Summary
In Condon v. Snipes, 205 Miss. 306, 38 So.2d 752, the appellant sued on appellee's alleged breach of his contract to eradicate termites.
Summary of this case from Livestock Services v. Amer. CyanamidOpinion
February 14, 1949.
1. Termite eradication — license by State.
A person who engages in the business of termite eradication in this State is subject to Secs. 5006-5011, Code of 1942, — enacted to protect against fraudulent practices — and must first obtain a license from the State Plant Board, as provided by the cited statutes.
2. Constitutional law — service of process on nonresident doing licensed business in the State.
A nonresident who does a business in this State, under a license by the State, thereby consents that in any action against him, accruing in this State out of that business, process binding upon him may be served upon the Secretary of State, and Secs. 1437-1441, Code of 1942, (Chap. 246, Laws 1940), so providing, are not violative of the due process or the immunities and privileges clauses of the federal constitution.
3. Process — nonresident who was resident.
A nonresident doing business in this State, under State regulation, is amenable to the nonresident process statute, Secs. 1437-1441, Code of 1942, as to business transacted in the State, and it is immaterial that he was a resident of this State at the time the contract, out of which the action accrued, was made.
Headnotes as approved by Hall, J.
APPEAL from the circuit court of Hinds County; H.B. Gillespie, J.
L. Arnold Pyle, for appellants.
Presently the cause came on for hearing on appellee's motion to dismiss for want of jurisdiction. At this hearing the following stipulation of facts was dictated into the record and agreed to by both counsel for appellants and counsel for appellee, to-wit: "Stipulation: For the purpose only of considering defendant's motion to dismiss for lack of jurisdiction, it is stipulated between the attorneys of record for plaintiff and defendant as follows, to-wit: 1. That on July 22, 1940, the defendant, Guy G. Snipes, was actually engaged in the business of termite eradication and control in the State of Mississippi under the firm name of Snipes Termite Control with an office and place of business in the city of Jackson, Hinds County, Mississippi; that the said Guy G. Snipes was at that time and for several years thereafter a resident citizen of Hinds County, Mississippi, and in charge of his place of business here.
2. That the said Guy G. Snipes is now and has since 1938 been licensed to do termite eradication and control work in the State of Mississippi under the provision of House Bill No. 112, and is now and has been since 1938 doing termite eradication and control work in the State of Mississippi under H.B. No. 112, Mississippi Legislature regular session of 1938 as amended, and has actually been engaged in the business of making contracts with people in Mississippi for termite eradication and control work to be performed in said state.
3. That E.W. Roan is a salaried employee of said Guy G. Snipes and is in charge of his Jackson, Mississippi, office and has authority to make contracts with Mississippi residents in the name of said Guy G. Snipes in connection with said termite eradication and control work and to perform and service the same.
4. E.W. Roan has never been appointed an agent for the service of process for Guy G. Snipes and has never been appointed trustee and attorney in fact for the said Guy G. Snipes.
5. Guy G. Snipes is now and was at the time of the filing of this suit a resident citizen of Shelby County, Tennessee."
The court, after considering the process, the stipulation of facts and argument of counsel for both appellants and appellee on the law applicable thereto, sustained appellee's motion and entered a judgment finally dismissing appellant's suit.
Service of process on appellee, a non-resident, under the provisions of Chapter 246, Laws of Mississippi, acts of 1940 (Sections 1437 and 1438, Code 1942) was sufficient to confer jurisdiction of the court in which the suit was brought over the person of appellee, was not in violation of any constitutional rights of appellee, and the court was in error in dismissing appellants' suit.
No question has been raised by the appellee as to the sufficiency of the compliance with the provisions of said Act in the serving of the process and the doing of the other things required by the Act to bring notice to appellee of the pending suit. The real question to be determined, then, is whether or not process served in accordance with the provisions of said Act is sufficient to give the court jurisdiction over the person of the appellee who is a nonresident of Mississippi, and in effect would the taking of jurisdiction by the court under such process violate any constitutional rights of the appellee.
