State v. Winstead

• Decision Date: 24 October 1945
• Docket Number: 7263
• Citation: 66 Idaho 504,162 P.2d 894
• Parties: STATE OF IDAHO, Plaintiff, v. CHARLES E. WINSTEAD, One of the Judges of the District Court of the Third Judicial District, for Ada County, Defendant
• Court: Idaho Supreme Court

162 P.2d 894

66 Idaho 504

STATE OF IDAHO, Plaintiff, v. CHARLES E. WINSTEAD, One of the Judges of the District Court of the Third Judicial District, for Ada County, Defendant

No. 7263

Supreme Court of Idaho

October 24, 1945

1. Mandamus

Writ of mandate is proper remedy to test jurisdiction of trial court. (I.C.A., sec. 13-302.)

2. Corporations

Foreign corporation, which maintained in state for salesmen's use two automobiles licensed and registered in name of corporation, was "doing business in the state" so as to give district court jurisdiction of action by state to recover excise taxes due under Unemployment Compensation Law. (I.C.A., secs. 5-507, subd. 3, 6-532, 13-302; Sess. Laws 1935, 3rd Ex. Sess., chap. 12.)

Original application for writ of mandate.

Writ made permanent and cause remanded, with directions.

Frank Langley, Attorney General, and Thos. Y. Gwilliam, Assistant Attorney General, for plaintiff.

International Shoe Co. is and was doing business in the State of Idaho pursuant to the unemployment compensation law so that service of process on the county auditor pursuant to Section 5-507, I.C.A., gave court jurisdiction. (International Shoe Co. v. State of Washington, 154 P.2d 801; International Harvester Co. v. Kentucky, 58 L. ed. 1479, 34 S.Ct. 944; Sec. 43-2309, I.C.A., chap. 203, 1945 Session Laws; 26 U.S.C. Internal Revenue Code, Sec. 1606A; Boise Flight Service v. Motor Acceptance Corp., 55 Ida. 5, 36 P.2d 813; Fletcher's on Corp., sec. 8713, sec. 8643, sec. 4729; 23 Am. Jur. 379, sec. 351.)

Jess Hawley and Claude V. Marcus for defendant.

Mandamus will lie only when the right to the issuance of the writ is clear. (Brooks v. Edgington, 40 Ida. 432, 233 P. 514; Renard v. City of Caldwell, 53 Ida. 62, 21 P.2d 527.)

Mandamus is not the proper remedy where the right of appeal exists unless it clearly appears the remedy by appeal is inadequate. (Berdine v. Varian, 34 Ida. 587, 202 P. 567.)

Defendant corporation was engaged in interstate commerce and was not engaged in "doing business" in Idaho and not subject to the substitute service of process attempted to be made herein. (Toledo Computing Scales Co. v. Young, 16 Ida. 187, 101 P. 257; Phillips v. Manufacturers Trust Co., C.C.A. 9th Ct. 1939, 101 F.2d 723; Foore Simon Piano Co., 18 Ida. 167, 108 P. 1038; Furst v. Brester, 282 U.S. 493, 75 L. ed. 478; Bauch v. Weber Flour Mills Co. (Me.), 238 S.W. 581.)

A foreign corporation exclusively engaged in interstate commerce is not subject to local taxation. (Puget Sound Stevedoring Co. v. Tax Commissioner of the State of Washington, 302 U.S. 90, 82 L. ed. 68; McLeod, Commissioner v. J. E. Dillworth Co. & Reichman-Crosby Co., 88 L. ed. 810, 64 S.C.R. 1023; Alpha Portland Cement Co. v. Massachusetts, 268 U.S. 203, 69 L. ed. 916.)

Ailshie, C.J. Givens, and Holden, JJ., concur. Budge, J., dissents. Miller, J., did not participate.

OPINION

Ailshie, C.J.

In May, 1943, suit was filed in the district court of the third judicial district, in the case of State, Plaintiff, v. International Shoe Company, Defendant, praying for judgment against defendant in the amount of $ 2,018.00 for excise taxes due plaintiff, under the Unemployment Compensation Law, together with interest amounting to $ 497.71, penalty in the amount of $ 504.50, and for other interest and penalty allegedly due on date of judgment, and costs of suit.

In June, 1943, service of summons, made under the provisions of sec. 5-507, subd. 3, I.C.A., was attempted. March 17, 1944, attachment issued and, April 13, '44, the defendant, International Shoe Co., moved that service of summons be quashed, for the reason that the company was not engaged in business within the state but was engaged in interstate commerce. Writ of attachment issued and the sheriff levied upon and took into custody two automobiles, a Dodge sedan and a Plymouth car, both registered in the name of the International Shoe Company and displaying 1945 licenses. The certificates of registration stated that the residence of the owner of the vehicles was in Ada county of this state. About July 24, 1944, the lower court made an order quashing the service. Stipulation was entered into between counsel for the parties and deposited with the sheriff, together with a bond, under which the shriff returned the attached automobiles to the possession of the agents of the International Shoe Co. The court made no order in pursuance of I.C.A., sec. 6-532.

