Western Elec. Supply Co. v. Abbeville Elec. Co., 197 U.S. 299 (1905)

U.S. Supreme Court

Western Elec. Supply Co. v. Abbeville Elec. Co., 197 U.S. 299 (1905) Western Electrical Supply Company v.

Abbeville Electric Light & Power Company

No. 178

Argued March 14, 1905

Decided April 3, 1905

197 U.S. 299

ERROR TO THE SUPREME COURT

OF THE STATE OF SOUTH CAROLINA

Syllabus

A foreign corporation sued in a state court appeared specially and objected to the jurisdiction on the sole ground that the person served was not its agent within the meaning of the state statute; the lower court sustained the objection, but on plaintiff's appeal, the highest court of the state held the service good; defendant then demurred on the ground that the statute as to service on foreign corporations was violative of the federal Constitution; on second appeal after the demurrer had been overruled and there had been judgment for plaintiff on the merits, the highest court of the state declined to consider the constitutionality of the statute on the ground that the question of jurisdiction had been settled on the first appeal. Held that the writ of error must be dismissed. Had the objection been raised in the first instance and disposed of on plaintiff's

Page 197 U. S. 300

appeal, the adherence by the state court on defendant's appeal to its prior adjudication might not have cut off consideration of the federal question, but as it was not so raised, and a the state court could in its discretion consider it as coming too late and refuse to pass upon it, the jurisdiction of this Court cannot be maintained.

The facts are stated in the opinion.

Page 197 U. S. 301

MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.

The Abbeville Electric Light & Power Company, a corporation of South Carolina, brought this action in the Circuit Court of Abbeville County, South Carolina, against the Western Electrical Supply Company, a corporation of Missouri, by service of summons and complaint on one George F. Schminke, as agent of the defendant. The complaint alleged that "the cause of action set forth herein arose in this state," and set up the breach of a contract of guaranty in respect of a machine for generating electricity, sold by defendant to plaintiff. Defendant appeared specially, and moved

"to set aside the service of the summons herein on the ground that the party served with the summons and complaint herein on the seventh day of November, 1900, was not an agent of the defendant."

The motion was heard on affidavits at the February term, 1901, of the circuit court, the service set aside, and the case dismissed for want of jurisdiction.

The circuit judge was of opinion that Schminke was not "an agent in the sense in which any agent' is used in the Code." The case was then carried by appeal to the Supreme Court of South Carolina, and the judgment below was reversed, and the cause remanded for further proceedings. 61 S.C. 361.

The court held, speaking through Mr. Chief Justice McIver, that, under the second paragraph of section 155 of the Code,

Page 197 U. S. 302

as amended by an act approved March 2, 1899, the facts being considered in connection with section 1466 of the Revised Statutes of 1893, as amended by an act of 1897, the service was good and valid.

In this view, the court said:

"The case must be regarded as a case in which a domestic corporation, having, as it supposed, a claim against a foreign corporation doing business in this state arising out of a contract made and to be performed in this state, has undertaken to commence its action against such foreign corporation by serving, personally, within the limits of this state an agent of such foreign corporation with a copy of the summons, and in such a case we do not think that any authority has been or can be cited which holds that the state court had not thereby acquired jurisdiction of the foreign corporation."

On the other hand, the court held that, if the case were one in which the plaintiff, a domestic corporation, had brought its action on a contract not made, and not to be performed, in the state, against the defendant, a foreign corporation, and had undertaken to obtain jurisdiction by the personal service of the defendant's agent within the limits of the state, even then, as it appeared upon the facts that the agent was a representative of the defendant corporation in respect of the transaction out of which the suit arose, and was served while within the state for the purpose of attending to the business of the corporation, the service was a good service.

The case having gone back to the circuit court, defendant, by demurrer, renewed its objection to the jurisdiction, this time

"on ground that subd. 1 of section 155 of the Code, providing for service upon a foreign corporation, and the act of the General Assembly of South Carolina amending the said section of the Code by striking out the word 'resident,' approved March 2, 1899, are in contravention of the Fifth and Fourteenth Amendments to the Constitution of the United States, and on the further ground that the act of the General Assembly of South Carolina, entitled 'An Act to

Page 197 U. S. 303

Further Prescribe the Terms and Conditions upon which Foreign Corporations May Do Business within this state,' approved the second day of March, A.D. 1897, is in contravention of the Fifth and Fourteenth Amendments to the Constitution of the United States."

The demurrer was overruled, and the case went to verdict and judgment on the merits, whereupon it was again taken by appeal to the supreme court. That court declined to express any opinion on the constitutional questions, and affirmed the judgment. 66 S.C. 328. The court held the question of jurisdiction had already been determined, and that it was not bound to reexamine it. This was, of course, a ground broad enough to sustain the judgment, and as the objection that the state statutes were inconsistent with the federal Constitution was not raised until the case came on for the second hearing, it is plain that the supreme court could, in its discretion, treat it as coming too late to call for decision. Had that objection been raised in the first instance, and been disposed of, then, inasmuch as the judgment of the circuit court was at that time reversed on plaintiff's appeal, the adherence by the supreme court to its prior adjudication as the law of the case, on defendant's appeal, would not, in itself, have cut off consideration of the federal questions; but it was not so raised, and, as the case stands, we are of opinion that our jurisdiction cannot be maintained.

Writ of error dismissed.