Lee v. Memphis Pub. Co.

14 So. 2d 351, 195 Miss. 264, 152 A.L.R. 1428, 1943 Miss. LEXIS 133

• Court: Mississippi Supreme Court
• Decided: June 14, 1943
• Docket: No. 35376.
• Status: Published

Opinions

McGehee, J.,

delivered the opinion of the court.

This suit is brought by the appellant, Ned Lee, a resident citizen of Webster County, Mississippi, against the appellee, Memphis Publishing’ Company, a Delaware corporation, publisher of the Commercial Appeal, a daily newspaper, printed and published at Memphis, Tennessee, in an action for damages growing out of the publication and circulation of an alleged defamatory and libelous article sent to it for publication of and concerning him. The suit was instituted in the circuit court of Webster County and process was attempted to be had upon the said foreign corporation by serving the same upon two local citizens, Bays Land and William Dunlap, and also upon Walker Wood, Secretary of State at Jackson, Mississippi, pursuant to Chapter 246, Laws of Mississippi of 1940, which provides, among other things, that all civil actions for recovery of damages brought against a nonresident of the State of Mississippi may be commenced in any county in which the action accrued, and that service of process may be had in any county of the State where the defendant, or any of them, may be found. Neither of the two local residents in Webster County were charged with wrong doing, nor made defendant, and it appears from the proof introduced under a plea to the jurisdiction of the court that the said Bays Land was an independent contractor who operated a truck or trucks in bringing' the newspapers from Memphis into Mississippi for delivery to one J. F. Wofford, a local distributor, who purchased at the wholesale price such a number of the copies of the Commercial Appeal as he deemed necessary to meet his requirements as such distributor, and who was obligated to pay such wholesale price therefor and to resell them on his own account to news boys, news stands and individual purchasers in the Town of Eupora in that county, using every reasonable effort to increase the number of retail purchasers of the paper in said town; that the said William Dunlap was employed by the defendant at a salary of $35 per week as a contact man to ascertain and recommend suitable persons to become local distributors of the paper, subject to the approval of the Memphis Office in Tennessee, accept applications in that behalf and performance bonds from such persons for approval at the office aforesaid, in the territory east of the I. C. R. R. Company and comprising more than one-half of the State of Mississippi, and he testified that as such employee he was the supervisor of such local distributors, but without authority or discretion to make any contract or to otherwise obligate his said employer in the premises; and it was also shown that the defendant maintains a news office at the Edwards Hotel at Jackson, Mississippi, on the door of which a sign is printed, reading: “The Commercial Appeal — 'Mississippi Office— News — 'Circulation—Advertising,” where Kenneth Toler is in charge as a reporter for the Commercial Appeal, who prepares and sends to the Memphis Office news articles for acceptance or rejection there, and whose office rent and salary are paid by the defendant, but who was shown not to be engaged in selling newspapers, soliciting advertisements therefor or vested with any authority to act for the defendant in the negotiation of any contract or other business transaction. That such advertising carried by the defendant in its newspaper from Mississippi was wholly unsolicited items sent in by individuals who desired such service.

The said Chapter 246, Laws of 1940, supra, provides that: “Any non-resident, ... 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." Section 1.

The defendant entered its appearance especially for the purpose of moving to dismiss the suit for want of jurisdiction, which action on its part did not operate as a personal appearance so as to subject it to the territorial jurisdiction of the court, as was held in the case of First National Bank of St. Louis v. Mississippi Cottonseed Products Company, 171 Miss. 282, 157 So. 349. By its plea, the defendant raised (1) the question of want of territorial jurisdiction of the courts of Mississippi on the ground that it was not doing business in the state, and (2) the want of venue of the suit in Webster County, in the event that it should be held that service of process upon the Secretary of State under the foregoing statute could render it subject to suit in this State. The trial court was of the opinion that the defendant was doing business in Mississippi but that the venue of the suit is in Hinds County where the Secretary of State resides, and in the absence of a motion by the plaintiff to transfer the suit the same was dismissed, and the plaintiff appeals.

It is urged by the appellant that the only question to be considered by this court is that of venue. That the defendant has not filed a cross-appeal from the decision of the trial court in holding that the said Memphis Publishing Company was doing’ business in this state, and that said defendant is therefore bound by the judgment of the trial court on that issue. We are unable to agree with this contention for the reason that if the judgment of dismissal was correct on any ground raised by the plea, the same will be affirmed; Yazoo & M. V. R. Company v. Adams, 81 Miss. 90, 32 So. 937; Carr et al. v. Miller, 162 Miss. 760, 139 So. 851; 4 C. J. 662; 5 C. J. S., Appeal and Error, sec. 1464, holding that the appellate court may base its affirmance or reversal on a different legal theory or on different grounds than that upon which it was decided by the trial court, provided the question was before such court under the pleadings when its judgment was rendered.

