Wold v. J. B. Colt Co.

114 N.W. 243, 102 Minn. 386, 1907 Minn. LEXIS 459

• Court: Supreme Court of Minnesota
• Decided: November 29, 1907
• Docket: Nos. 15,304—(32)
• Status: Published

Opinion

ELLIOTT, J.

The summons in this action against the J. B. Colt Company, a corporation organized under the laws of the state of New York, was served upon I. E. Burt, a resident of the city of Minneapolis. A motion was made by the defendant to set aside the service of the summons on the ground that the defendant corporation was not doing business in the state of Minnesota and that Burt was not an agent of the defendant upon whom service could be made. The court granted the motion and the plaintiff appealed from the order.

It appears from the affidavits that Burt was not in fact the agent of the corporation, but that he was engaged in selling an acetylene gas generator, manufactured by the corporation, in certain counties in the state of Minnesota, under circumstances which might possibly justify a court in holding that the corporation had held him out as its agent and would therefore be estopped in the action from denying that he was its agent. The question is whether jurisdiction over a foreign corporation can be obtained by the service of the summons upon a person who is not in fact its agent, but who may for the purpose of the trial be held an agent by the application of the doctrine of estoppel.

A state may refuse permission to a foreign corporation to transact business within its borders, or it may grant it upon such conditions as it chooses to impose. Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 20 Sup. Ct. 518, 44 E. Ed. 657. When a foreign corporation enters a state and does business there, it assents to the conditions imposed by a statute that valid service may be made upon the agent by whom it is there represented. But it is only when the foreign corporation is doing business in the state that service may be made upon its agent, and in connection with questions of jurisdiction it is held that what is “doing business” is a question of due process of law under the federal constitution. Grant v. Cananea, 117 App. Div. 576, 102 N. Y. Supp. 642; Conley v. Mathieson Alkali Works, 190 U. S. 406, 23 Sup. Ct. 728, 47 L. Ed. 1113. In St. Clair v. Cox, 106 U. S. 350, 1 Sup. Ct. 354, 27 L. Ed. 222, the court said that the condition with reference to the service of summons upon an agent “must not, however, encroach upon that principle of natural justice which requires notice of a suit to a party before he can be bound by it. It must be reasonable, and the service provided for should be only upon such agents as may be properly deemed representative of the foreign corporation.” In Connecticut Mut. Life Ins. Co. v. Spratley, 172 U. S. 603-610, 19 Sup. Ct. 308, 43 L. Ed. 569, Mr. Justice Peclcham said that, if the corporation is engaged in business within the state, “the service of process must be upon some agent so far representing the corporation in the state that he may properly be held in law an agent to receive such process in behalf of the corporation. An express authority to receive process is not always necessary.”

It is well settled by authority that the agent upon whom service may be made must be one having in fact a representative capacity. In Prof. Beale’s recent work on Foreign Corporations (section 271) it is said: “A person who is not really employed by the corporation, but is merely an agent by estoppel or by construction of law, is not a proper person to serve.” Gottschalk Co. v. Distilling & Cattle Feeding Co. (C. C.) 50 Fed. 681; Doe v. Springfield Boiler & Mnfg. Co., 104 Fed. 684, 44 C. C. A. 128. In 19 Cyc. 1328, Judge Thompson says “that process must have been served upon an 'agent sustaining such a relation to it that notice to the agent might well be deemed notice to the principal without a violation of .the principles of natural justice.” In Mikolas v. Hiram Walker & Sons, 73 Minn. 305, 76 N. W. 36, this court said: “The statute does not define the word ‘agent’; but, as the service of process goes to the jurisdiction of the court over the person, it must be so construed as to conform to the principles of natural justice and so that the service will constitute ‘due process of law.’ To do this the agent must be one having in fact a representative capacity and derivative authority. Such agent must be one actually appointed and representing the corporation as a matter of fact, and not one created by construction .or implication, contrary to the intention of the parties.”

Although the question of estoppel was not considered in the Mikolas case, the court clearly stated the principles which must control the present case. When a personal judgment is sought, the service of the summons upon a person who does not stand in a representative capacity to the corporation does not constitute due process of law as defined by the federal courts in numerous decisions which upon this question are controlling. In all but one of the cases to which we are referred by the appellant an agency in fact existed, and the ques-lion was whether the actual agency was broad enough to justify the conclusion that the agent was authorized to accept service.

The order of the trial court is therefore affirmed.