Stonega Coke & Coal Co. v. Southern Steel Co.

• Decision Date: 26 November 1910
• Parties: STONEGA COKE & COAL CO. v. SOUTHERN STEEL CO.
• Court: Tennessee Supreme Court

131 S.W. 988

123 Tenn. 428

STONEGA COKE & COAL CO. v. SOUTHERN STEEL CO.

Supreme Court of Tennessee.

November 26, 1910

Appeal from Chancery Court, Hamilton County; T. M. McConnell Chancellor.

Suit by the Stonega Coke & Coal Company against the Southern Steel Company. From a decree dismissing a bill for an attachment and awarding complainant a less amount than claimed complainant appeals. Affirmed.

A. W Gaines, for appellant.

Chambliss & Chambliss and Williams & Lancaster, for appellee.

BEARD J.

This is an original attachment suit begun by the complainant in the chancery court of Hamilton county against the defendant to recover a large indebtedness alleged to be due on open account. The ground set up in the bill for the attachment was that the defendant was a corporation organized under the laws of Alabama, and a nonresident of this state. A writ of attachment was issued, which, on the same day, was levied on the property of the defendant. Immediately thereafter the defendant executed a replevy bond and regained possession of the property levied on. Subsequent thereto the defendant filed a plea in abatement in the words and figures following: "The defendant, Southern Steel Company, for plea in abatement to the original attachment and suit in this cause says that at the time this suit was brought and the attachment sued out herein, on the ground of nonresidence, and for many months previous thereto, the said defendant had an office and agents, superintendents, servants, clerks, bookkeepers, and representatives, in Hamilton county, the county in which the suit was brought, and was conducting an extensive business and operating a large blast furnace in said county; that these facts were well known to the complainant, its agents and representatives; and that this suit grows out of the business so carried on in said county of Hamilton. And defendant further says that, while it is a corporation chartered by the state of Alabama, before the bringing of this suit it had filed a copy of its charter with the Secretary of State of Tennessee, and had in all respects complied with the laws of Tennessee prescribing the terms upon which foreign corporations may become incorporated in and do business in Tennessee, and this defendant, therefore, says that it was not subject to suit by original attachment and publication as a nonresident, and that, no proper service having been made upon the defendant, this court is without jurisdiction; wherefore, defendant prays that said suit be abated and quashed, the property released, and said suit dismissed." Another ground of abatement was alleged in the plea, but, as it was afterwards abandoned in the progress of the cause, it need not be set out.

On the same day, and contemporaneously with the filing of the plea, an answer was filed denying that the defendant was indebted to the complainant to the extent claimed by the bill. Afterward personal process was issued and served on a resident officer of the defendant.

The proof showing the averments of defendant's plea to be true in fact, on the hearing the chancellor decreed that the attachment was wrongfully sued out, and dismissed the bill, in so far as it prayed for the writ; and, also, that complainant was entitled to recovery of defendant, but not in the full amount claimed. To ascertain the real indebtedness due, a reference was ordered. From this decree complainant has appealed to this court.

The first assignment of error made by complainant is to the action of the chancellor in decreeing the attachment void and of no effect.

The counsel of complainant in their printed argument have presented a carefully prepared historic review of the statutes of the state, in which is shown the gradual development of the law of attachment, beginning with chapter 43 of the Acts of 1835-36. We deem it unnecessary to follow this review, inasmuch as the statutes regulating the issue of a general attachment were brought forward into section 3455 of the Code of 1858 (section 5211, Shannon's Code). Among the grounds upon which a writ of attachment may be had is that "the debtor or defendant resides out of the state." Unquestionably, under this section, as could have been done under the earlier statutes, in a case of a nonresident corporation, an attachment might issue at the proper instance of its creditors to reach its assets lying within the jurisdiction of the courts, and sections 2831 to 2833 of the Code of 1858 (sections 4539 to 4541, Shannon's Code) no more conflict with or modify it than did chapter 55 of the Acts of 1845-46, chapter 136 of the Acts of 1849-50, chapter 136 of the Acts of 1851-52, or chapter 89 of the Acts of 1859-60, modify or repeal by implication chapter 43 of the Acts of 1835-36, chapter 166 of the Acts of 1837-38, or chapter 29 of the Acts of 1843-44.

