Venner v. Denver Union Water Co.

• Decision Date: 03 June 1907
• Citation: Venner v. Denver Union Water Co., 40 Colo. 212, 90 P. 623 (Colo. 1907)
• Parties: VENNER et al. v. DENVER UNION WATER CO. et al.
• Court: Colorado Supreme Court

90 P. 623

40 Colo. 212

VENNER et al. v. DENVER UNION WATER CO. et al.

Supreme Court of Colorado, En Banc.

June 3, 1907

Appeal from District Court, Arapahoe County; N. Walter Dixon, Judge.

Action by Charles H. Venner and others against the Denver Union Water Company and others, to which action John S. McMasters receiver, became a party. From a judgment for defendants except the receiver, plaintiff and the receiver appeal. Affirmed.

Yeaman & Gove and Henry B. Babb, for appellants.

C. J Hughes, Jr., for appellee Denver Union Water Co.

Wolcott, Vaile & Waterman (W. W. Field, or counsel), for appellee Continental Trust Co. of New York.

GABBERT J.

Appellants, except John S. McMasters, receiver, as stockholders of the American Waterworkds Company of New Jersey, commenced an action against the Denver Union Water Company, the Denver Water Company, the Farmers' Loan & Trust Company, the Denver City Waterworks Company, the Central Trust Company of New York, the American Waterworks Company, Dennis Sullivan, William A. Underwood, the Continental Trust Company, James V. Dexter, Charles D. McPhee, Catherine Archer, Carlos G. Greeley, James B. Grant, and David H. Moffat, the purpose of which was to annul two decrees entered in suits foreclosing mortgages upon property now claimed by the Denver Union Water Company, title to which was obtained through sales of this property under these foreclosure decrees. Plaintiffs claimed that the property affected by these decrees belonged to the American Waterworks Company, and the grounds upon which they sought to avoid such decrees were: (1) Failure of the court to acquire jurisdiction of the person of the American Waterworks Company in the foreclosure suits; (2) failure of the court to acquire jurisdiction of part of the subject-matter involved in such suits; (3) error manifest upon the record of the foreclosure proceedings; (4) fraud in procuring the decrees and in the subsequent proceedings attacked. To this action John S. McMaster, receiver, became or was made a party defendant. To his answer the Denver Union Water Company and the Central Trust Company filed cross-bills. The trial resulted in a judgment for the defendants, excepting the receiver, from which the plaintiffs and the receiver appeal.

