Braniff v. Coffield

1947 OK 369, 190 P.2d 815, 199 Okla. 604, 1947 Okla. LEXIS 663
CourtSupreme Court of Oklahoma
DecidedDecember 9, 1947
DocketNo. 31506
StatusPublished
Cited by10 cases

This text of 1947 OK 369 (Braniff v. Coffield) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Braniff v. Coffield, 1947 OK 369, 190 P.2d 815, 199 Okla. 604, 1947 Okla. LEXIS 663 (Okla. 1947).

Opinion

ARNOLD, J.

This action was instituted' in the district court of Creek county by A. W. Coffield, Eunice Coffield, and Floyd D. Coffield, hereinafter referred to as plaintiffs, against Earl Ernsberger, various individuals who are sued as officers and directors of the Western Service Corporation, Earl A. Ernsberger & Company, Inc., the Marine Midland Trust Company and the Chemical Bank & Trust Company. The plaintiffs claim damages arising from the sale to them of certain stock of the Western Service Corporation. They allege that said stock is worthless and that the sale was made in violation of the Blue Sky Law of Oklahoma (Ch. 24, art. 23, O. S. 1931, 71 O. S. 1941 §52).

For the purposes of venue and jurisdiction of the person, the Chemical Bank & Trust Company, a foreign corporation, is the resident defendant (State ex rel. v. Mortgage Security Corporation, 175 Okla. 503, 53 P. 2d 560). All the other defendants are individuals and nonresidents of Creek [605]*605County and were served with process outside of said county. Unless the district court of Creek county acquired jurisdiction of the person of this principal defendant then its process served outside of that county was ineffective to bring in the other defendants and to confer jurisdiction of their persons in the absence of a general appearance. If jurisdiction of the person of this principal defendant was lawfully acquired by service of summons on its service agent in Oklahoma county, then venue of the action as to the other defendants was lawfully lodged in Creek county and the court there acquired jurisdiction of their persons by the service of the process on them outside of that county, since the action was alleged to be joint and several, and since Creek county was the residence of plaintiffs (Sec. 43, art. 9, Okla. Const.; 18 O. S. 1941 §471; 12 O.S. 1941 §154).

Chemical Bank & Trust Company appeared specially by motion challenging the jurisdiction of the court over its person. In this motion it was alleged in substance that the bank was a corporation organized and existing under the laws of the State of New York and having its office and place of business in the city of New York; that it was not “doing business” in Oklahoma at the time the suit was filed nor had it transacted business in the state at any time since; that plaintiffs’ cause of action did not arise out of any business transacted by it in Oklahoma; that it did not own any property in Creek county, and had no capital invested in property there; that it had no debts owing to it there and had no officer, agent or employee residing in that county or in the state except I. R. McQueen, its statutory service agent in Oklahoma county.

By an order sustaining a motion of plaintiffs to strike, the trial court eliminated from defendant’s motion all allegations of fact negativing the requisite jurisdiction of the person of foreign corporations which is mentioned in section 43, art. 9, Const., and 18 O. S. 1941 §471, and refused to hear proof in support of those negative allegations. The trial court then overruled the special appearance and objections to jurisdiction, gave defendant an exception, and granted an extension of 20 days to answer and provided in its order that said defendant “shall not thereby waive its objections to the jurisdiction of its person”. Both the attorneys for plaintiffs in their motion to strike and the trial court in its order sustaining that motion recognized the bank’s notice as going only to the question of jurisdiction of its person.

Did the district court of Creek county acquire jurisdiction over the Chemical Bank & Trust Company through service of summons on its service agent in Oklahoma county, or did it acquire jurisdiction thereafter over the other defendants through their alleged general appearance in the action?

The vesting of jurisdiction over the person of a foreign corporation by service of process on its service agent depends on whether such corporation is “doing business” within the state, or whether the cause of action arose from business previously transacted within the state within the period of limitation. The mere appointment of a service agent in and of itself is insufficient unless the corporation has availed itself of the privilege which its compliance with the law entitles it to exercise.

By the provisions of section 43, art. 9, Const., and 18 O. S. 1941 §471, the state has imposed certain conditions on foreign corporations for the privilege of “doing business” in the state, one of which is its submission to the jurisdiction of her courts by the appointment of an agent on whom process may be served in any action growing out of its business tranacted within the state. By the provisions of 18 O. S. 1941 §472, the state has imposed a similar condition on foreign corporations “doing business” in the state without compliance with its law by making them subject to the jurisdiction of her courts on [606]*606proper service of procses through the Secretary of State. It is fundamental that acquired jurisdiction of the person by either method is based on business transactions within the state.

Dunham v. Marine Midland Trust Co. of New York, 175 Okla. 461, 53 P. 2d 254, is a companion case to this one, growing out of the same series of transactions, but arising under the Blue Sky Law prior to the 1931 amendment, in which service was obtained through the Secretary of State under the provisions of section 472, Id. In affirming the order of the trial court sustaining objection to jurisdiction this court in the syllabus said:

“Where corporate securities of a Delaware corporation are sold by the officers and agents of such corporation in Oklahoma in violation of the state’s so-called Blue Sky Laws, a foreign corporation engaged in New York as transfer agent of such Delaware corporation is not present and ‘doing business’ in this state as a party to such sale where it was not a member of a combination or a party to a concerted action to accomplish the common design of violating the laws of this state; and courts of this state cannot acquire jurisdiction of such foreign corporation in a personal action growing out of the sale of such stock by service of summons upon the Secretary of State, as provided by section 126, O. S. 1931.”

Marine Midland Trust Company was a codefendant of Chemical Bank & Trust Company in the instant case, but its objection to the jurisdiction, on practically identical allegations as to its not “doing business” in Oklahoma as those contained in the Chemical Bank’s motion, was sustained and the case dismissed as to it. This ruling was doubtless based on the holding of this court above quoted in the Dunham Case, which decision had become final prior to the hearing on the motion. Evidently the trial court considered that the appointment of a service agent by the latter was conclusive that it was “doing business” in the state, because it was not permitted to offer its proof on this issue of fact. This is considered to be an erroneous view of the law.

In the case of Verdigris River Land Co. v. Stanfield, 25 Okla. 265, 105 P. 337, this court held that “the appointment of an agent to transact the company’s business is not ‘doing business’ within the meaning of the statute”. With equal logic and legal correctness may it be said that the appointment of an agent to receive service of process does not constitute “doing business” or “transacting business” in the state within the meaning of the law. (23 Am. Juris, p. 346, §365.)

In the case of Dunham v. Chemical Bank & Trust Co. et al., 180 Okla. 537, 71 P.

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Cite This Page — Counsel Stack

Bluebook (online)
1947 OK 369, 190 P.2d 815, 199 Okla. 604, 1947 Okla. LEXIS 663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/braniff-v-coffield-okla-1947.