State v. Superior Court of Spokane County

• Decision Date: 13 October 1932
• Docket Number: 24002.
• Citation: State v. Superior Court of Spokane County, 169 Wash. 688, 15 P. 2d 660 (Wash. 1932)
• Court: Washington Supreme Court
• Parties: STATE ex rel. BOND & GOODWIN & TUCKER, Inc., v. SUPERIOR COURT OF SPOKANE COUNTY et al.

15 P.2d 660

169 Wash. 688

STATE ex rel. BOND & GOODWIN & TUCKER, Inc., v. SUPERIOR COURT OF SPOKANE COUNTY et al.

No. 24002.

Supreme Court of Washington, En Banc.

October 13, 1932

As Amended on Denial of Rehearing December 2, 1932.

Application for writ of prohibition by the State of Washington on the relation of Bond & Goodwin & Tucker, Incorporated, a dissolved Delaware corporation, against the Superior Court of the State of Washington for Spokane County, and Joseph B Lindsley, judge thereof.

Writ denied in accordance with opinion.

Todd Holman & Sprague and Eugene C. Luccock, all of Seattle, for relator.

Kimball & Blake and Wakefield & Witherspoon, all of Spokane, and Herbert W. Erskine, of San Francisco, Cal., for respondents.

MAIN J.

This is an application for a writ of prohibition directed to the superior court of Spokane county.

The relator, Bond & Goodwin & Tucker, was a corporation organized under the laws of Delaware. About the year 1926, it qualified with the laws of this state relating to foreign corporations that desired to do business here. It opened an office in the city of Spokane, and appointed a statutory agent. On or about November 29, 1929, the corporation ceased to transact business in this state, and withdrew therefrom. During the same year the statutory agent left this state and went to California, where he has since continuously resided.

W. A. Monroe commenced an action in the superior court of Spokane county against the corporation, and on April 18, 1932, caused a copy of the summons and complaint to be left in the office of the secretary of state of this state. The summons and complaint were delivered to an assistant secretary of state, and were stamped 'received,' and filed. No notice of the receipt of the copy of the summons and complaint and the filing thereof was sent by that officer to the corporation or any of its officers.

By a statute of the state of Delaware, it is provided that all corporations, whether they expire by their own limitation or are otherwise dissolved, may nevertheless be continued for the term of three years from such expiration or dissolution for the purpose of prosecuting or defending suits by or against them. The notice of dissolution of the corporation was filed with the secretary of state of this state December 5, 1929. Section 3854, Rem. Comp. Stat., provides that, in case a foreign corporation shall revoke the authority of its designated agent after its withdrawal from the state and prior to the time the statutes of limitations shall run against causes of action accruing against it, 'then in that event service of process, pleadings and papers in such actions may be made upon the secretary of state of the state of Washington, and the same shall be held as due and sufficient service upon such corporation.' It will be noticed that in that provision for substituted service there is no requirement that the secretary of state shall forward notice to the corporation or to its officers. After the action was begun in the superior court, the corporation entered a special appearance and moved to quash the service, which motion was denied, and the corporation applied here for the writ above indicated.

The first question is whether the superior court had jurisdiction by reason of the service upon the secretary of state, in view of the fact that the statute of this state did not require that officer to send notice to the corporation or its officers. In this connection, it is contended that the statute is unconstitutional under the Fourteenth Amendment to the Constitution of the United States, which provides, among other things, that no state shall deprive any person of property 'without due process of law.' It is said that, in order to satisfy the requirements of the Federal Constitution, the statute should have provided that the secretary, after a copy of the summons and complaint were served upon him, should have sent notice to the corporation, the defendant in the action.

