1. When it is claimed in a case from a state court that service
on a foreign corporation is void under the due process clause of
the Fourteenth Amendment because the corporation was not present
and doing business in the state, this Court will ascertain for
itself the facts disclosed by the record. P.
289 U. S.
86.
2. Selling goods in a state through a controlled subsidiary does
not subject a foreign corporation to a general liability to be sued
there.
Cannon Mfg. Co. v. Cudahy Co., 267 U.
S. 333,
267 U. S.
336-337. P.
289 U. S.
88.
3. In order to hold a foreign corporation, not licensed to do
business in a state, responsible under the process of a local
court, the record must disclose that it was carrying on business
there at the time of attempted service. P.
289 U. S.
88.
209 Wis. 476, 245 N.W. 194, reversed.
Appeal from a judgment denying a writ of prohibition to prevent
further prosecution of an action on certain bonds.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
By an original proceeding in the Supreme Court of Wisconsin
appellant unsuccessfully sought a writ commanding the judge of the
circuit court of Milwaukee County to desist from further
proceedings in the cause instituted against it by Katherine Gold to
recover principal and interest of certain bonds then in default.
The
Page 289 U. S. 86
petition disclosed the circumstances under which the original
summons and complaint were served upon the president of the
corporation and alleged that, although the circuit court had not
acquired jurisdiction, it was about to enter judgment contrary to
the inhibition of the Fourteenth Amendment.
An alternative writ issued. The trial judge, appellee here, made
a return in which he incorporated the evidence relied on to sustain
his conclusion that jurisdiction had been acquired through service
of summons as authorized by statute. The supreme court ruled that
the statute -- Wisconsin Statutes (1931) ยง 262.09 -- had been
properly construed and applied; also that there was nothing to show
conflict with the Federal Constitution. Accordingly, the prayer for
relief was denied.
State v. Gregory, 245 N.W. 194. The
validity of the statute was adequately challenged: the matter is
here by appeal.
In the circumstances, we must ascertain for ourselves the facts
disclosed by the record.
Philadelphia & Reading R. Co. v.
McKibbin, 243 U. S. 265;
Truax v. Corrigan, 257 U. S. 312,
257 U. S.
324-325. These appear from the pleadings and three
affidavits presented in the trial court on the motion to vacate
service of the summons -- one by Frederick Rupprecht in support of
the motion and two in opposition by Walter L. Gold and Morris
Karon.
It appears:
The Consolidated Textile Corporation is organized under the laws
of Delaware. It has never been licensed to do business in
Wisconsin; has no place of business or property therein, and no
officer or agent is stationed in that state. Its principal place of
business is New York City, and its president, Frederick K.
Rupprecht, resides there.
In 1921, the corporation issued and sold a series of
twenty-year, 8 percent bonds, with interest coupons payable
semiannually. Coupons due December 1, 1930, and
Page 289 U. S. 87
thereafter were not paid. A bondholders' committee received on
deposit 70 percent of the outstanding bonds.
Walter L. Gold, an attorney with offices in Milwaukee,
Wisconsin, and others represented by him, owners of $9,200 of these
bonds, declined to deposit them with the committee and caused suit
to be brought in the Municipal Court, New York City, to recover
interest which fell due December 1, 1930. In that suit, motion for
summary judgment was granted.
Rupprecht, president of the corporation, believing that the
interest of all bondholders would be subserved if final judgment
were withheld, by communications sent from New York sought a
conference with Gold at Milwaukee for the purpose of acquainting
him with the facts and dissuading him from permitting final
judgment. He with reluctance assented. With the sole purpose of
engaging in such conference and without intending to submit the
corporation to the jurisdiction of the state of Wisconsin,
Rupprecht went to Gold's law office in Milwaukee on the morning of
January 14, 1932. His intention was to discuss the New York suit
and to present facts which he believed would cause Gold to withhold
final judgment in the New York case and agree to deposit his own
bonds and recommend the deposit of others with the bondholders'
committee.
During an interview lasting one and one-half hours in the
attorney's office, sundry matters relating to the corporation's
affairs were discussed. While there, Rupprecht was served with
summonses (also complaints) addressed to the corporation commanding
that it appear and answer in separate actions instituted by
Katherine Gold and six others to recover upon certain of the
above-described bonds and interest -- all of whom Gold represented.
In anticipation of Rupprecht's arrival in Milwaukee, the summonses
and complaints had been prepared.
Page 289 U. S. 88
In his affidavit, Gold stated that he had
"been informed that, through Consolidated Selling Co., Inc.,
which is the selling agency for Consolidated Textile Corporation
and is a subsidiary wholly controlled by Consolidated Textile
Corporation and is an agent of Consolidated Textile Corporation,
the Consolidated Textile Corporation sells goods in Wisconsin,
to-wit: to Gimbel Bros. in Milwaukee and Sears, Roebuck & Co.,
in Milwaukee."
The unimportance of the statement concerning acts of the
controlled corporation -- Consolidated Selling Company -- is clear
enough in the light of what we said in
Cannon Mfg. Co. v.
Cudahy Packing Co., 267 U. S. 333,
267 U. S.
336-337.
In order to hold a foreign corporation not licensed to do
business in a state responsible under the process of a local court,
the record must disclose that it was carrying on business there at
the time of attempted service.
International Harvester Co. v.
Kentucky, 234 U. S. 579,
234 U. S.
583-585.
"The general rule deducible from all our decisions is that 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 or district where service is
attempted."
People's Tobacco Co. v. American Tobacco Co.,
246 U. S. 79,
246 U. S.
87.
Opinions here in recent causes sanctioning and applying this
general rule show plainly enough, we think, that the appellant
corporation was not present within the jurisdiction of Wisconsin,
as required.
Philadelphia & Reading R. Co. v.
McKibbin, 243 U. S. 265;
Rosenberg Bros. & Co. v. Curtis Brown Co.,
260 U. S. 516;
Bank of America v. Whitney Bank, 261 U.
S. 171,
261 U. S. 173;
James-Dickinson Co. v. Harry, 273 U.
S. 119,
273 U. S.
122.
The judgment of the court below must be reversed. The cause will
be remanded there for further proceedings not inconsistent with
this opinion.
Reversed.