Atlantic Coast Line Railroad Co. v. Richardson

121 Tenn. 448

• Court: Tennessee Supreme Court
• Decided: December 15, 1908
• Status: Published

Opinions

Mr. Chief Justice Beard

delivered the opinion of the Court.

The defendant in error, at Wyoming, in the State of New York, delivered to the Buffalo, Rochester & Pitts-burg Railway a car loaded with pears, and received a few days thereafter a bill of lading, in which it undertook to convey the same, over its own line and connecting lines of the Atlantic Coast Dispatch Company, to Nashville, in this State.

This company, as the record indicates, was a voluntary association of certain railroads for the more expeditious handling and transport of freight passing over their several lines to points beyond. The plaintiffs in error, the Atlantic Coast Line Railroad Company •and the Georgia Railroad & Banking Company, were, as we infer, two of the constituent members of this association.

The car in question passed over the lines of several railroads, including those of the plaintiffs in error. On reaching Nashville, the pears were found to be in a decayed and worthless condition, whereupon the present suit was instituted to recover the value of the shipment. As a ground for recovery it was alleged that the defendant carriers were guilty of negligence in failing properly to ice the car containing the pears, and also of unreasonable delay in transportation, resulting in the decay and loss of the fruit. The action was begun by the issuance of an ordinary summons, upon which a return by the officer making this service was indorsed as follows: “Came to hand and executed by reading the process to S. M. Wene, agent of the Atlantic Coast Line Company, and to M. H. Lillard, agent of the Georgia Railroad & Banking Company. . . Upon the coming in of the declaration the plaintiffs in error filed pleas to the jurisdiction of the court. In its plea the Atlantic Coast Line Railroad Company averred that it was a foreign corporation, “created under the laws of the State of Virginia, operating its lines of railroad in the States of Virginia, North Carolina, etc., and wholly outside of Tennessee; that its principal offices were located outside of this State; that S. M'. Wene, upon whom service of the summons was made, was its traveling soliciting agent, and was never appointed agent for the company in Davidson county, in this State; that the company had no office or agency in Davidson county, at the time of the transaction out of which the plaintiff’s cause of action arose or since; and that this cause of action did not arise within the State of Tennessee, nor out of any transaction had, in whole or in part, within the State of Tennessee.” .

The plea of the Georgia Railroad & Banking Company was in like form and substance, save that it averred that it was a corporation created and existing under and by virtue of the laws of Georgia; that its lines of railway were altogether outside of Tennessee; that its principal offices were located in Augusta, Ga., and that M’. H. Lillard, upon whom service was made, was a traveling soliciting agent of the company, and was never appointed the agent for the company in Davidson county. In all other essential respects the plea of this latter company was similar to the one set out above.

Instead of demurring to these pleas, if bad in law, the plaintiffs joined issue, and the case was heard on evidence pertinent thereto, resulting in a judgment overruling them and putting plaintiffs in error to trial on defenses involving the merits of the case, which resulted in a verdict and judgment adverse to them.

If the trial judge was in error in his ruling on these pleas on abatement, this is determinative of the case, and there will be no necessity of considering the numerous other errors assigned upon his action in the conduct of the cause.

Before coming to the question of law raised by these pleas, it is proper to say that the averments of fact contained in them aré, without any contradiction, supported by the evidence in the case. It is only necessary to add that the car containing the pears in question was received from a connecting carrier by the Atlantic Coast Line Railroad Company, at Richmond, Ya., and by thgt company was taken over its own lines to Augusta, Ga., where it was delivered into the possession of the Georgia Railroad & Banking Company, and by it was transported over its lines to Atlanta, Ga., where it was turned over to the custody of the Southern Railway Company, and by it was carried over its several lines to Nashville, the point of destination. Upon these facts the question is: Did the service of process upon these traveling agents bring the plaintiffs in error within the jurisdiction of the circuit court of Davidson county, and authorize a judgment in personam,?

The answer to this question depends alone upon the proper construction of sections 1, 2, c. 226, p. 386, of the Session Acts of 1887 (sections 4548, 4544, of Shannon’s Code). Section 1 of this act provides that any foreign corporation “found doing business in this State shall be subject to suit here to the same extent that corporations of this State are by the laws thereof liable to be sued, so far as it relates to any transaction had in whole or in part within this State, or any cause of action arising here, but not otherwise.” The second section defines ■ what is meant by being “found doing business in this State” in these terms, to wit: “Any corporation having any transaction with persons, or having any transaction concerning any property, situated in this State, through any agency whatever, acting for it within the State, shall be held to be doing business here, within the meaning of section 1.”

