In the absence of consent, a corporation of one state may not be
summoned in another, in an action
in personam, unless it
is doing business in the state where it is served in such manner
and to such extent as to warrant the inference that it is present
there.
The process must be served on some authorized agent of the
corporation.
The questions whether the corporation was doing business and
whether the person served was its authorized agent being vital to
the jurisdiction, either, if duly raised, is subject to be reviewed
directly by this Court, as to findings of fact as well as legal
conclusions, upon certificate from the district court under § 238
of the Judicial Code.
A railroad corporation not owning or operating any part of its
railway or holding other property within a state may not be said to
be doing business there merely because cars shipped by it, loaded
with the goods of its shippers, pass into that state and are
returned therefrom over the line of a connecting carrier (each
carrier receiving only its proportionate share of the freight
charged for the interstate haul), or because the connecting
carrier, within the state, sells coupon tickets and displays the
other carrier's name at its station and in the telephone directory
to promote travel and public convenience.
The fact that corporations subsidiary to another are doing
business in a
Page 243 U. S. 265
state does not warrant finding that the other is present there,
doing business.
Whether a corporation doing business in a state may be served
there on a cause of action arising in another state and unrelated
to the business in the first -- not decided.
An arrangement by counsel designed merely to facilitate an
attempted service of summons on the president of a corporation
while passing through a state and engaged on his private affairs
does not estop the corporation from contesting the jurisdiction
upon the ground that it was not doing business in the state.
The case is stated in the opinion.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
A foreign corporation is amenable to process to enforce a
personal liability, in the absence of consent, only if it is doing
business within the state in such manner and to such extent as to
warrant the inference that it is present there. And even if it is
doing business within the state, the process will be valid only if
served upon some authorized agent.
St. Louis Southwestern Ry.
Co. v. Alexander, 227 U. S. 218,
227 U. S. 226.
Whether the corporation was doing business within the state, and
whether the person served was an authorized agent, are questions
vital to the jurisdiction of the court. A decision of the lower
court on either question, if duly challenged, is subject to review
in this Court, and the review extends to findings of fact as well
as to conclusions of law.
Herndon-Carter Co. v. James N. Norris
& Co., 224 U. S. 496;
Wetmore v. Rymer, 169 U. S. 115. The
main question presented here is whether
Page 243 U. S. 266
the plaintiff in error -- defendant below -- was doing business
in New York.
The Philadelphia & Reading Railway Company, a Pennsylvania
corporation, operated a railroad in that state and in New Jersey.
McKibbin, a citizen and resident of New York, was a brakeman in one
of its New Jersey freight yards. For injuries sustained there, he
brought this action in the United States District Court for the
Southern District of New York. The summons was served on
defendant's president, while he was passing through New York
engaged exclusively on personal matters unconnected with the
company's affairs. The defendant appeared specially in the cause
for the sole purpose of moving to set aside the service of the
summons, and invoked the provisions of the federal Constitution
guarantying due process of law. The motion was denied
"upon the sole ground that, upon the facts stated in the
affidavits said defendant is doing business within the State of New
York, so as to be subject to service of process within said
state."
Under a right reserved in the order, the objection to the
jurisdiction was renewed in the answer and insisted upon at the
trial before the jury. The motion to dismiss was again heard upon
the affidavits originally presented, and was denied. Exceptions
were duly taken. A verdict was rendered for the plaintiff; judgment
entered thereon, and the case brought here on writ of error, the
question of jurisdiction being certified in conformity to § 238 of
the Judicial Code.
The affidavits established the following facts: no part of the
Philadelphia & Reading's railroad is situated within the State
of New York. It has no dock or freight or passenger ticket office
or any other office or any agent or property therein. Like other
railroads distant from New York, it sends into that state, over
connecting carriers, loaded freight cars, shipped by other persons,
which cars are, in course of time, returned. The carriage within
that
Page 243 U. S. 267
state is performed wholly by such connecting carriers, which
receive that portion of the entire compensation paid by the shipper
therefor, and the Philadelphia & Reading receives only that
portion of the compensation payable for the haul over its own line.
The Central Railroad of New Jersey is such a connecting carrier,
and has a ferry terminal at the foot of West 23d St., New York
City. It issues there the customary coupon tickets over its own and
connecting lines, including the Philadelphia & Reading and the
Baltimore & Ohio. The whole ticket in each case is issued by
the Central Railroad of New Jersey, and each coupon so recites. In
these tickets there is a separate coupon for the journey over each
of the connecting railroads, and the coupon for the journey over
each such railroad bears also its name. Each coupon is declared
thereon to be "void if detached." The Philadelphia & Reading
receives, in ultimate accounting between the carriers, that portion
of the fare which is paid for the journey over its own line.
Passengers for points on the Philadelphia & Reading or on the
Baltimore & Ohio, or beyond, may reach these railroads over the
Central Railroad of New Jersey. At various places in and on this
ferry terminal are signs bearing the name "Philadelphia &
Reading," "P. & R.," or "Reading" -- and also like signs of the
"Baltimore & Ohio," or "B. & O." In the New York Telephone
Directory there are inserted the words "Phila. & Reading Ry.,
ft. W. 23d St. Chelsea 6550." These signs on the terminal, this
insertion in the telephone directory, and the information given in
response to inquiries at the ticket office or over the telephone
are all designed to facilitate and encourage travel and for the
convenience of the public. Neither the Philadelphia & Reading
nor the Baltimore & Ohio has any office or any employee at the
terminal. The Philadelphia & Reading did not direct the
insertion of its name in the telephone book. Chelsea 6550 is the
number of the trunk line of the Central Railroad
Page 243 U. S. 268
of New Jersey, and that company pays the whole expense of the
telephone service.
An affidavit filed on plaintiff's behalf states that the names
of the Philadelphia & Reading Coal & Iron Company and of
the Philadelphia & Reading Trans. Line, Towing Dept., appear in
the telephone directory as at 143 Liberty Street, telephone number
5672 Cortlandt, and upon information and belief alleges that these
are subsidiary companies of the Philadelphia & Reading, and
"tow the cars of said company from the Jersey points to the City of
New York."
The finding that the defendant was doing business within the
State of New York is disproved by the facts thus established. The
defendant transacts no business there, nor is any business
transacted there on its behalf except in the sale of coupon
tickets. Obviously the sale by a local carrier of through tickets
does not involve a doing of business within the state by each of
the connecting carriers. If it did, nearly every railroad company
in the country would be "doing business" in every state. Even
hiring an office, the employment by a foreign railroad of a
"district freight and passenger agent . . . to solicit and procure
passengers and freight to be transported over the defendant's
line," and having under his direction "several clerks and various
traveling passenger and freight agents" was held not to constitute
"doing business within the state."
Green v. Chicago, Burlington
& Quincy Ry. Co., 205 U. S. 530. Nor
would the fact, if established by competent evidence, that
"subsidiary companies" did business within the state, warrant a
finding that the defendant did business there.
Peterson v.
Chicago, Rock Island & Pacific Ry. Co., 205 U.
S. 364. As the defendant did no business in New York, we
need not consider its other contention -- that it could not be sued
there on a cause of action arising in New Jersey and in no way
connected with the business alleged to be
Page 243 U. S. 269
done in New York. On this proposition, we express no
opinion.
On behalf of the plaintiff, it was also urged that an
arrangement between counsel by which service of the summons had
been facilitated operated as a waiver of all objections to the
jurisdiction of the court. We find this contention to be
unfounded.
The judgment of the district court is reversed, and the cause
remanded to that court with directions to dismiss it for want of
jurisdiction.
Reversed.