The constitutionality of the provisions of this Act has not heretofore been passed upon by the Supreme Court of Mississippi, and, in so far as we can determine, has been passed upon but once by any appellate court, that being the United States Circuit Court of Appeals, Fifth Circuit, on May 9, 1944, in the case of Sugg v. Hendrix, 142 F.2d 740. In this case the identical questions were presented to the court that are here presented. The only difference at all between the cases is that the Sugg case arose out of tort while the case at bar arose out of contract. In the case of Sugg v. Hendrix, Sugg, a resident of Mississippi, sued Hendrix, a resident of Louisiana, in the District Court of the United States for the Northern District of Mississippi for damages as the result of personal injuries sustained while engaged in construction work for the defendant in the State of Mississippi. Process was had upon the non-resident defendant under said Chapter 246, Laws of Mississippi, Acts 1940 (Sections 1437 and 1438, Code 1942). The defendant's motion to quash said process on the ground that said Act was unconstitutional, was sustained. The Circuit Court of Appeals in reversing the judgment of the lower court said: "The statute in question takes due precaution to insure the defendant of the receipt of the notice and of a reasonable opportunity to appear and to defend the case. Since the Act does this, and since it makes the non-resident who does business in the state through managers, superintendents, and foremen, or in absentia, subject to process only in actions for damages arising out of such business in the same manner as a resident, we are of the view that it does not deny the defendant the equal protection of the law, due process of the law, nor deny to him any privileges and immunities that are afforded to a resident of the State. It does not burden interstate commerce because the defendant was not engaged in interstate commerce. The thought is not shocking that one who comes into a state for the purpose of conducting his business in that state should be made amenable to the courts and laws of the state and answerable to its citizens for damages sustained by them which were the result of the business transacted in the state.
The motion to quash the process should have been overruled, and for the failure of the court so to do its judgment is reversed."
Background and reasons why Chapter 246, Laws of Mississippi, Acts of 1940, (Sections 1437 and 1438, Code 1942) should be held to be constitutional, and the process had on appellee in this case sufficient to confer jurisdiction on the court in which this suit was brought: —
This Act is but one step further in the ever broadening scope of the term jurisdiction. (For a good discussion of the history of "jurisdiction" in the United States and in foreign countries, see Beale, The Jurisdiction of Courts Over Foreigners (1913) 26 Harv. L. Rev. 193, 283). Originally it was limited to persons who could be personally served with process within the state. That concept was extended to include foreign corporations which do business in the State.
Another established inroad upon the limited concept of jurisdiction has been made by the non-resident motorist statutes. (See 1 Beale, Conflict of Laws (1935) 359; Goodrich, Conflict of Laws (1927) 142-144; Stumberg, Conflict of Laws (1937) 92-96; Culp, Process in Actions Against Non-resident Motorists (1934) 32 Mich. L. Rev. 325; Scott, Jurisdiction Over Non-resident Motorists (1926) 39 Harv. L. Rev. 563).
One ground often given for exercising jurisdiction over non-resident individuals is the exercise of the state's police power. In the non-resident motorist cases, the police power of the state is exercised to protect the personal safety of the citizens. But the police power is not confined to regulations of health, morals, and safety. It affects economic as well as social conditions. "It embraces regulations designed to promote public convenience or the general prosperity or welfare, as well as those specifically intended to promote the public safety or the public health." (See Sugg v. Hendrix, supra; Sligh v. Kirkwood, 237 U.S. 52, 59, 35 Sup. Ct. 501, 59 L.ed. 835, 838 (1915). See also Eubank v. Richmond, 226 U.S. 137, 33 Sup. Ct. 76, 57 L.ed. 156 (1912); Noble State Bank v. Haskell, 219 U.S. 104, 31 Sup. Ct. 186, 55 L.ed. 112 (1911); Bacon v. Walker, 204 U.S. 311, 27 Sup. Ct. 289, 51 L.ed. 499 (1907); Chicago B. Q. Ry. v. Drainage Comm'rs, 200 U.S. 561, 26 Sup. Ct. 341, 50 L.ed. 596 (1906); Centr'l Loan Trust Co. v. Campbell, 173 U.S. 34, 19 Sup. Ct. 346, 43 L.ed. 623 (1899). The protections of citizens from the wrongful actions of non-residents within the state, the purpose of said Chapter 246, would seem to fall within the scope of the police power.
Whatever may be the basis, a broad statement of the requirements for jurisdiction of a state over non-resident individuals may be expressed as the existence of a relationship between the state of the forum and the defendant by which he placed himself under obligations to obey the judgment of the courts of the state.