In the cases provided for in the Code, "the attachment and publication are in lieu of personal service," while sections 2831 to 2833 of the Code of 1858 (sections 4539-4541, Shannon's Code) provide for personal service on officers or agents of corporations, and apply to foreign as well as domestic corporations. Railroad v. Walker, 9 Lea, 475; Peters v. Neely, 16 Lea, 275; Holland v. Railroad Co., 16 Lea, 414.

Up to 1877, as a matter of comity, and without special legislation, foreign corporations were admitted to do business in this state. By chapter 31 of the Acts of that year the Legislature made a radical departure, by affixing terms and conditions to their entry into Tennessee for the purpose of doing business, or acquiring or disposing of real estate, but confined the scope of the act to foreign corporations organized for mining and manufacturing purposes. By the first section of this act it is provided "that corporations chartered or organized under the laws of other states or countries, for the purpose of mining ores or coal, or quarrying stone or minerals *** or carrying on works for manufacturing of metals *** may become incorporated in this state, and may carry on in this state the business authorized by their respective charters *** upon the terms and conditions *** herein declared." By the second section it is enacted that a corporation, within the purview of the first section, "desiring to carry on business in this state must file in the office of the Secretary of State a copy of its charter *** certified in the manner directed by law *** and must cause an abstract of the same to be recorded in the office of the register of each county in which such corporation proposes to carry on its business, or to acquire lands." The third section is as follows: "That such corporations shall be deemed and taken to be corporations of this state and shall be subject to the jurisdiction of the courts of this state, and may sue and be sued therein in the mode and manner that is, may be, by law directed in the case of corporations created or organized under the laws of this state."

Thus it will be seen that the first section provides in terms that corporations for whose benefit the act was intended, taking advantage of it, "might become incorporated in this state" upon the terms and conditions and in the manner prescribed; while the second section sets out the terms and conditions on which and the manner in which this may be done; and the third in express terms declares "that such corporations shall be deemed and taken to be corporations of this state."

Thus stood our legislation as to foreign corporations until the passage of the statute in the year 1891. Chapter 122 of the Session Acts of the General Assembly of that year. This act, as its caption declared, was amendatory of the act of 1877. By its first section it was enacted that chapter 31 of the Acts of 1877 be so enlarged that its provision should apply to all foreign corporations organized "for any purpose whatever." The second section, in substance, repeats the terms, conditions, etc., as prescribed by the act of 1877 for the entry of such corporations into the state; the third section makes it unlawful, and fixes a penalty, for any such corporation to do, or attempt to do, business or acquire property in this state without complying with the terms prescribed. The fourth is in the following words: "When a corporation complies with the provisions of this act, it shall then be, to all intents and purposes, a domestic corporation, and may sue and be sued in the courts of this state, and is subject to the jurisdiction of the courts of the state just as though it were created under the laws of the state."

Thus it will be seen the Legislature by this amendatory act opened the door to all foreign corporations and declared that any such corporation, coming into the state and complying with these statutory requirements, shall become "to all intents and purposes a domestic corporation." Conceding the power of the Legislature to pass such statutes, it would be difficult to find language which would more clearly indicate its intention to thoroughly domesticate such corporations.

Coming now to the act of 1895, chapter 81 of the published Acts of that year, we find from its caption that it was intended to amend sections 2, 3, and 4 of chapter 122 of the Session Acts of 1891. This statute, so far as it is pertinent to this controversy, is as follows:

"Sec. 1. Be it enacted by the General Assembly of the state of Tennessee, that section 2 of an act passed March 21, 1891, being chapter 122 of said acts, be so amended as to read as follows: 'that each and every corporation created or organized under and by virtue of any government other than of the state, for any purpose whatever, desiring to own property or carry on business in this state of any kind or character, shall first file in the office of Secretary of State a copy of

...