Trojan Eng'g Corp. v. Green Mountain Power Corp.

• Decision Date: 05 February 1936
• Citation: 293 Mass. 377,200 N.E. 117
• Parties: TROJAN ENGINEERING CORPORATION v. GREEN MOUNTAIN POWER CORPORATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

293 Mass. 377

200 N.E. 117

TROJAN ENGINEERING CORPORATION

v.GREEN MOUNTAIN POWER CORPORATION.

Supreme Judicial Court of Massachusetts, Suffolk.

Feb. 5, 1936.

Report from Superior Court, Suffolk County; Weed, Judge.

Action of contract by the Trojan Engineering Corporation against the Green Mountain Power Corporation, wherein an answer in abatement by the defendant was overruled. On report from the superior court.

Order overruling the answer in abatement affirmed, and defendant's exceptions overruled.

R. G. Dodge and W. S. Youngman, both of Boston, for plaintiff.

P. N. Jones, of Boston, for defendant.

RUGG, Chief Justice.

This action is to recover a balance alleged to be due on a contract whereby the plaintiff rendered engineering services to the defendant and supplied materials for construction work. The plaintiff is a Delaware corporation with its principal place of business in New York. The defendant is a Vermont corporation. Service was made by trustee process upon two Boston banks, which answered ‘effects' in small amounts, and upon the principal defendant by delivering an attested copy of the writ to F. J. Dunn, president of the defendant, at his usual place of business in Boston. The defendant appeared specially for the sole purpose of challenging the jurisdiction of the court on the grounds that it was doing no business within Massachusetts, that the cause of action arose outside the Commonwealth, that the prosecution of the action in this Commonwealth would unduly burden its interstate commerce, and that inconvenience to the parties of a trial in Massachusetts should lead the court to refuse jurisdiction as a discretionary matter. The trial judge overruled the answer, filed detailed findings, ruled upon the parties' requests for findings and rulings, and reported the case to this court.

These further facts appear from the report: The defendant is a Vermont corporation engaged in the generation and distribution of gas and electricity within Vermont; one of its transmission lines supplies electricity in a small area across the New Hampshire boundary. This constitutes an insubstantial part of the business of the defendant, although it is affected with a public interest. The defendant has no tangible property in Massachusetts and has never engaged in the generation or distribution of electricity or gas within this Commonwealth.

Prior to November, 1931, the owner of all the common stock of the defendant was a New York corporation which also controlled the plaintiff. The contract on which the present action is based was made and work under it completed during that period. The cause of action arose from dealings entirely outside Massachusetts. On November 30, 1931, the common stock of the defendant was purchased by the New England Power Association, a Massachusetts voluntary association with its offices in Boston. It is hereafter called the association. A new president, treasurer and directors of the defendant were elected, though the general manager and assistant treasurer, who were the executive officers in Vermont, continued in office. Six of the directors reside in Vermont and the other five in Massachusetts, where they are also employees of the New England Power Engineering and Service Corporation, hereafter called the service corporation, a subsidiary of the association wholly owned by it and employing a large group of highly trained and skilled no tangible property in Massachusetts and The association was formed for the purpose of providing technical skill and service to about sixty operating companies controlled by the association. The service corporation has its place of business in Boston in the same building with the association. There were located the offices of the defendant's president, F. J. Dunn, and its treasurer, two vice presidents, assistant treasurer and secretary, all of whom resided in Massachusetts. a comprehensive corporation to have at hand data as to the service corporation supplied the defendant with executive and detailed administrative services covering its accounting, purchasing, station operation, power sales, engineering and construction. It was dated in December, 1932, and was to and decision by the officers 1933, and to continue through December 31, 1934. It was the practice for the service corporation to have at hand date as to the defendant's operations, supplies, and administrative and financial problems. As a result many if not all of the major problems arising with respect to the defendant's business were referred by the Vermont executive officers to Boston for consideration and decision by the officers there. Other matters, more particularly with reference to large loans or permanent financing, originated with or were handled chiefly by the Boston officers of the defendant with the advice and assistance of persons connected with the service corporation. Two bank accounts were maintained in Boston, and half the meetings of the directors were held there. Important contracts, including notes binding the defendant, were executed by its officers in Boston. A large volume of correspondence was sent and received in the defendant's name over the Boston address of the service corporation. The defendant rents no office in Boston, and its name does not appear on any Boston office door or in the Boston directory or telephone book. The defendant's transfer agent is a Boston bank. It was part of the contract of the service corporation to furnish a suitable room in Boston in which may be held meetings of the stockholders and directors and committees of stockholders or directors of the defendant. Many of the valuable documents of the defendant were reqularly kept in Boston. Among the matters constantly managed at Boston by the Boston officers of the defendant were the collection of debts and disposition of questionable bills, affairs involving the Vermont public service commission, accounting and bookkeeping, and methods of making up monthly reports. Financial information as to the defendant was given out exclusively by the Massachusetts officers of the defendant acting at Boston. Insurance and tax matters were regularly managed and adjusted in the same way. It is not necessary to recite in further detail the nature and extent of business of the defendant transacted at Boston.