Under this principle, the validity of Chapter 246 should definitely be upheld. The holding in H.L. Doherty Co. v. Goodman ( 294 U.S. 623, 55 Sup. Ct. 553, 79 L.ed. 1097 (1935) is not broad enough to cover this statute in all of its applications but specifically covers the case at bar. The statute involved there applies only to persons who maintain an office or agency in the state, while Chapter 246, Laws of Mississippi 1940, applies to any non-resident who does any business within the state. The Iowa statute contemplates the doing of a series of transactions, while under the Mississippi statute one business transaction is sufficient. This would not be a serious objection, however, since, for the purpose of jurisdiction, the only transaction with which the court is concerned is the one out of which the action arose. The Iowa statute provides that process may be served on the agent, while Chapter 246 allows service on the Secretary of State. Both are forms of substituted service, and both are reasonably certain to convey actual notice to the defendant.
The justice and sound reasons of policy behind such a holding are substantial. To hold otherwise would be to compel the resident to incur the financial hardship and inconvenience of seeking the defendant out in his own state and bringing suit there. The reasoning followed by the United States Supreme Court in allowing local suits against foreign corporations is equally applicable here; "In many instances the cost of the remedy would have largely exceeded the value of its fruits. In suits local in their character both at law and equity, there could be no relief. The result would be, to a large extent, immunity from legal responsibility." (Baltimore Ohio R.R. v. Harris, 12 Wall. 65, 84, 20 L.ed. 354, 359 (U.S. 1870).
If such service is permitted, on the other hand, the resident may bring his suit at the place where the transaction occurred. The defendant is not required to come into Mississippi to do business, and if he does go out of his way to do business here, then he may logically be required to return here to defend any suit which may arise out of that business. In all suits between citizens of different states, one of those persons must bear the expense of traveling outside his state to take part in the suit. In cases arising out of business done in a state, the person who goes out of his way to cause the damage should be the one who is required to go out of his way to defend a suit arising out of it, rather than the person who has stayed at home and merely traded with a non-resident.
A citizen who does business in the state is subject to suit within the state upon any business he carries on there. The non-resident who enters a state to do business receives the protection of that state's laws, and has access to all the facilities of that state's courts for the enforcement of his rights out of that business done within the state, and in that regard, is on an equal footing with the resident. To allow him to escape all practical responsibility for his actions would be to discriminate against domestic enterprise. But to uphold Chapter 246 would be to make the non-resident who does business in Mississippi similarly amenable to process in actions arising out of that local business, in return for the privilege of doing business in, and the protection of the laws of, this state. The ultimate effect would be to place non-residents on an equal footing with residents, with regard to responsibility for actions within the state, which is the true purpose of the Privileges and Immunities clause. (Paul v. Virginia, 8 Wall. 168, 19 L.Ed. 357 (U.S. 1868).
No unjust discrimination is involved if the difference in the means adopted to put all business enterprises operating in the state upon an equal footing bears a fair relation to the difference in the conditions attending each. Barbier v. Connolly, 113 U.S. 27, 5 Sup. Ct. 357, 28 L.ed. 923 (1885). The court there holds that if a difference in treatment of groups is based upon and bears a relation to a substantial difference in the conditions surrounding each, then it does not violate the Fourteenth Amendment.
The provisions of Chapter 246, Laws of Miss. 1940, certainly qualify under this rule. Apart from such a statute the non-resident enjoys a practical exemption from suit not enjoyed by the resident. While the difference in circumstances requires a difference in venue and the method of serving process, the statute gives the non-resident every reasonable consideration in both, and results in placing him on an equality with the resident as to actions growing out of his business within the state.
Butler Snow, for appellee.
Point I. Inasmuch as appellee was not a non-resident at the time of entering into the contract with plaintiffs, his acts did not constitute an appointment of the Secretary of State as agent for process in action arising out of such contract.
We respectfully direct the court's attention to the fact that on July 22, 1940, at which time the contract in suit was entered into, and for several years thereafter, the defendant, Snipes, was a resident of the State of Mississippi, and lived in Jackson, Mississippi.
It must be borne in mind that substituted service and service by publication was unknown to the common law and depends upon statutory authorization. And the principle of statutory construction that there must be strict compliance with enactments modifying the course of common law in regard to legal proceedings is particularly applicable in cases involving the construction and application of statutes authorizing substituted or constructive service of process. Such a statute must be strictly construed. 42 Am. Jur. Process, Section 66; 50 Am. Jur. Statutes, Section 402.