We therefore proceed to a decision of the question of whether or not the defendant is doing business in this state so as to be amenable to the process of its courts, since an adjudication of that issue in the negative will render unnecessary a consideration of any other question involved.

The general rule deducible from the decisions of the Supreme Court of the United States on this question is that to constitute a foreign corporation doing business in a particular jurisdiction, the business must be of such nature and character as to warrant the inference that the corporation has subjected itself to the local jurisdiction, and is by its duly authorized officers or agents present within the state where the service of process is attempted. Philadelphia, etc., R. Company v. McKiddin, 243 U. S. 264, 37 S. Ct. 280, 61 L. Ed. 710; St. Louis S. W. R. Company v. Alexander, 227 U. S. 218, 33 S. Ct. 245, 57 L. Ed. 486, Ann. Cas. 1915B, 77; People’s Tobacco Company v. American Tobacco Company, 246 U. S. 79, 38 S. Ct. 233, 62 L. Ed. 587, Ann. Cas. 1918C, 537; and Green v. Chicago, etc., R. Company, 205 U. S. 530, 27 S. Ct. 595, 596, 51 L Ed. 916. In the case of Green v. Chicago, etc., R. Company, supra, where the railroad company’s line extended from Chicago westward and where it maintained an office in Pennsylvania where a district freight and passenger agent and several other employees who solicited passenger and freight business were employed, it was held that while it was ‘ ‘ obvious that the defendant was doing [in Pennsylvania] a considerable business of a certain kind” it was nothing more than that of solicitation and that the railroad company was not doing business in Pennsylvania in such 'sense as to render it amenable to the process of the courts in that state.

Our own court held in the case of Item Company, Ltd., v. Shipp et al., 140 Miss. 699, 106 So. 437, that the Item Company, Ltd., a publisher of a New Orleans newspaper, was not doing business in this state, so as to require the filing of a copy of its charter under Chapter 92, Laws of 1916, and wherein it was shown that the defendant Shipp, a local distributor of the newspaper at Hattiesburg, Mississippi, purchased from the Item Company, Ltd., such number of copies of the paper as he deemed necessary for his requirements as such local distributor and was obligated to pay for the papers whether he sold them or not, and when he sold them, whether he collected for them or not, and in which case the publishing company also had a traveling representative who visited the various towns in this state and solicited additional subscribers for the paper, turning the list over to the local distributors in each case, and occasionally made sales of such newspaper. The local distributor Shipp and the sureties on his performance bond were sued for a balance alleged to be due on his account and the defense was that the plaintiff was doing business in this state without having obtained a license therefor and therefore could not maintain the suit. This court held otherwise, and we are of the opinion that the decision is authority in support of the contention that the defendant in the case at bar is not doing business in Mississippi insofar as Bays Land and William Dunlap, the local residents in "Webster County, are concerned. Compare Williams v. Bruce’s Juices, D. C., 35 F. Supp. 847.

This bring's us to the question of whether or not the maintenance of the Jackson Office under the supervision of Kenneth Toler under the circumstances hereinbefore mentioned should serve to distinguish the present case from that of Item Company, Ltd., v. Shipp et al., supra, the New Orleans newspaper not having maintained an office in this state in that case.

In the case of Layne v. Tribune Company, 63 App. D. C. 213, 71 F. (2d) 223, decided by the Court of Appeals of the District of Columbia, and wherein certiorari was denied in 293 U. S. 572, 55 S. Ct. 83, 79 L. Ed. 670, it was held that where the defendant, Tribune Company, an Illinois corporation, engaged in publishing the Chicago Daily Tribune and the Chicago Sunday Tribune at Chicago, Illinois, was not doing business in the District of Columbia, although its papers were circulated extensively throughout the country, and certainly in the City of Washington, where process was served on Arthur S. Henning, an employee of defendant company, in charge of the collection of news items in the City of Washington, and the forwarding of them to the Tribune Office in Chicago. In that case, the defendant company not only maintained an office in Washington,, in charge of Henning, but there were three other reporters and two telegraph operators employed in that office. The defendant maintained a leased telegraph wire between Washington and Chicago, its home office. The news articles were examined at Chicago and used or discarded by the defendant and supplied to other newspapers. It was also shown that the defendant maintained a telephone in the Washington Office, and “Henning had authority to purchase supplies for the office; employ, when business required, additional telegraph operators; all of which items were put in his expense account, which was paid from the Chicago office. Henning’s and the other employees’ salaries were paid directly from the Chicago office. The rent and furnishings of the office in Washington were paid for directly from the Chicago office. It also appeared that defendant company made no contracts of any nature in the District of Columbia, and no money was received by any of the employees here for contracts entered into by defendant, or for the sale of defendant’s papers here, or for advertising. No employee of defendant was authorized to enter into any contract with any other corporation outside of the state of Illinois. On this statement of facts, the court below held that defendant company was not doing business in the District of Columbia within the terms of the statute and could not be held subject to service of process here. We think the decision of the court was right. . . . Green v. Chicago, B. & Q. R. Co., 205 U. S. 530, 27 S. Ct. 595, 51 L. Ed. 916, and supported by St. Louis Southwestern Ry. Co. v. Alexander, 227 U. S. 218, 227, 33 S. Ct. 245, 57 L. Ed. 486, Ann. Cas. 1915B, 77; International Harvester Co. v. Kentucky, 234 U. S. 579, 583, 34 S. Ct. 944, 58 L. Ed. 1479; Philadelphia & Reading Ry. Co. v. McKibbin, 243 U. S. 264, 37 S. Ct. 280, 61 L. Ed. 710.”

