Premo Specialty Mfg. Co. v. Jersey-Creme Co.

200 F. 352, 43 L.R.A.N.S. 1015, 1912 U.S. App. LEXIS 1839

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 7, 1912
• Docket: No. 2,083
• Status: Published

Opinion

MORROW, Circuit Judge

(after stating the facts as above). Section 411 of the Code of Civil Procedure of California, provides as follows:

“The summons must, be served by delivering a copy thereof as follows: v * «■ jf the suit is against a foreign corporation, or a nonresident joint-stock company or association, doing business and having a managing or business agent, cashier, or secretary within this state, to such agent, cashier or secretary.”

There may be a question upon the facts stated in the affidavits whether the defendant company was doing business within the state of California with respect to the sale of the article designated as Jersey-Creme at the time service of summons was made upon T. R. Blanchard, the treasurer and secretary of the defendant company at Los Augeles, Cal.; but there can be no question about the business of the defendant in California in its dealings with the plaintiff in the purchase of aseptic straw dispensers. The contract for the manufacture by the plaintiff and the delivery to the defendant of these articles was entered into by an officer of the defendant at Ros Angeles, Cal., and the articles were delivered to the defendant under the contract f. o. b. the cars at that place, and the present action arises under the terms of that contract. It is elementary that in the delivery of goods to a common carrier under such a contract the carrier becomes the agent of the purchaser, and the delivery to the carrier is in legal effect a deíivery to the purchaser. United States v. Andrews, 207 U. S. 229, 240, 28 Sup. Ct. 100, 52 L. Ed. 185. The deliveries of the articles mentioned in the contract were, therefore, made to the defendant in Los Angeles, Cal.

It is admitted in the affidavits introduced by the defendant that when T. E. Blanchard, the treasurer and secretary of the defendant company, was served with the summons in this case at Los Angeles, he had gone there from Texas as an officer of the defendant company for the purpose of conferring with the officers and directors of the plaintiff company concerning matters relating to this contract and for the adjustment of differences arising under its terms. With respect to this contract, made in California, the defendant was manifestly engaged in the transaction of business in California, and Blanchard, its agent, was authorized by the defendant to transact the business growing out of that contract in California. In St. Clair v. Cox, 106 U. S. 350, 354, 365, 1 Sup. Ct. 354, 357, 358 (27 L. Ed. 222), Mr. Justice Field, in discussing the jurisdiction of the court acquired by service of process on the agent of a foreign corporation, said:

“Formerly it was held, that a foreign corporation could not be sued in an action for the recovery of a personal demand outside of the state by which, it was chartered. * * * This doctrine of the exemption of a corporation from suit in a state other than that of its creation was the cause of much inconvenience, and often of manifest injustice. The great increase in the number of corporations of late years, and the immense extent of their business, only made this inconvenience and injustice more frequent and marked. Corporations now enter into all the industries of the country. The business of banking, mining, manufacturing, transportation, and insurance is almost entirely carried on by them, and a large portion of the wealth of the country is in their hands. Incorporated under the laws of one state, they carry on the most extensive operations in other states. To meet and obviate this inconvenience and injustice, the Legislatures of. several states interposed, and provided for service of process on officers and agents of foreign corporations doing business therein. Whilst the theoretical and legal view, that the domicile of a corporation is only in the state where it is created, was admitted, it was perceived that when a foreign corporation sent its officers and agents into other states and opened offices, and carried on its business there, it was, in effect, as much represented by them there as in the state of its creation. As it was protected by the laws of those states, allowed to carry on its business within their borders, and to sue in their courts, it seemed only right that it should be held responsible in those courts to obligations and liabilities there incurred. All that there is in the legal residence of a corporation in the state of its creation consists in the fact that by its laws the corporators are associated together and allowed to exercise as a body certain functions, with a right of succession in its members. Its officers and agents constitute all that is visible of its existence; and they may be authorized to act for it without as well as within the state. There would seem, therefore, to I)e no sound reason why, to the extent of their agency, they should not he equally deemed to represent it in the states for which they are respectively appointed when it is called to legal responsibility for their transactions. The case is unlike that of suits against individuals. They can act by themselves, and upon them process can be directly served; but a corporation can only act and he reached through agents. Serving process on its agents in other states, for matters within the sphere of their agency, is, in effect, serving process on it as much as if such agents resided in the state where it was created.”

The question in the case was whether a Michigan court had obtained jurisdiction over an Illinois corporation by service of process upon a person who, the return of the officer recited, was agent of the Illinois corporation in the place where served. Judge Field refers to the law of Michigan relating to service of process and the decision of the Supreme Court of that state in Newell v. Great Western Railway Co., 19 Mich. 336, holding that the service upon the agent of a railroad corporation was not a service upon the corporation unless at the time of such service he then in a manner impersonated the company. Referring to this character of agency, the opinion of Mr. Justice Field continues:

‘'According to the view thus expressed by the .Supreme Court of Michigan, service upon an agent of a foreign corporation will not be deemed sufficient, unless he represents the corporation in the state. This representation hu-idles that the corporation does business, or has business, in the state for the transaction of which it sends or appoints an agent there.”

While the Supreme Court did not have before it the precise question now under consideration, the court does in effect determine that the service of process upon the agent of a foreign corporation who represents the corporation in the matter which is the subject of controversy in the suit in which service is made would be sustained. In the present case the service of process upon Blanchard was with respect to a matter within the sphere of his agency, and was therefore as much a service on the defendant as if the service had been upon Blanchard in the state where he resided.