The pertinent portion of the statute provides "That any non-resident . . . who shall do any business or perform any character of work or service in this state, by the doing of such business or the performing of such work or services, be deemed to have appointed the secretary of state, . . . to be the true and lawful attorney . . . upon whom process may be served in any action, accrued or accruing from the doing of such business or the performing of such work or service."
Thus it is seen that the statute requires the following: 1. A non-resident. 2. Who shall do any business or perform any character of work or service. 3. An action accrued or accruing from the doing of such business or the performing of such work or service.
In the present case these essential elements do not exist. At the time of the execution of the contract between the appellee and the appellants, the appellee was a resident of this state and was not a non-resident. The statute only provides that non-residents who shall do business or perform work or services shall be deemed to have appointed the secretary of state as agent for process in actions arising out of such business. It is nowhere provided that a resident who shall do such business or perform such service shall be deemed to have appointed the secretary of state as agent for process in actions arising out of the doing of such business or performing of such service.
Now considering Chapter 246, Laws of 1940, who shall be deemed to have appointed an agent for procses? Clearly, only a non-resident who shall come into the state and do business is deemed to have appointed the secretary of state. The statute does not undertake in any way to provide that a resident under any circumstances, shall be deemed to have appointed the secretary of state as his agent for process.
Point II. If Chapter 246, Laws of 1940, be construed as authorizing the service of process on appellee, an individual non-resident of the state of Mississippi in this action, then such statute is unconstitutional and void; the court should give this statute a construction under which its validity can be upheld and should therefore hold that it does not apply to the present action.
It will be noted that Chapter 246, Laws of 1940, by its terms applies to non-resident individuals as well as to foreign corporations. It is a well established principle of constitutional law that a non-resident cannot be subjected to a judgment in personam by any form of service of process other than personal service within the state, unless he appears generally in the action or otherwise waives personal service. A personal judgment without such personal service upon a non-resident individual defendant who does not appear or otherwise waives such service is void as obtained without due process of law. 42 Am. Jur., Process, Section 50 and numerous authorities there cited; Annotation 126 A.L.R. 664.
The appellee is an individual and a citizen of another state of the United States. By Section 2, Article 4 of the Federal Constitution, it is provided that citizens of each state shall be entitled to all privileges and immunities of citizens in the several states. Under this provision, this appellee has the constitutional right to free ingress and egress into and from the State of Mississippi and to freely engage in lawful business within the state.
A state may not withhold from non-resident individuals the right of doing business therein without violating the Constitution of the United States. There are certain acts affecting the public safety which a state may make illegal unless the party doing such act first consents to submit to the jurisdiction of the courts of the state as to causes of action arising out of such acts. But we submit that no state has the authority to make illegal the entering into of a contract such as involved in the present case. And this being true, the State of Mississippi had no authority to and has not undertaken to prohibit the making of such a contract as is here involved in suit. Since the State of Mississippi could not forbid the making of this contract unless the appellee should consent to jurisdiction of the courts of Mississippi, it had no authority to provide that the mere making of the contract should constitute a submission to the jurisdiction of the courts of this state. American Law Institute, Restatement, Conflict of Laws, Section 85; 42 Am. Jur. Process, Section 78; Annotation, 91 A.L.R. 1327, et seq; Flexner v. Farson, 248 U.S. 289, 63 L.ed. 250; Hess v. Pawloski, 274 U.S. 352, 71 L.ed. 1091.
Before proceeding to a discussion of the development of this branch of constitutional law, we wish to refer to what we conceive to be the most accurate and concise statement of the present status of the law on this point. See American Law Institute, Restatement of Conflict of Law, Section 85.
A discussion of the history and development of the doctrine enunciated in the quotation from the Restatement above may well begin with a reference to the case of Pennoyer v. Neff, 95 U.S. 714, 24 L.ed. 565. The numerous other decisions announcing this same principle are collected in 126 A.L.R. 664, and 42 Am. Jur. Process, Section 50.
