Opinion
6 Div. 820.
November 8, 1923. Rehearing Denied November 29, 1923.
Appeal from Circuit Court, Jefferson County; Romaine Boyd, Judge.
Humphrey, Crawford Middleton, of Louisville, Ky., and Tillman, Bradley Baldwin, E. L. All, W. M. Rogers, and A. Key Foster, all of Birmingham, for appellant.
The courts of Alabama have jurisdiction of a cause of action upon a contract arising without the state, and it is immaterial that the plaintiff and defendant are foreign corporations, if the defendant can be found within the state for service of process. Acts Ala. S. S. 1907, p. 67; So. Ry. v. Jordan, 192 Ala. 528, 68 So. 418; note, 85 Am. St. Rep. 922; Barrow S. S. Co. v. Micheal Kane, 170 U.S. 100, 18 Sup. Ct. 526, 42 L.Ed. 964; Penn F. I. Co. v. Gold Issue M. M. Co., 245 U.S. 93, 37 Sup. Ct. 344, 61 L.Ed. 610; note, L.R.A. 1916F, 410; P. R. Co. v. Kever, 260 Fed. 534, 171 C.C.A. 318. The due process clause is not violated, where it appears the corporation was doing business in the state; and where it has designated a statutory agent and place of business, and engaged in business within the state, its status continues until it abandons business and withdraws. Int. Harvester Co. v. Ky., 234 U.S. 579, 34 Sup. Ct. 944, 58 L.Ed. 1479; St. L. S.W. v. Alexander, 227 U.S. 218, 33 Sup. Ct. 245, 57 L.Ed. 486, Ann. Cas. 1915B, 77; Knapp v. Bullock Tractor Co. (D.C.) 242 Fed. 543; Critchfield v. Armour, 228 Ill. App. 28; Groel v. United Elec. Co., 69 N.J. Eq. 397, 60 A. 822; Atkinson v. U.S. Operating Co., 129 Minn. 232, 152 N.W. 410, L.R.A. 1916E, 241; Armstrong v. N.Y. C., 129 Minn. 104, 151 N.W. 917, L.R.A. 1916E, 232, Ann. Cas. 1916E, 335; Hill v. Empire State Co. (C. C.) 156 Fed. 797.
Snyder, Gale Richards, of Minneapolis, Minn., and Percy, Benners Burr, of Birmingham, for appellee.
In order for courts in this state to have jurisdiction in a suit against a foreign corporation, it is necessary that the corporation should be doing business in the state at the time process is served. It is immaterial that it may have done business prior to, or that it may do business subsequent to, the suit. Sullivan v. Sullivan Timber Co., 103 Ala. 371, 15 So. 941, 25 L.R.A. 543; J. I. Case Co. v. McGuire, 201 Ala. 203, 77 So. 729; Chipman, Ltd., v. Jeffrey Co., 251 U.S. 373, 40 Sup. Ct. 172, 64 L.Ed. 314; Robert Mitchell Fur. Co. v. Selden Co., 257 U.S. 213, 42 Sup. Ct. 84, 66 L.Ed. 201. By designation of a statutory agent a foreign corporation becomes subject to suit as a result of service on such agent only on causes of action arising within the state. Old Wayne Ass'n v. McDonough, 204 U.S. 8, 27 Sup. Ct. 236, 51 L.Ed. 345; Simons v. So. Ry., 236 U.S. 115, 35 Sup. Ct. 255, 59 L.Ed. 492; Mo. Pac. v. Clarenden Co., 257 U.S. 533, 42 Sup. Ct. 210, 66 L.Ed. 354.
This cause was submitted under rule 46, and the opinion of the court was delivered by Mr. Chief Justice ANDERSON.
Considerable confusion arose as to when and where foreign corporations could be sued and as to when they did or did not bring themselves within the requirement of section 232 of the Constitution as a condition precedent to doing business in this state. Consequently the Legislature enacted what is now section 3642 of the Code of 1907, first appearing as section 1316 in the Code of 1896, the same being the codification of an act of 1887, and which is as follows:
"Every corporation not organized under the laws of this state shall, before engaging in or transacting any business in this state, file an instrument of writing, under the seal of the corporation and signed officially by the president and secretary thereof, designating at least one known place of business in this state and an authorized agent or agents residing thereat; and when any such corporation shall abandon or change its place of business as designated in such instrument, or shall substitute another agent or agents for the agent or agents designated in such instrument of writing, such corporation shall file a new instrument of writing as herein provided, before transacting any further business in this state."
This statutory provision was intended to protect the citizens of the state as to causes of action arising within the state and to compel foreign corporations to submit themselves to its jurisdiction as a condition precedent to doing business and to use our courts for the enforcement of its rights and to, in effect, designate the county in which it would be suable and the agent upon whom process could be served. Alabama Western R. R. v. Tally-Bates Co., 162 Ala. 402, 50 So. 341.
When this appellee corporation complied with the foregoing statute, it impliedly submitted itself to the jurisdiction of the courts of this state upon the service of process upon its designated agent and, in effect, admitted doing business in the place designated as essential to the venue of an action against it, and it was therefore suable and subject to the service of process at the place and upon the agent so named upon all causes of action arising in this state until it filed a new declaration of abandonment or change as required by said above-quoted provision. This implied assent, however, is confined to transactions or causes of action arising in this state and not those arising in other states. Simon v. Sou. R. R., 236 U.S. 115, 35 Sup. Ct. 255, 59 L.Ed. 492; Old Wayne Association v. McDonough, 204 U.S. 8, 27 Sup. Ct. 236, 51 L.Ed. 345; New York R. R. v. Estill, 147 U.S. 591, 13 Sup. Ct. 444, 37 L.Ed. 292.