In Estes v. Belford (C. C.) 22 Fed. 275, service of process had been made upon an agent of an Illinois corporation in New York state. The offices of the corporation were located in Illinois, and the officers resided there. The person served was the agent of the defendant corporation in the transaction out of which the suit arose. The corporation was doing other business in the state of New York by another agent, and the court was of the opinion that service upon that agent might well have been objected to; hut with respect to the agent upon whom service wás made the court said:

•‘The agent” (upon whom service was made) “is the agent in the very transaction out of which the suit arises. The corporation is found here doing business by this agent. If ir was doing also some other business by another agent, and service liad been made upon that agent, it might well lie objected to. The statute, probably, does not mean any agent in any business, but the agent in the business in controversy in the suit.”

With respect to the service upon such an agent the court said:

“This is not any hardship, or. if any, not aw undue hardship, upon this defendant, as between it and the orators. It is compelled to answer away from its domicile, but not any further away than it has gone voluntarily by its agents to do that which has given occasion for the process and its service.”

In Cone v. Tuscaloosa Mfg. Co. (C. C.) 76 Fed. 891, the president of a foreign corporation was casually in the state of New York, when he was served with process in the case. The court (Judge Lacombe) said with respect to the sufficiency of this service:

“The circumstances that the president of the defendant corporation is here casually to discharge his duties as a public officer, and not on any business for the corporation, is immaterial, if the papers show that the corporation does business here. The cause is a removed one. Service on the president is undoubtedly sufficient, under the state law; and if the defendant corporation has come into the state to do business, it will be assumed to have assented to be bound by the state law.”

In Houston v. Filer & Stowell Co. (C. C.) 85 Fed. 757, the plaintiffs were residents of Illinois, and the defendant was a Wisconsin corporation. Differences arose between the parties with respect to the fulfillment of a contract. The general manager of the defendant went to Chicago to confer with the plaintiffs concerning their differences, and service of summons was made upon him there in the suit arising out of such differences. The court said with respect to the sufficiency of the service on the general manager in that case:

“A corporation is not necessarily 'found in the county or district merely because one of its general officers may be there, though the officer be its general manager. But when he is in the county or district, under charge of the corporation, to do something with respect to the business upon which the suit is brought, and when his being there is not the result of fraudulent enticement, I can see no reason why service on him is not service upon the corporation, or why the corporation is not, in his person, and during the time covered by his presence for such purpose, itself present in the county or district. Had the matter been the manager’s individually, and the suit been against him individually, there can be no doubt the service, under the circumstances stated, ought to .be maintained; but the general manager was, for the time being, in the matter in which he was sent, the corporation, and brought to this county and district the presence of the corporation as effectually as that could be done. The corporation sending him to transact the corporate business was, within the limits of that business, itself present.”

In Brush Creek Coal & Mining Co. v. Morgan-Gardner Electric Co., 136 Fed. 505, the defendant was an Illinois corporation. The suit was brought in the Western district of Missouri, where the defendant corporation never had an officer or an agency. The suit related to an alleged breach of contract on the part of the defendant with respect to the manufacture and delivery of certain machinery and appliances to Kansas City, Mo. Differences arose between the parties as to whether the appliances should be accepted by the plaintiff and upon what terms. An assistant to the defendant’s general manager, having-business in Wyoming for the corporation, stopped over at Kansas City on his return for the purpose of conferring with the plaintiff, and, if possible, adjusting their differences. While there he was served with a summons in the action relating to the differences in controversy. Judge Amidon, sitting in the United States Circuit Court, sustained the service, saying:

“It appears from the evidence taken upon the plea that the officer upon whom process was served in this case was a general officer of the defendant corporation, that he was in the state at the time of the service, engaged in the business of the corporation, having come into the state for that purpose a Jone, and that the matter in which he was then engaged on behalf of the defendant constitutes the very cause of action upon which the plaintiff, bases its right to recover.”

The court said further:

“Any individual may be served in any state where he is found without regard to the place of his residence. A corporation is entitled to no greater exemption. It ought to he held to be present in any state to which it sends its general officer for the transaction of its corporate business.”

To the same effect is Norton v. Berlin Iron Bridge Co., 51 N. J. Law, 442, 17 Atl. 1079, Fond du Lac Butter & Cheese Co. v. Henningsen Produce Co., 141 Wis. 70, 123 N. W. 640, and Moulin v. Trenton Mutual Ins. Co., 24 N. J. Law, 233. We are in accord with the doctrine of these cases.

The service of process upon an agent of a foreign corporation, who comes into the jurisdiction of the court upon the business of the corporation which is the subject of the suit in which service is made, appears to be above all other class of agents the one upon whom service should be made, in order that notice may be promptly given to the corporation, and that it may be fully advised in the premises, and we see no reason why the foreign corporation doing business within the jurisdiction under such circumstances should not be bound by such a service.

With respect to the presence of Blanchard in Los Angeles at the time lie was served with summons, the evidence is clear that he went "there on behalf of the defendant company voluntarily, and without any improper inducement or fraudulent enticement upon the part of the officers of the plaintiff company. The charge that he was detained in Los Angeles by them for the purpose of securing the service of summons upon him we do not think has been sustained. We are accordingly of the opinion that the service of summons in this case was in accordance with the requirements of the statute of the state, and should be sustained.

The judgment of the lower court is reversed, with instructions to set aside the order quashing the service of summons and dismissing the action.