A leading case is Flexner v. Farson, 248 U.S. 289, 39 Sup. Ct. 97, 63 L.Ed. 250. The decision in Flexner v. Farson has not been departed from by the Supreme Court of the United States. There is no line of decisions upholding the constitutionality of acts providing for service of process on non-residents generally who do business within the state, without reference to the nature of the business conducted. It is true that the Supreme Court has upheld the validity of the so called non-resident motorists statutes which provide that non-residents who operate automobiles on the highways of the state shall be deemed to have appointed the secretary of state as agent to accept service of process. Hess v. Pawloski, 274 U.S. 352, 71 L.Ed. 1091; Wuchter v. Pizzutti, 276 U.S. 13, 72 L.Ed. 446; Young v. Masci, 289 U.S. 253, 77 L.Ed. 1158. But these decisions do not constitute any authority whatsoever to the effect that an act may provide for service of process upon non-residents generally without reference to the nature of the business conducted by such non-resident. These non-resident motorists decisions are clearly based on the ground that the driving of automobiles creates a constant danger to persons and property and that a state under its police power has the authority to regulate the use of its highways and protect the public safety.
In Hess v. Pawloski, supra, upholding such a statute, the Supreme Court was careful to reaffirm the constitutional limitations on the exercise of jurisdiction by the courts of the several states over non-residents.
The Iowa case of Davidson v. Doherty Co., 214 Iowa 739, 241 NW 700, 91 A.L.R. 1308, is frequently cited as upholding the validity of statutes providing for substituted service on non-resident individuals. The action was brought against Doherty, a non-resident dealer in securities. The plaintiff sought a personal judgment for damages growing out of a sale of certain shares of stock. The validity of the act as applied to a non-resident individual was upheld by a five to four decision of the Iowa Supreme Court.
This Iowa case of Davidson v. Doherty Co. is contrary to the weight of authority in this country. The case of Davidson v. Doherty Co. is annotated in 91 A.L.R. 1327 and it is there said at 1332: "It may thus be seen that the weight of authority, including that of the Supreme Court of the United States, is to the effect that a statute providing for service of process other than personal in an action against a non-resident doing business in the state, without a seizure of his property within the state, is unconstitutional and void. As said in 21 R.C.L. 1281: `The court may seize his property within the state by its process, and, on such reasonable constructive notice to him as the legislature may direct, apply the property to the payment of his debts; but the legislature cannot declare that to be personal service on a citizen of another state, not actually found within the state, which is not so in fact. Such nonresident person, unlike a corporation, carries on business in this state not by virtue of its consent, but by virtue of the Federal Constitution, which guarantees to the citizens of each state all privileges and immunities of citizens of each state all privileges and immunities of citizens of the several states; hence it cannot be implied from the fact that he does business within the state that he consents to submit himself to the jurisdiction of its courts in personal actions on service of process on his agent.'"
It is particularly significant to note that the Supreme Court of the United States has declined to go as far as the Iowa court in upholding this Iowa statute. The same Iowa statute which was involved in Davidson v. Doherty Co. came before the Supreme Court of the United States in Doherty Co. v. Goodman, 294 U.S. 623, 79 L.Ed. 1097, (1935). This case involved a controversy growing out of the sale of securities in the State of Iowa, and the same Iowa statute which was involved in the Davidson case. The Supreme Court of the United States upheld the statute as applied to a securities dealer having a local office in the state, said securities business being a business subjected in the state to special regulation. The court clearly intimated that under different circumstances, a different rule might obtain.
The appellants were plaintiffs in the court below and filed their declaration against the appellee, doing business under the name of Snipes Termite Control, wherein they alleged that on July 22, 1940, appellee was engaged in the business of termite control and entered into a written contract, exhibited with the declaration, whereby he agreed to eradicate termites and beetles in property of appellants for a period of five years for a cash consideration of $119.00, and, for said consideration, to inspect the property semi-annually during said five year period, and to repeat the treatment, if necessary, and also during said period to replace without additional cost all timbers that have been damaged to such an extent that replacement is necessary.
The declaration charged a breach of the contract while the same was still in force and effect as a consequence of which the appellants, in order to protect their property from further damage by termites, engaged the services of another termite control firm to treat and repair the building at a cost of $432.40, for which amount they demanded damages from appellee.
The declaration charged that the appellee is an adult nonresident of the State of Mississippi and gave his post office address, and charged that he is still engaged in business under the same name in the City of Jackson, Mississippi, maintaining an office and place of business in charge of an employee and agent.