In Mutual Reserve Fund Life Ass'n v. Phelps, 190 U.S. 147, 23 S.Ct. 707, 709, 47 L.Ed. 987, a foreign corporation had gone into the state of Kentucky, complied with its laws, and afterwards ceased to do business therein because it was required to withdraw from the state. It was pointed out in the opinion that whether it voluntarily withdrew, or compulsorily, was immaterial. In that state, there was a statute which provided that, where a foreign corporation had come into the state, qualified with the laws thereof with reference to doing business, and had subsequently withdrawn, service of process could be had upon it by serving the state insurance commissioner. In that case, after referring to and quoting from the opinion of the court of appeals of Kentucky sustaining the service and commenting thereon, it was said: 'As an original question, and independently of any expression on the part of the court of appeals, we are of the opinion that such is the true construction. This and other kindred statutes enacted in various states indicate the purpose of the state that foreign corporations engaging in business within its limits shall submit the controversies growing out of that business to its courts, and not compel a citizen having such a controversy to seek the state in which the corporation has its home for the purpose of enforcing his claims. Many of those statutes simply provided that the foreign corporation should name some person or persons upon whom service of process could be made. The insufficiency of such provision is evident, for the death or removal of the agent from the state leaves the corporation without any person upon whom process can be served. In order to remedy this defect some states, Kentucky among the number, have passed statutes, like the one Before us, providing that the corporation shall consent that service may be made upon a permanent official of the state, so that the death, removal, or change of officer will not put the corporation beyond the reach of the process of the courts. It would obviously thwart this purpose if this association, having made, as the testimony shows it had made, a multitude of contracts with citizens of Kentucky, should be enabled, by simply withdrawing the authority it had given to the insurance commissioner, to compel all these parties to seek the courts of New York for the enforcement of their claims. It is true in this case the association did not voluntarily withdraw from the state, but was in effect by the state prevented from engaging in any new business.'

It is true that there is no mention made in that opinion as to whether the state statute contained a provision for notice in the event of service upon a state officer, but the doctrine is plainly stated that the corporation, by complying with the laws of the state, consented to service upon an official of the state in accordance with the laws of that state.

In Wuchter v. Pizzutti, 276 U.S. 13, 48 S.Ct. 259, 261 72 L.Ed. 446, 57 A. L. R. 1230, the court had Before it a statute of the state of New Jersey, which provided that in actions by residents of that state against nonresidents for personal injuries resulting from the operation by the latter of a motor vehicle on the state highways, service of summons could be made on the secretary of state as their agent, and it was there held that jurisdiction could not be obtained under the statute by serving the state officer, because there was no provision in the statute that the officer should give notice to the defendant. In that case, the nonresident operator of the automobile against whom the action was brought had not impliedly consented to be bound by the laws of the state of New Jersey, as is the case of a foreign corporation coming into a state to do business and qualifying with its laws. In the opinion in that case, it was pointed out that statutes providing that nonresident corporations may properly be served by leaving summons with a state officer, where the corporation has not indicated a resident agent to be served, were not particularly applicable to the situation then Before the court. After reviewing a number of decisions from the state courts, the court concluded with the statement that the general trend of authority was toward sustaining the validity of service of process, provided there is a reasonable probability that, if the statute was complied with, the defendant would receive notice. It was there held that: 'The cases, in which statutes have been upheld providing that nonresident corporations may properly be served by leaving a summons with a state official, where the corporation has not indicated a resident agent to be served, are not especially applicable to the present statute. Pennsylvania Fire Insurance Co. v. Gold Issue Mining Co., 243 U.S. 93, 37 S.Ct. 344, 61 L.Ed. 610; Simon v. Southern Ry. Co., 236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492; Old Wayne Mutual Life Association v. McDonough, 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345. Such corporations may be properly required to accept service through a public officer as a condition of their doing business in the state. Their knowledge of the statutory requirement may perhaps prompt frequent inquiry as to suits against them, or their appointed agent or at the office of the public official to be served, but it could hardly be fair or reasonable to require a nonresident individual owner of a motor vehicle who may use the state highways to make constant inquiry of the secretary of state to learn whether he has been sued. Even in cases of nonresident corporations, it has been held that a statute directing service upon them by leaving process with a state official is void if it contains no provision requiring the official, upon whom the service may be made, to give the...