuance of his instructions, made an offer of compromise. It does not appear to me that the law of this state with respect to suits against foreign corporations (How. St. Sec. 8145) cuts any figure in the case, since it provides for service of process upon the agent of a foreign corporation only where the cause of action arises within this state. I am clearly of the opinion that the cause of action arises, not where the contract is made, but where it is broken; and that, as the expulsion of the plaintiff took place in the state of Kansas, the cause of action must be deemed to have arisen there. But, in addition to that, the statute provides that service may be made upon any officer or agent of the corporation; and the question who shall be deemed an 'agent' within the meaning of the statute is left an open one, to be determined irrespective of the statute.

The general rule appears now to be well settled that a foreign corporation may be sued within any jurisdiction wherein it carries on an important part of its business. Where, under the laws of the state, it is required as a condition of doing business within the state that it shall appoint an officer of agent upon whom process may be served, such corporation is always treated as 'found' within the state within the meaning of the judiciary act; and suits in the federal courts may be instituted by service upon him. Ex parte Schollenberger, 96 U.S. 369; Brownell v. Railroad Co., 3 Fed.Rep. 761; Runkle v. Insurance Co., 2 F. 9; Knott v. Insurance Co., 2 Woods, 479; Fonda v. Assurance Co., 6 Cent.Law J. 305. On the other hand, when an officer of a foreign corporation is temporarily visiting or traveling within the state, it is equally well settled that service of process against the corporation cannot be made upon him if the corporation is not actually doing business within the state. St. Clair v. Cox, 106 U.S. 350, 1 S.Ct. 354; Newell v. Railway Co., 19 Mich. 336. What is the character or amount of business which the corporation must do to subject its agent to the service of process within the foreign state, is left in some doubt by the authorities. If it have an office for the general transaction of its business,-- the sale of its goods, if it be a manufacturing corporation; or the making of contracts, and the receipt of freight and passengers for transportation, if it be a railroad,-- it would appear to be sufficient. Hayden v. Mills, 1 Fed.Rep. 93; Railroad Co. v. Harris, 12 Wall. 65, Railroad Co. v. Cram, 102 Ill. 249; Libbey v. Hodgdon, 9 N.H. 394. So it was held that the circuit court of Illinois had jurisdiction of an action against a beef-canning corporation organized under the laws of Missouri which owned a slaughter-house and stock-yard within the state of Illinois, where beef to be canned was slaughtered and dressed for and in the name of the company. Packing Co. v. Hunter, 7 Reporter, 455. So in Williams v. Transportation Co., 14 O.G. 523, it was held that the station agent of a foreign transportation company was a representative upon whom process might be served, though he had nothing to do with the construction or operation of the cars, nor with the running of the same; his duty being merely to keep the books of the company, to collect the amount due for freights received and shipped, and to make returns of the same to the office of the company at Philadelphia. In ...