Process for the defendant was issued and served in strict accordance with the provisions of Chapter 246, Laws of Mississippi of 1940, embodied in the 1942 Code as Sections 1437-1441, inclusive. The appellee does not question the fact that these statutes were fully complied with, but he appeared in due course and filed a motion to dismiss the suit for want of jurisdiction, charging therein that he is a nonresident individual and not amenable to the process of the courts of Mississippi, and that if said statutes be construed as authorizing valid service of process upon him, they are violative of Section 2 of Article IV and of Article XIV of the Constitution of the United States, and also of Section 14 of Article III of the Constitution of the State of Mississippi. The county court sustained the motion and, on appeal, the circuit court affirmed its judgment, from which action this appeal is prosecuted. Thus, the question of the constitutionality of said statutes is presented for decision.
It is shown by the record that at the time of the filing of this suit in the lower court, the appellee was a resident citizen of Shelby County, Tennessee; that on the date of said original contract, he was a resident citizen of Hinds County, Mississippi; that he subsequently removed himself to the State of Tennessee; that since the year 1938 he has been and still is engaged in the business of making contracts with people in Mississippi for termite eradication and control work to be performed in this state, duly licensed so to do under the provisions of House Bill No. 112, Chapter 171, Laws of Mississippi of 1938, Sections 5006-5011, inclusive, of the Mississippi Code of 1942, in pursuance of which business he has continuously maintained an office in Hinds County, Mississippi, in charge of a salaried employee who has authority to make contracts in appellee's name with Mississippi residents in connection with termite eradication and control work, and to perform and service the same.
Chapter 246, Laws of 1940, was enacted and approved by the Governor prior to the date of the contract in this case. It provides, in part: "Any non-resident, person, firm, partnership, general or limited, or any corporation not qualified under the constitution and laws of this state as to doing business herein, who shall do any business or perform any character of work or service in this state, shall, by the doing of such business or the performing of such work or services, be deemed to have appointed the secretary of state, or his successor, or successors in office, to be the true and lawful attorney or agent of such nonresident, upon whom process may be served in any action, accrued or accruing from the doing of such business or the performing of such work or service, or as an incident thereto by any such non-resident, or his, their or its agent, servant or employee. The doing of such business or the engaging in any such work or service in this state shall be deemed a signification of such non-resident's agreement, and equivalent to an appointment by, such non-resident of the secretary of state of the state of Mississippi, or his successor or successors in office, to be the true and lawful attorney or agent of such non-resident upon whom may be served all lawful process in any action or proceeding against any such non-resident for any cause of action which has accrued or may accrue in this state."
It further provides that two copies of any summons issued thereunder shall be served upon the Secretary of State by the sheriff of Hinds County; that such summons shall show the address of the defendant, and the Secretary of State shall preserve one copy as a record of his office and shall mail the other copy to the defendant. It further provides that the clerk who issues the summons shall immediately send by registered mail, postage prepaid, a true copy of the same to the nonresident defendant, and that an affidavit of such mailing, together with the registry receipt, shall be filed with the court as a record in the case. All these requirements were fully met in the case at bar. The statute further provides that the service of process, as above detailed, shall be of the same force and effect as if such nonresident had been personally served within the State of Mississippi. The statute further provides that the court in which the case is pending shall order such continuances as may be necessary to afford the nonresident reasonable opportunity to defend the action, and that no action shall be deemed triable until after thirty days from the date of service of process upon the Secretary of State.
The excellent briefs filed by both parties herein do not cite, nor do we find, any decision of this Court passing upon the constitutionality of the aforesaid statute for substituted service of process in Mississippi. However, there are numerous decisions from other jurisdictions upholding similar statutes.