Prior to the act of 1907, the courts of this state had no jurisdiction to try causes between foreign corporations where the cause of action arose outside of the state. Dozier v. Smith Co., 145 Ala. 317, 39 So. 714, and cases there cited. Hence the Legislature, Special Session 1907, page 67, enacted the following:
"Section 1. Be it enacted by the Legislature of Alabama, that whenever, either by common law or the statutes of another state, a cause of action, either upon contract, or in tort, has arisen in such other state against any person or corporation, such cause of action shall be enforceable in the courts of this state, in any county in which jurisdiction of the defendant can legally be obtained in the same manner in which jurisdiction could have been obtained if the cause of action had arisen in this state."
Why the Legislature desired to burden the courts of this state with settling controversies between outsiders and which arose in other states is difficult to appreciate, but is, of course, a question of legislative policy with which the courts must not be concerned. Said act, however, must be so construed as to make it harmonize with the "due process" clause of the federal Constitution when such can be done without doing violence to the legislative intent, and must therefore be held to mean that suits can be maintained in the courts of this state by nonresidents against nonresidents and personal judgments obtained upon causes of action arising out of this state, if legal service can be had on the defendant. As above stated, the statutory designation by this defendant of its agent and upon whom process could be served applies to causes of action arising in Alabama and not elsewhere and could not apply to the case in hand. Simon v. Sou. R. R., 236 U.S. 115, 35 Sup. Ct. 255, 59 L.Ed. 492. So, the question arises: Was this defendant, at the time the suit was brought, doing business in Jefferson county so as to subject it to personal service under the "due process" clause of the federal Constitution? The agreed facts show that this defendant's agent at the time of service was merely soliciting business, and this alone did not amount to "doing business" as essential to service of process in this case. Green v. C., B. O. R. R., 205 U.S. 530, 27 Sup. Ct. 595, 51 L.Ed. 916; Abraham v. Sou. R. R., 149 Ala. 547, 42 So. 837. While the agreed facts show that this defendant had done business in Jefferson county, its operations ceased in June previous to the service of process upon the statutory agent in November as it had moved from the state all of its force and machinery. It also appears that subsequent to the service it secured another contract, but the validity of the service must rest upon the status at the time the suit was brought, and not upon conditions existing when the cause of action arose. As said by Brickell, C. J., speaking for the court, in the case of Sullivan v. Sullivan Timber Co., 103 Ala. 371, 15 So. 941, 25 L.R.A. 543:
"The material changes, which the Constitution works, are, that the corporation becomes liable to suit in any county in which it does business, and the process may be served, compelling it to appear, upon an agent anywhere in the state. The words of the statute are plain and unambiguous. There is no room for construction or interpretation, or for an inquiry into the policy of the provision, or the motives which it may be supposed induced its adoption. It speaks of the present, not of the past, or of the future. The words 'does business' are equivalent in meaning, and expressive of the same thought, as the words 'doing business.' Unless we deflect these words from their plain and usual signification, or import into the Constitution words not found there, we are constrained to the conclusion that a foreign corporation having a known place of business in the state, is not subject to a personal action, in a county beyond such place of business, unless, at the time of the commencement of suit, it was doing business in such county, and that it is immaterial that the contract was made, or the cause of action arose, on which the suit is founded, at some past time when the corporation was doing business in such county. * * *
"When the suit was commenced, the company had an agent or employee in the possession and care of the line of railroad it had constructed in the county of Conecuh, and of the machine it had used in the loading of cars with timber. The railroad and the machine were mere adjuncts or appurtenances to the sawmill it had operated in the county of Escambia. The operation of the mill had been suspended, and the railroad and machine were unemployed. The care and protection of unused property, or the payment of taxes which are a charge upon the property, and the payment of which is essential to the preservation of the title to the owner, cannot be deemed the exercise of corporate powers or franchises, nor the transaction of the business, or any part thereof, for which the company was created and organized."
We hold that this defendant was not, at the time the suit was brought, transacting or doing business in Jefferson county so as to render it suable as for a personal judgment upon a foreign cause of action, and the trial court did not err in giving the general charge at its request.
While we quote approvingly from the opinion in the Sullivan Case, supra, it must be borne in mind that said case was not dealing with service on a statutory agent under section 3642 of the Code of 1907, upon a cause of action which arose in this state. The date of the cause of action does not appear, and if it arose subsequent to the act of 1887, now section 3642 of the Code of 1907, no reference is made to the same in the opinion, and said opinion can in no wise conflict with what we now say as to the service of process upon a statutory agent in causes of action arising in this state.
In the case of Sou. R. R. v. Jordan, 192 Ala. 528, 68 So. 418, the act of 1907 was applied and enforced, but no point was made as to the validity of the service, and from aught appearing, the defendant did business in Cherokee county and the service was regular; hence there is no conflict between said case and the present holding.
We have considered very carefully the able brief of counsel for the appellant and concede that there are cases persuasive to a holding that a status once established is presumed to continue until the contrary is shown; but we think that the proof shows that this defendant was not doing business in Jefferson county when this suit was brought, within the rule laid down in the Sullivan Case, supra, as an essential to valid service upon a foreign cause of action. As to causes of action arising in this state we agree that the status fixed by a compliance with section 3642 of the Code continues to exist until there is a change or abandonment as there required.
The judgment of the circuit court is affirmed.
Affirmed.
SOMERVILLE, THOMAS, and BOULDIN, JJ., concur.