We are at a loss to see how, by the most liberal interpretation, this controversy can be brought within the jurisdictional limits of this statute. These two foreign corporations had no transaction with any person or concerning any property situated in this State, through any agency acting for them, or either of them, within the State. Their transactions were with persons, or corporations, outside the State, and with regard to property, at the time of these transactions, far beyond the borders of the State. The Atlantic Coast Line Eailroad Company had its transaction with reference to this property with the common carriers, from whom it received and to whom it delivered this car load of freight. This was equally true with the Georgia Railroad & Banking Company.

This act of 1887 was passed for the purpose (Telephone Company v. Turner, 88 Tenn., 265, 12 S. W., 544) of remedying a defect in our corporation acts, pointed out in Chicago & Alton Railroad v. Walker, 9 Lea, 475. In that case it was held that the Code provisions, which regulate the mode in which corporations may he sued, did not apply to the case of a foreign corporation having no resident agent, or local office, hut which was alone represented by a traveling agent, not localized in this State. To meet this apparent hardship, hy section 3 of that act it is provided that “pro-, cess may he served upon any agent” of a corporation found within the county where the suit is brought, “no matter what character of agent such person may he”; hut the effect of this section is necessarily limited to suits against foreign corporations falling within the letter and spirit of sections 1 and 2 of the act. So it is, while authorizing process to he served on an agent, whatever his character may he, yet the right of bringing foreign corporations into the courts of this State is circumscribed hy the terms of sections 1 and 2 of the act.

It is true that it was held in State v. Insurance Company, 106 Tenn., 294, 61 S. W., 75, that “the term, or phrase, ‘doing business’ does not and cannot have a uniform and unvarying meaning, hut is governed largely by the connection and in view of tbe object of tbe statute.” And so it was ruled that tbe Connecticut Mutual Insurance Company, which in the year 1894 recalled its agents and agencies from tbe State, and from that time ceased to solicit and write new policies, was not doing business in Tennessee, so as to be subject to a privilege tax on its premium receipts from policies theretofore issued, which were sent by mail, or otherwise, to the agents of the company outside the State.

But we see no room for speculation as to the sense in which the terms “doing business in this- State” are used in the act of 1887, as the second section, as has already been said, defines those terms, and thus places them beyond the realm of debate.

That this was understood by the court in its disposition of that case is apparent, from the clear line of distinction which the opinion points out between it and that of Insurance Compay v. Spratley, 99 Tenn., 322, 42 S. W., 145, 44 L. R. A., 442. In this latter case it appeared that the insurance company had issued its policies on the life of Spratley before its withdrawal from the State, had received premiums on these policies to the date of his death, and thereafter sent a special agent into the State to examine into the conditions under which the policies were issued, and, upon such examination having been made and reported, gave authority to this agent to propose a compromise to the beneficiary. Upon these facts it was held that, clearly within the act of 1887, the insurance company was “doing business in this State,” and that service of process on this special agent gave our courts jurisdiction over the controversy betAveen it and the beneficiary as to its liability on the policies. This case was subsequently taken by Avrit of error to the supreme court of the United States, and was there affirmed by an opinion reported in 172 U. S., 602, 19 Sup. Ct., 308, 43 L. Ed., 569.

The contention of counsel of defendant in error that this suit was maintainable seems to be based on two propositions: First, that the plaintiffs in error were associated with other railroads, including the Southern Railway Company, in something like a partnership agreement, under the name and style of the “Atlantic Coast Line Dispatch,” so that, as the latter, the delivering carrier, had lines Avithin this State, the case fell within the act of 1887; and, second, that plaintiffs in error, having agents in Tennessee, with offices at Nashville, soliciting freight for their several lines, Avere doing business in this State within the meaning of that act, so as to make them amenable to our courts by the service of process on these agents.

As to the first proposition, it need only be said that there is nothing in the record to show that there Avere any' of the features of a partnership in this association, or anything upon which the doctrine of representation, or of principal and agent, as between these railroads, can be invoked. Post v. Railroad, 103 Tenn., 184, 52 , 55 L. R. A., 481; United States v. American Bell Telephone Co. (C. C.), 29 Fed., 17.

Nor do we think the second. proposition, when applied to the facts of the case, sound. That these foreign corporations were, in a sense, “doing business” in this State through their traveling soliciting agents, is true; and service upon the latter in all cases falling within sections 1 and 2 of the act of 1887, which we are considering, would probably bring them into our courts. But the vice in the proposition is found in that the facts alleged in the pleas, and shoAvn in the evidence, put the case outside the provisions of the statute, as we have already undertaken to establish. Hence, it is that, as “the cause of action” did not arise from “any transaction with persons” or “concerning any property situated in this State through any agency whatever acting” for this corporation “within the State,” service on these agents did not give the circuit court jurisdiction of the cause.

It would have been otherwise if, as in the case of St. Louis, Iron Mountain, etc., Railway Company v. Bean (September term, 1908), these agents had been connected in Davidson county with the transaction out of which the cause of action grew.

It results that the petition for certiorari must be granted, the judgments of the court of civil appeals and of the circuit court be reversed, and the case dismissed.