In the early case of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, the Supreme Court of the United States held invalid a judgment from a state court based upon publication of process for a nonresident, but this decision was by that court specifically qualified to the extent of approving the type and scheme of substituted process upon nonresidents provided by the Mississippi statute, when it said: "Neither do we mean to assert that a State may not require a non-resident entering into a partnership or association within its limits, or making contracts enforceable there, to appoint an agent or representative in the State to receive service of process and notice in legal proceedings instituted with respect to such partnership, association, or contracts, or to designate a place where such service may be made and notice given, and provide, upon their failure, to make such appointment or to designate such place that service may be made upon a public officer designated for that purpose, or in some other prescribed way, and that judgments rendered upon such service may not be binding upon the non-residents both within and without the State. As was said by the Court of Exchequer in Valee v. Dumergue, 4 Exch. 290, `It is not contrary to natural justice that a man who has agreed to receive a particular mode of notification of legal proceedings should be bound by a judgment in which that particular mode of notification has been followed, even though he may not have actual notice of them.' See also The Lafayette Insurance Company v. French et al., 18 How. 404 [15 L.Ed. 451] and Gillespie v. Commercial Mutual Marine Insurance Company, 12 Gray, Mass., 201 [71 Am. Dec. 743]."
In the case of Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 633, 71 L.Ed. 1091, the Supreme Court of the United States upheld a Massachusetts statute dealing with service of process upon a nonresident motorist in actions arising out of the use of the highways of that state (similar to the Mississippi statute on the same subject, Section 9364 of the Mississippi Code of 1942) and, in so doing, the Court said: "Motor vehicles are dangerous machines, and, even when skillfully and carefully operated, their use is attended by serious dangers to persons and property. In the public interest the state may make and enforce regulations reasonably calculated to promote care on the part of all, residents and nonresidents alike, who use its highways. The measure in question operates to require a nonresident to answer for his conduct in the state where arise causes of action alleged against him, as well as to provide for a claimant a convenient method by which he may sue to enforce his rights. Under the statute the implied consent is limited to proceedings growing out of accidents or collisions on a highway in which the nonresident may be involved. It is required that he shall actually receive and receipt for notice of the service and a copy of the process. And it contemplates such continuances as may be found necessary to give reasonable time and opportunity for defense. It makes no hostile discrimination against non-residents, but tends to put them on the same footing as residents. Literal and precise equality in respect of this matter is not attainable; it is not required. Canadian Northern Ry. Co. v. Eggen, 252 U.S. 553, 561, 562, 40 S.Ct. 402, 64 L.Ed. 713. The state's power to regulate the use of its highways extends to their use by nonresidents as well as by residents. Hendrick v. Maryland, 235 U.S. 610, 622, 35 S.Ct. 140, 59 L.Ed. 385. And, in advance of the operation of a motor vehicle on its highway by a non-resident, the state may require him to appoint one of its officials as his agent on whom process may be served in proceedings growing out of such use. Kane v. New Jersey, 242 U.S. 160, 167, 37 S.Ct. 30, 61 L.Ed. 222. That case recognizes power of the state to exclude a nonresident until the formal appointment is made. And, having the power so to exclude, the state may declare that the use of the highway by the nonresident is the equivalent of the appointment of the registrar as agent on whom process may be served."
In the case of Henry L. Doherty Company v. Goodman, 294 U.S. 623, 55 S.Ct. 553, 554, 79 L.Ed. 1097, suit was brought in Iowa against Henry L. Doherty, a non-resident individual doing business under the name of Henry L. Doherty Company, and, in an action brought in connection with his business within that state as a dealer in corporate securities, process was served upon his agent in charge of his business in Iowa, pursuant to the provisions of the Iowa statute. That statute provides that when a nonresident defendant establishes an office or agency in Iowa for the transaction of business in that state, he thereby voluntarily appoints his agent in charge of such office or agency as one upon whom substituted service of process may be made in actions growing out of that office or agency. Doherty appeared specially and challenged the jurisdiction of the Iowa court to bring him in to defend a suit in that court by service upon his agent when he himself was a nonresident of the state and was not found within the state. The trial court held the service adequate, and the Supreme Court of Iowa affirmed this action. Upon appeal therefrom, the United States Supreme Court likewise affirmed the case and said:
"Iowa treats the business of dealing in corporate securities as exceptional, and subjects it to special regulation. Laws 1913, c. 137; Laws 1921, v. 189; Laws 1929, c. 10, approved Mar. 19, 1929. The last-cited act requires registration and written consent for service of process upon the secretary of state. See Merrick v. N.W. Halsey Co., 242 U.S. 568, 37 S.Ct. 227, 61 L.Ed. 498. Dohert voluntarily established an office in Iowa and there carried on this business. Considering this fact, and accepting the construction given to section 11079, we think to apply it as here proposed will not deprive him of any right guaranteed by the Federal Constitution.
