Yoder v. Nu-Enamel Corporation, 11771.

• Decision Date: 27 March 1941
• Docket Number: No. 11771.,11771.
• Citation: 117 F.2d 488
• Parties: YODER et al. v. NU-ENAMEL CORPORATION.
• Court: U.S. Court of Appeals — Eighth Circuit

117 F.2d 488 (1941)

YODER et al. v. NU-ENAMEL CORPORATION.

No. 11771.

Circuit Court of Appeals, Eighth Circuit.

February 11, 1941.

Rehearing Denied March 27, 1941.

Sterling F. Mutz, of Lincoln, Neb., for appellants.

George W. Becker, of Omaha, Neb., (Francis L. Boutell, of Chicago, Ill., and Isidor Ziegler, I. J. Dunn, and D. L. Manoli, all of Omaha, Neb., on the brief), for appellee.

Before GARDNER, WOODROUGH, and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The controlling questions are (1) whether the statutes of Nebraska authorize service of summons to be made upon the state auditor of public accounts, as against a foreign corporation that has been doing business in the state without qualifying and without appointing a resident agent, and (2), if so, whether such service may be made upon the state auditor after the corporation has ceased to do business in the state, on a cause of action arising out of its previous transaction of business therein.

The issues arise in an appeal by plaintiffs from a dismissal of their action by the district court, after an order sustaining defendant's special appearance and quashing the service of summons had upon the state auditor, and after plaintiffs' election to stand upon the service as made.

The action was one to recover damages for fraud in connection with a contract between plaintiffs and defendant, made in Nebraska, for the sale to plaintiffs, among other things, of three retail stores which defendant had been operating in that state. Suit was brought in the state court in Lancaster County, where the contract was executed, where part of it was to be performed, and where plaintiffs resided. It was removed by defendant to the federal court. Defendant was a Delaware corporation. It had never qualified in Nebraska or appointed a resident agent for service of process, and, before plaintiffs' action was instituted, it had ceased to do business in the state.

The material statute of Nebraska is § 24-1201. Neb.Comp.St.1929, which provides: "Such foreign corporation shall also make and file a certificate * * * appointing an agent or agents in this state * * * upon whom process, or other legal notice of the commencement of any legal proceeding, or in the prosecution thereof, may be served; and such service of process or of any such other legal notice, as aforesaid upon the auditor of public accounts, or upon any such agent, or agents, shall constitute valid service upon such corporation in all courts of this state, in counties where the cause of action, or some part thereof, arose, or in counties where the contract, or portion thereof entered into by such corporation has been violated or is to be performed." Another statute (Neb. Comp.St.1929, § 24-1206) prescribes a penalty for the failure of a foreign corporation, doing business in the state, to appoint a resident agent, but there is no provision invalidating such contracts as the corporation may have made.

In the application of a state statute, the federal courts are, of course, bound by the construction made by the courts of the state. Senn v. Tile Layers Union, 301 U.S. 468, 57 S.Ct. 857, 81 L.Ed. 1229. And the obligation to accept local interpretation extends not merely to definitive decisions, but to considered dicta as well. Hawks v. Hamill, 288 U.S. 52, 53 S.Ct. 240, 77 L.Ed. 610; Badger v. Hoidale, 8 Cir., 88 F.2d 208, 109 A.L.R. 798. Indeed, under the implications of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, and West v. American Telephone and Telegraph Co., 61 S.Ct. 179, 85 L.Ed. ___, where direct expression by an authorized state tribunal is lacking, it is the duty of the federal court, in dealing with matters of either common law or statute, to have regard for any persuasive data that is available, such as compelling inferences or logical implications from other related adjudications and considered pronouncements. The responsibility of the federal courts, in matters of local law, is not to formulate the legal mind of the state, but merely to ascertain and apply it. Any convincing manifestation of local law, having a clear root in judicial conscience and responsibility, whether resting in direct expression or obvious implication and inference, should accordingly be given appropriate heed.

On the first question for determination, defendant argues, in support of the trial court's judgment, that the statute does not authorize service of process upon the state auditor, as the agent of a foreign corporation, unless the corporation has filed an appointment of him for this purpose. Reliance is placed upon an expression in Schwabe v. American Rural Credits Association, 104 Neb. 46, 175 N.W. 673, and the view there indicated supports defendant's contention. In the later case, however, of Wilken v. Moorman Manufacturing Co., 121 Neb. 1, 235 N.W. 671, 672. where a foreign corporation was doing business in the state without having qualified or made any...