Standard Oil Company v. The Superior Court of State of Delaware

• Decision Date: 01 November 1948
• Citation: 44 Del. 538,62 A.2d 454
• Court: Supreme Court of Delaware
• Parties: STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, Respondents. (Three cases). STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, and JACOB BLAUSTEIN, Respondents. STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, and JACOB BLAUSTEIN, HENRIETTA BLAUSTEIN, FANNY B. THALHEIMER and RUTH B. ROSENBERG, Executors of Louis Blaustein, deceased, Respondents. STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, and AMERICAN TRADING AND PRODUCTION CORPORATION, a corporation of the State of Maryland, Respondents

62 A.2d 454

44 Del. 538

STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, Respondents. (Three cases).

STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, and JACOB BLAUSTEIN, Respondents.

STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, and JACOB BLAUSTEIN, HENRIETTA BLAUSTEIN, FANNY B. THALHEIMER and RUTH B. ROSENBERG, Executors of Louis Blaustein, deceased, Respondents.

STANDARD OIL COMPANY, a corporation of the State of Indiana, Petitioner, v. THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY and the HONORABLE FRANK L. SPEAKMAN, sitting as Judge of said Court, and AMERICAN TRADING AND PRODUCTION CORPORATION, a corporation of the State of Maryland, Respondents

Supreme Court of Delaware

November 1, 1948

Hugh M. Morris, Edwin D. Steel, Jr. and S. Samuel Arsht, and Ralph S. Harris, John R. McCullough and Frederick W. P. Lorenzen (of New York, New York) for petitioner.

Clarence A. Southerland, Caleb S. Layton and Aaron Finger, Nathan L Miller (of New York, New York), and Karl F. Steinmann (of Baltimore, Maryland), for respondents.

HARRINGTON CH., TERRY, CAREY and PEARSON, J. J., sitting.

OPINION

PEARSON, Judge.

In these prohibition cases, petitioner challenges the jurisdiction of the Superior Court in three actions against it. The actions were begun by attachments of petitioner's property purportedly made under authority of a foreign corporation attachment statute, Revised Code of Delaware 1935, § 4631. Petitioner contends that the statute, properly construed, does not authorize proceedings under it in these actions; but that if it were construed to be applicable to them, it would violate the commerce clause art. I, Sec. 8, of the Federal Constitution by imposing an undue burden upon interstate commerce conducted by petitioner, and would further violate the due process clause, Fourteenth Amendment, by depriving petitioner of its property without due process of law. The Superior Court considered these contentions and determined them adversely to petitioner.

The statute, insofar as we need consider it, provides as follows:

"4631. Sec. 26. Foreign Corporations; Subject to Foreign Attachment Laws; How Writ Obtained: Affidavit; Purport of; Writ; How Framed, Directed, Executed, and Returned; Attachments Dissolved How; Judgment, When Obtained; Security for Dissolution of Attachment; Form and Amount of How Determined; -- A writ of foreign attachment may be issued out of the Superior Court of this State against any corporation, aggregate or sole, not created by or existing under the laws of this State, upon affidavit made by the plaintiff or any other credible person, and filed with the Prothonotary of said Court, that the defendant is a corporation not created by, or existing under the laws of this State, and is justly indebted to the said plaintiff in a sum of money, to be specified in said affidavit, and which shall exceed fifty dollars.

"The said writ shall be framed, directed, executed and returned, and like proceedings had as in the case of a foreign attachment issued under the next foregoing section, except that attachments to be issued under this section shall be dissolved only in the manner hereinafter provided. * * *"

Petitioner's first point is that the statute "does not authorize a writ of foreign attachment upon a foreign cause of action at the behest of a foreign plaintiff against a foreign corporation." None of the plaintiffs in the law actions is a resident of Delaware or a Delaware corporation. The defendant (petitioner here) is an Indiana corporation. It owns no tangible property in Delaware, but owns shares of stock in a Delaware corporation which were attached in the actions. It is not qualified to do business in Delaware and does no business here. Its principal executive offices are in Chicago, and it transacts business in some fifteen midwestern states. It has no offices, directors, employees, or agents in Delaware. Its directors have never met in Delaware. The alleged causes of action against the petitioner are in covenant and are based upon breaches of an instrument executed outside of Delaware. No undertaking or covenant alleged to have been breached requires the doing of any act in Delaware.