"Flexner v. Farson, 248 U.S. 289, 39 S.Ct. 97, 63 L.Ed. 250, much relied upon, does not sustain appellant's position. There the service was made upon one not then agent for the defendants; here the situation is different. King was manager of the appellant's office when the sale contract was made; also when process was served upon him. Moreover, under the laws of Iowa, neither her citizens nor nonresidents could freely engage in the business of selling securities.
"The power of the states to impose terms upon non-residents, as to activities within their borders, recently has been much discussed. Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091; Wuchter v. Pizzutti, 276 U.S. 13, 48 S.Ct. 259, 260, 72 L.Ed. 446, 57 A.L.R. 1230; Young v. Masci, 289 U.S. 253, 53 S.Ct. 599, 77 L.Ed. 1158, 88 A.L.R. 170. Under these opinions it is established doctrine that a state may rightly direct that nonresidents who operate automobiles on her highways shall be deemed to have appointed the secretary of state as agent to accept service of process, provided there is some `provision making it reasonably probable that notice of the service on the secretary will be communicated to the nonresident defendant who is sued.'"
In the case of Sugg v. Hendrix, 142 F.2d 740, 743, the Circuit Court of Appeals for the Fifth Circuit upheld the validity of the said Chapter 246, Laws of Mississippi of 1940, in a suit against a nonresident of this state who was engaged in this state in the construction of levees and in the use on a large scale of a great deal of heavy machinery in the excavation, removing and handling of large quantities of dirt. That court reviewed the authorities hereinabove mentioned, as well as other decisions of the United States Supreme Court, and said: "We are not called on to determine the validity of the statute when applied to suits arising out of a business which the state had no occasion, nor power, to regulate, but it seems clear that the state had the power to enact the statute in question for the safety and protection of persons receiving injury in and about the work of employers-in-absentia, particularly when the nature of the work is fraught with danger to those required to be in and about it, as alleged in the present case. . . . The thought is not shocking that one who comes into a state for the purpose of conducting his business in that state should be made amenable to the courts and laws of the state and answerable to its citizens for damages sustained by them which were the result of the business transacted in the state."
(Hn 1) In the case at bar, the appellee, in the conduct of his business of termite eradication and control, was subject to Chapter 171, Laws of Mississippi of 1938 (Sections 5006-5011, Mississippi Code of 1942), which specifically provides that it is enacted to prevent fraudulent practices. This statute is clearly for the protection of citizens of this state, and prohibits the rendering of such services without first obtaining a license from the State Plant Board authorizing the applicant to engage in such business, after the applicant has furnished to said board evidence of his training and experience and has passed such tests and examinations as the board may prescribe.
(Hn 2) Since the appellee was engaged in a business which is subject to state control, and since the cause of action here sued upon accrued in this state out of the business of appellee transacted in this state, we unhesitatingly hold, in view of the foregoing authorities, that he was subject to suit here and was properly brought into court under said Chapter 246 of the Laws of Mississippi of 1940, and that, consequently, the lower court erred in sustaining appellee's motion to dismiss for want of jurisdiction.
We are not called upon to pass upon the validity of the last mentioned statute in cases where the defendant is not subject to state regulation. That question was pretermitted in both the Doherty and Sugg cases, supra, and is likewise pretermitted by us.
(Hn 3) It is argued by the appellee that since he was not a nonresident of this state at the time the original contract was made, but later removed himself to another state, and was a resident of another state when this suit was filed, he is not subject to our nonresident process statute, notwithstanding the fact that he is still engaged in the same business within this state. It would be farcical to hold that by changing his status from that of "resident" to "nonresident", the appellee can obtain an immunity from the process of the courts of this state with respect to business transacted herein, when such immunity is not available to those who have always been residents of this state nor to those who have always been nonresidents. Such a holding would be an unjust discrimination in favor of appellee. The decisions upon the due process clause of the Constitution invariably hold that residents and nonresidents should be placed as nearly as possible in the same status, and that it is only unlawful to discriminate against a nonresident. In this case there is no discrimination against the appellee. By being made to answer in the courts of this state for the consequence of his business conducted in this state pursuant to the laws and regulations pertaining to that business, he is placed in precisely the same category as residents of this state.
The judgment of the lower court is therefore reversed, and the cause remanded for a trial upon the merits.
Reversed and remanded.