The property in question was subject to the following mortgages: One executed by the Denver City Water Company for $250,000, one executed by the Denver City Irrigation & Water Company (a previous owner of part of the property involved) for $100,000, and one executed by the Domestic Water Company (a previous owner of some of the property in controversy) for $150,000. For convenience these mortgages will be referred to as the 'underlying mortgages.' In January, 1890, the Denver Water Company, which had succeeded to the property covered by these mortgages, executed its mortgage to the Farmers' Loan & Trust Company to secure bonds aggregating $2,500,000. This mortgage was subject to the underlying mortgages. In November, 1890, the Denver City Waterworks Company was organized and secured a conveyance from the Denver Water Company of the property of the latter, except certain parcels of real estate described in a deed from the Denver Water Company to James B. Grant, trustee for the Denver City Waterworks Company. Thereafter the Denver City Waterworks Company executed its mortgage to the Central Trust Company to secure bonds aggregating $7,000,000. The several water companies above mentioned were Colorado corporations. In April, 1891, the American Waterworks Company was organized under the laws of New Jersey, and thereafter filed with the proper officials in this state the certificate necessary to authorize it to transact business in Colorado, designating Francis P. McManus as the agent upon whom process might be served. Dennis Sullivan and Clarence H. Venner were elected directors and vice presidents of this company. Later the Denver City Waterworks Company conveyed all its property, including the beneficial interest in the Grant trust property, to the American Waterworks Company, which thereupon took possession thereof and operated it. On February 2, 1892, suits were commenced in the district court of Arapahoe county to foreclose the underlying mortgages executed by the Domestic Water Company and the Denver City Water Company. To these actions the American Waterworks Company was made a party defendant. In these actions summonses were returned, with certificates of service upon the defendant company by leaving copies with Dennis Sullivan, president, which return was subsequently amended in the latter case by a statement to the effect that a copy of the summons was handed Dennis Sullivan, vice president. These actions were consolidated, and an order made appointing Mr. Sullivan receiver, to take charge and management of the property of the American Waterworks Company, and to carry on its business until the further order of the court. The receiver qualified and entered upon the performance of his duties as such receiver, and continued so to do until after the sale under the foreclosure decrees. On June 1, 1892, the Farmers' Loan & Trust Company commenced an action in the district court of Arapahoe county to foreclose the mortgage to it. The American Waterworks Company was made a party defendant to this suit. Summons was issued and returned, with a certificate to the effect that it had been served upon the defendant company by delivering a copy to Dennis Sullivan, president of the American Waterworks Company. Mr. Sullivan was also appointed receiver in this action, and it was consolidated with the two commenced on the underlying mortgages, and a decree foreclosing the mortgages in question subsequently entered. In October, 1892, the Central Trust Company commenced an action in the district court of Arapahoe county to foreclose the mortgage executed to it by the Denver City Waterworks Company. To this action the American Waterworks Company was also made a party defendant. Summons therein was served by delivering a copy thereof to Clarence H. Venner, vice president of the defendant company, at the city of Denver. A decree of foreclosure was also entered in this action, and the property embraced in the several mortgages sold under the order of the court. The other facts necessary to an understanding of the questions presented will be stated in connection with the questions discussed and determined.

The first point made by counsel for plaintiffs is that, the American Waterworks Company having designated an agent for service of process, service of the summons upon any other person was not valid service upon the company. Article 15, § 10, of our Constitution provides that 'no foreign corporation shall do any business in this state without having one or more known places of business, and an authorized agent or agents in the same upon whom process may be served.' Pursuant to this provision it was enacted that 'foreign corporations shall, before they are authorized or permitted to do any business in this state, make and file a certificate, signed by the president and secretary of such corporation, duly acknowledged, with the Secretary of State, and in the office of the recorder of deeds of the county in which such business is carried on, designating the principal place where the business of such corporation shall be carried on in this state, and an authorized agent or agents in this state residing at its principal place of business upon whom process may be served. * * *' Section 499, 1 Mills' Ann. St. There is nothing in either of these provisions indicating that the agent appointed by a foreign corporation engaged in business in this state is the only agent upon whom summons in an action can be served. Their evident purpose was to compel foreign corporations, as a condition precedent to engaging in business in this state, to appoint an agent upon whom process issued from our courts might be served, so that citizens of the state, in order to redress their grievances, might not be compelled to resort to a foreign forum in order to institute and maintain an action against such corporation, by providing against the contingency of such corporation's engaging in business in this state without having some official representing it therein upon whom summons issued from our courts might be served. Our Code regulates proceedings in civil matters, and it is there provided (subdivision 9, § 38, Mills' Ann. Code): 'If the action be against a foreign corporation * * * organized under the laws of another state * * * and doing business within this state, the summons shall be served by delivering a copy to any agent of such corporation, company or association found in the county in which the action is brought.' This clearly indicates an intention on the part of the Legislature to provide that, notwithstanding another provision requiring foreign corporations engaging in business in this state to appoint an agent upon whom process may be served, such process may be served upon any agent embraced within the terms of the Code to which we have just referred.

It is clearly within the power of the state to provide through the General Assembly what agents of corporations doing business within her limits may be served with process, provided, of course, that such provisions are reasonable, and the service provided for shall be upon such agents as may be properly deemed representatives of such foreign corporations. Our General Assembly has made provision for this purpose, which embraces any agent of foreign corporations engaging in business in this state. We therefore conclude that the provisions of the Constitution and statute referred to requiring foreign corporations who desire to engage in business in this state to appoint and...