Petitioner observes that the terms of the statute authorizing the process of foreign attachment are general; "it does not state by whom that process may be availed; for what causes of action it may be utilized or against what foreign corporations it may issue." Nevertheless, it is argued, a construction of the statute with reference to other rules of law excludes from its ambit the writs issued in these actions. Strong reliance is placed on the case of National Bank of Wilmington & Brandywine v. Furtick, 16 Del. 35, 2 Marv. 35, 42 A. 479, 480, 44 L.R.A. 115, 69 Am. St. Rep. 99. That case was begun by foreign attachment. The plaintiff attempted to attach a credit of the defendant in the hands of an insurance company incorporated under the laws of Great Britain by summoning it as garnishee. The insurance company had qualified to do business in Delaware, and service was made upon its agent in Delaware designated pursuant to the insurance statutes. The defendant's claim against the insurance company was for a fire loss in South Carolina. A motion to vacate the attachment was granted. For present purposes, the case may be considered as though it were an action in Delaware by the defendant (a non-resident) against the garnishee (foreign) insurance company, based on the fire loss in South Carolina, a summons having been served on an agent designated by the insurance company. The Court assigned three grounds for its decision. With the first and second, we are not concerned. The third ground was that, notwithstanding general language of the designation by the insurance company of a "person or agent, within this state, upon whom service of process may be made", and the statutory provision that "all process against such company issued out of the courts of this State, may then and thereafter be served upon such person or agent so designated," 16 Del. Laws, c. 347, the insurance statute should be construed as inapplicable to an action by a nonresident, not arising out of business done in Delaware. In the opinion, the court said:

"The statute provides that, before foreign insurance companies shall be permitted to do business in this state, they must appoint an agent upon whom process may be served. The condition has relation to the permission given. The presumption is that only such jurisdiction is claimed as is necessary to deal with litigation arising out of the business that is done under this permission. 'Statutes by which the jurisdiction is assumed should be construed strictly, and should not, unless their language is explicit be held to confer jurisdiction beyond that which is required to enable the courts to take cognizance of matters arising out of the business done within the state, or else to protect and enforce the rights of the residents of their own state against foreign corporations.'

"Judge Wheeler, in a case decided in Vermont in 1874 (Sawyer v. [North American Life] Insurance Co., 46 Vt. 697), expressed very strongly the opinion that a statute providing for the appointment of an agent on whom a process might be served ought not to be construed as intending to permit a nonresident to sue a foreign corporation for a cause of action arising outside of the state. He said that, even assuming that the agent in that case had been appointed in obedience to the statute, the question still remained what cases the statute was intended to reach. A statute is to be construed with reference to the old law, the mischief, and the remedy. When this statute was passed, the old law permitted the agents of any insurance company, foreign as well as domestic, to make contracts of insurance within the state under which causes of action would accrue to our own people within the jurisdiction of the state courts. The mischief was that the jurisdiction of the state courts over these causes of action would be unavailing except upon voluntary appearance, for want of power in the courts to compel appearance. The remedy provided was the requiring of any foreign insurance company making such contract to keep an agent in this state on whom service could be made.

"This would be a full remedy for all that mischief, without requiring such companies to keep an agent here on whom any process for any purpose could be served. There could be no advantage obtained for the people of the state by providing means to give the courts of the state jurisdiction over causes of action that occurred out of the state in favor of persons not citizens of the state against a corporation existing out of the state; and it is not to be presumed that the legislature intended to accomplish that purpose unless that is the necessary result of the enactment. It is more reasonable to suppose that the intention was to provide a method for obtaining jurisdiction over a defendant to a cause of action the courts had jurisdiction of before, than that it was to provide means for obtaining jurisdiction of a cause of action where none was had before, and of the parties also, by the compulsory appointment of an agent. 12 Harv. Law Rev. 1.

"The statute...