The relevant statutes are G.L.(Ter.Ed.) c. 223, §§ 37, 38. The latter section, so far as material, provides that, ‘In an action against a foreign corporation, except an insurance company, which has a usual place of business in the commonwealth, or, with or without such usual place of business, is engaged in or soliciting business in the commonwealth,permanently or temporarily, service may be made in accordance with the provisions of the preceding section relative to service on domestic corporations in general.’ It is provided by section 37 that, in an action against a domestic corporation with exceptions not here material, service may be made ‘upon the president * * * or other officer in charge of its business.’

The trial judge found that the defendant was engaged in business in this Commonwealth at the time when service was made of the writ in the present action upon its president, and that its president was then and there the officer in charge of its business. That conclusion seems to us necessarily to follow from the facts already narrated. Important and essential corporate functions of the defendant centered in Boston, although its physical operations took place in Vermont. The activities in Boston of its president, treasurer and other officers constituted business of the defendant in Boston.

This point seems to us to be amply covered by authority. The business activities of the defendant within the Commonwealth were greatly in excess of those of the defendant in Reynolds v. Missouri, Kansas & Texas R. Co., 224 Mass. 379, 113 N.E. 413, affirmed in 255 U.S. 565, 41 S.Ct. 446, 65 L.Ed. 788;Plibrico Jointless Firebrick Co. v. Waltham Bleachery & Dye Works, 274 Mass. 281, 286, 174 N.E. 487;Browning-Drake Corporation v. AmerTran Sales Co., 274 Mass. 545, 548, 175 N.E. 45;St. Louis Southwestern R. Co. v. Alexander, 227 U.S. 218, 228, 33 S.Ct. 245, 57 L.Ed. 486, Ann.Cas. 1915B, 77;Washington-Virginia R. Co. v. Real Estate Trust Co., 238 U.S. 185, 35 S.Ct. 818, 59 L.Ed. 1262. See, also, Marconi Wireless Telegraph Co. v. Commonwealth, 218 Mass. 558, 576-579, 106 N.E. 310, Ann.Cas. 1916C, 214, affirmed sub nomine Cheney Brothers Co. v. Massachusetts, 246 U.S. 147, 155, 156, 38 S.Ct. 295, 62 L.Ed. 632, and Atlantic Lumber Co. v. Commissioner of Corporations and Taxation (Mass.) 197 N.E. 525.

The business of the defendant in Boston was not conducted exclusively through the service corporation as an independent agent. Dominant executive officers of the defendant were resident within the Commonwealth and acting here continuously in its behalf. Cases relied upon by the defendant like Bank of America v. Whitney Central National Bank, 261 U.S. 171, 43 S.Ct. 311, 67 L.Ed. 594, and Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634, are distinguishable in the facts from the case at bar. The defendant, because doing business in this Commonwealth, was subject to service here in conformity to the general rule formulated in People's Tobacco Co., Ltd., v. American Tobacco Co., 246 U.S. 79, 87, 38 S.Ct. 233, 62 L.Ed. 587, Ann.Cas. 1918C, 537, and quoted with approval in Consolidated Textile Corporation v. Gregory, 289 U.S. 85, 88, 53 S.Ct. 529, 530, 77 L.Ed. 1047, in these words: ‘The general rule deducible from all our...