We are unable to distinguish the facts iii the case at bar insofar as the maintenance of the Jackson Office in charge of Kenneth Toler is concerned from the facts in the case of Layne v. Tribune Company, supra. In that case, Title 24, Section 373 of the District Code 1929, among other things provided: “In actions against foreign corporations doing business in the District all process may be served on the agent of such corporation or person conducting its business, or, in case he is absent and can not be found, by leaving a copy at the principal place of business in the District, or, if there be no such place of business, by leaving the same at the place of business or residence of such agent in said District, and such service shall be effectual to bring the corporation before the court,” — a statute designed to subject a foreign corporation doing business in the District of Columbia to suit, and in accordance with the same purposes sought to be accomplished by Chapter 246, Laws of Mississippi 1940, supra, even though the two statutes are different from that involved in the case of Item Company, Ltd., v. Shipp et al., supra.

It was also held in the case of Lauricella v. Evening News Pub. Co. (D. C.), 15 F. Supp. 671, that a newspaper located in a foreign state, maintaining advertising salesman and staff within state to solicit orders for display advertising subject to approval of manager at home office at which all bills were handled, where salesman could neither employ, discharge, nor fix compensation of his staff, was not "doing business" within state so as to authorize service of summons upon salesman. See also Cannon v. Time, Inc. (4 Cir.), 115 F. (2d) 423; Merrimon v. Martindale-Hubbell, Inc. (D. C.), 36 F. Supp. 182.

We have carefully examined the decisions relied upon by the appellant, and we find that none of them hold the contrary to the decision in Layne v. Tribune Company, supra, under similar facts and circumstances. The case more nearly in point to the contrary is that of Acton v. Washington Times Co. (D. C. Md.), 9 F. Supp. 74, 76. In that case, the alleged libel was by one of the defendant’s reporters located in the State of Maryland, and the District Court in that case followed the decisions of the state court in construing a Maryland statute in that behalf. It was held that since one of the functions of a newspaper is that of gathering news “If a foreign corporation sees fit to perform any one of these functions in a given jurisdiction, it necessarily follows that such performance raises the inference that the corporation is present and doing business within that jurisdiction." In response to that suggestion, it may be noted that in the case of Green v. Chicago, etc., Railroad Co., supra, the railroad company had its agent in Pennsylvania soliciting freight and passenger business, which is business essential to be obtained in the operation of a railroad, but it was held that the railroad company was not subject to the jurisdiction of the courts of Pennsylvania on the ground that it was performing one of its essential functions in that state. At any rate, this decision of the Federal District Court, even though deemed persuasive, is not in our opinion controlling as against the other decisions hereinbefore cited.

Perfect candor constrains us to say that one’s first reaction is adverse to the contention that the Commercial Appeal, with a daily circulation of approximately forty thousand copies of its papers in this state, is not doing business here, but after an examination of the reported cases and a consideration of the legal principles involved, we must hold that such contention is well taken, and that the defendant is not amenable to the service of process in this state; and that it would violate due process of law contrary to Section 1 of Article XIY of the Constitution of the United States to subject it to the jurisdiction of our courts unless its business here is of such nature and character as to warrant the inference that it has subjected itself to the local jurisdiction and is present within the state through duly authorized officers or agents within the sense of doing business as defined by the decisions in the Federal Supreme Court in its application of that constitutional provision.

The judgment of the court below in dismissing the suit must therefore be affirmed without regard to the fact that the judgment of dismissal was based on a different ground than that upon which we have reached our conclusion.

Affirmed.