July 26, '44, memorandum opinion was handed down by the lower court, holding that "defendant corporation is a foreign corporation engaged solely in interstate commerce, and is not doing business within the State of Idaho either generally or under the Idaho Unemployment Compensation Law; that the service of summons attempted to be made under sec. 5-507, subdivision 3, I.C.A., was invalid and did not give this court jurisdiction of such defendant; that the Motion to Quash is well taken and must be sustained."

Thereafter summons was again attempted to be served on order of the court dated September 8, '44, permitting service outside the state. September 18, '44, service was made and returned. Motion to quash this alleged service was made. May 11, 1945, a second memorandum opinion by the lower court was filed, holding that court to be without jurisdiction in the premises and that the motion to quash must be sustained. June 11, '45, an order quashing the service of summon was entered.

June 29, 1945, an application for writ of mandate was filed in this court, seeking issuance of an alternative writ, requiring and directing defendant judge to assume jurisdiction of the action against defendant, International Shoe Company, or to show cause before the court at a time set, why he should not be compelled so to do. The application was accompanied by an affidavit of the secretary of the International Shoe Co., stating, among other things:

"That International Shoe Company is a corporation organized and existing under and by virtue of the laws of the State of Delaware, having its principal place of business in the city of St. Louis and State of Missouri; [ILLEGIBLE TEXT],

"That it has qualified to do business in some eight states of the United States . . . that none of its factories, subsidiary plants or selling divisions are located in the State of Idaho;

"That it has not qualified to do business in the State of Idaho; . . .

"That it does not ship any goods into the State of Idaho for sale on consignment; that it does not make any contracts in the State of Idaho, and does no intra-state business in the State of Idaho in any manner whatsoever; . . .

"Salesmen for the International Shoe Company are limited in their work and authority to the solicitation of orders for merchandise from samples which are supplied to them by the Company's St. Louis, Missouri offices. Salesmen do not and cannot fix prices, nor accept orders, nor fill orders, nor deliver merchandise . . .

"All sales proceeds are payable at the offices of the Company in St. Louis, Missouri, and all collections of outstanding accounts are made by the Company from its offices in the State of Missouri.

"All compensation of salesmen is payable from the Company's office in the State of Missouri, and as to all of their activities salesmen are answerable to the Company in the State of Missouri." (Italics ours.)

Counter affidavit was filed by the attorney general's office, declaring:

"That the said International Shoe Company has within the State of Idaho at least three salesmen whose residences are within the State of Idaho, and at various times have had more or less than three such agents; that the said agents performed services for the said International Shoe Company by taking orders from various purchasers of shoes within the State of Idaho; and that the services performed for the International Shoe Company are performed both within the State of Idaho and outside the State of Idaho, but the principal part of the services rendered are within the State of Idaho;

"That one of the purposes for which the International Shoe Company was organized as shown in its Articles of Incorporation was for the sale and distribution of shoes; that the agents in Idaho are engaged in the sale and distribution of shoes."

Alternative writ of mandate issued July 21, '45, commanding Charles E. Winstead, district judge, to reassume jurisdiction of the action for unemployment compensation excise tax, to hear and dispose of the same, on its merits, without reference to the jurisdictional question, or to show cause to the contrary before this court on a day set. By order of this court, briefs were filed, including citations of authority in support of the application for writ and brief in opposition to the application.

Under the statute, sec. 13-302, I.C.A., and Hill v. Morgan, 9 Ida. 718, 76 P. 323, Coeur d'Alenes Lead Co. v. Kingsbury, 56 Ida. 475, 55 P.2d 1307, and Mattice v. Babcock, 52 Ida. 653, 20 P.2d 207, the writ of mandate is the proper remedy to test the jurisdiction of the trial court.

In Hill v. Morgan, supra, this court said:

"When the tribunal or officer whose duty it is to take jurisdiction of a matter believing, erroneously, that it has no jurisdiction, declines to consider the matter, mandamus will issue to compel action."

We now pass to the more important and decisive question on which the trial court acted, namely: Is the International Shoe Company doing business in the state, within the meaning of the unemployment compensation act and the generally accepted judicial opinion of what constitutes "doing business" in the state?

The company (International Shoe Company) contends that the district court had no jurisdiction of it because it was engaged in interstate business...