In a suit in a state court against a foreign corporation where
no property of the corporation is within the state, and the
judgment sought is a personal one, it is material to ascertain
whether the corporation is doing
Page 172 U. S. 603
business within the state, and if so, the service of process
must be upon some agent in the state so far representing it that he
may properly be held in law its agent to receive such process in
its behalf.
A foreign insurance company which has been doing business within
a state through its agents does not cease to do business therein
when it withdraws its agent and ceases to obtain or ask for new
risks or obtain new policies, while at the same time its old
policies continue in force, and the premiums thereon are paid by
the policyholders to an agent residing in another state who was
once the agent in the state where the policyholders reside.
On the facts stated in the opinion of the Court, it is held that
the law implies, from the appointment and authority of the agent of
the plaintiff in error, the power to receive in Tennessee service
of process against the company.
If it appears that there is a law of the state in respect to the
service of process upon foreign corporations, and that the
character of an agency of a foreign corporation is such as to
render it fair, reasonable and just to imply an authority on the
part of the agent to receive service, the law will, and ought to,
draw such an inference and imply such authority, and service under
such circumstances and upon an agent of that character is
sufficient.
When the Legislature of Tennessee, under the Act of March 22,
1876, permitted the plaintiff in error, a foreign corporation, to
do business within the state on appointing an agent therein upon
whom process might be served, and when, in pursuance of such
provisions, the company entered the state and appointed the agent,
no contract was thereby created which would prevent the state from
thereafter passing another statute in regard to service of process,
and making such statute applicable to all foreign corporations
already doing business within the state.
The case is stated in the opinion.
MR. JUSTICE PECKHAM delivered the opinion of the Court.
The plaintiff in error filed its bill against the defendant in
error in the Chancery Court of Shelby County, Tennessee, for the
purpose of enjoining her from taking any proceedings under a
judgment by default which she had obtained in the State of
Tennessee against the corporation upon certain policies of
insurance, and also for the purpose of obtaining a
Page 172 U. S. 604
decree pronouncing the judgment void and releasing the
corporation therefrom.
The ground set forth in the bill, and upon which the complainant
sought to have the judgment against it set aside, was that the
complainant was a nonresident of the State of Tennessee, had no
office or agent there at the time the process was served, and was
doing no business in the state, and the person upon whom the
process in the action had been served in behalf of the corporation
was not its representative in the state, and no process served upon
him was in any way effectual to give jurisdiction to the state
court over the corporation. The bill also alleged that the
judgment, if enforced, would result in taking complainant's
property without due process of law, and would violate the Fifth
and Fourteenth Amendments of the Constitution of the United
States.
The defendant in error herein appeared and answered the bill,
and alleged that the judgment she had obtained was a valid and
proper judgment, and she denied the allegation in the bill that
complainant was doing no business in the state at the time of the
service of process, and alleged, on the contrary, that it was then
doing business therein. She asked that the preliminary injunction
theretofore granted should be dissolved.
The court of chancery, upon the trial gave, judgment in favor of
the complainant and decreed that the preliminary injunction granted
in the cause should be made perpetual. The defendant appealed to
the supreme court of the state, where the decree of the court of
chancery was reversed, the injunction dissolved, and a judgment
granted the defendant in error on the bond executed by the company
in obtaining the injunction, for the amount of the original
judgment, with interest from its date, together with the costs of
the suit for the injunction. The complainant thereupon brought the
case here by writ of error.
In addition to the objection that the person upon whom process
was served was not such a representative of the company that
service of process upon him was sufficient to give the court
jurisdiction, the company alleges that under the act of 1875, which
will be referred to hereafter, the company
Page 172 U. S. 605
appointed an agent pursuant to its provisions, and that any act
subsequently passed relating to the service of process upon any
other than the person so appointed could not affect the company,
because such act would impair the contract which it alleges was
created between the state and the company when it appointed an
agent, by its power of attorney, pursuant to the provisions of such
act of 1875.
The material facts are as follows: the corporation is a life
insurance company, incorporated under the laws of, and having is
principal office in, the State of Connecticut. It did a life
insurance business in the State of Tennessee from February 1, 1870,
until July 1, 1894. On March 22, 1875, the State of Tennessee
passed an act to regulate the business of life insurance in that
state, and by section 12 of the act, it was enacted that a company
desiring to transact business by any agent or agents in the state
should file with the insurance commissioner a power of attorney
authorizing the Secretary of State to acknowledge service of
process for and in behalf of such company at any and all times
after a company had first complied with the laws of Tennessee and
been regularly admitted, even though such company may subsequently
have retired from the state or been excluded, and it was made the
duty of the Secretary of State, within five days after such service
of process by any claimant, to forward by mail an exact copy of
such notice to the company. Pursuant to that statute, the company
duly filed a power of attorney as required, and appointed therein
the Secretary of State to receive service of process, and that
power of attorney the company never in terms altered or
revoked.
In 1887, the Legislature of Tennessee passed an act, approved
March 29, 1887, entitled "An act to subject foreign corporations to
suit in this state." The first section of this act provided that
any foreign corporation found doing business in the state should be
subject to suit there to the same extent that said corporations
were by the laws of the state liable to be sued so far as related
to any transaction had in whole or in part within the state or to
any cause of action arising therein, but not otherwise.
Page 172 U. S. 606
The second section provided that any corporation that had any
transaction with persons or concerning any property situated in the
state, through any agency whatever acting for it within the state,
should be held to be doing business, within the meaning of the
act.
The third and fourth sections of the act are set forth in full
in the margin.
*
The company continued to do business in the state after the
passage of this act, and on the 12th day of December, 1889, it
insured the life of Benjamin R. Spratley, the husband of the
defendant in error, for the term of his life, in the sum
Page 172 U. S. 607
of $5,000, for the benefit of his wife, the defendant in error,
or, in case of her death before payment, to his children, etc. The
company also insured the life of Mr. Spratley on the 25th day of
February, 1893, in the sum of $3,000, in favor of his wife, and for
her sole use and benefit, with other conditions not material here.
These policies were issued through the solicitation and by the
procurement of the agent of the company for the states of Tennessee
and Kentucky, and who had headquarters at Louisville, Kentucky. He
came to Memphis and solicited Mr. Spratley to take the policies,
and the application for them was taken by such agent at Memphis.
The defendant in error alleges in her answer that the premiums were
paid thereon in Tennessee up to the death of Mr. Spratley, in
February, 1896, but that fact does not otherwise appear. It does
appear that all premiums had been paid at the time of the death of
Mr. Spratley.
On July 1, 1894, the company ceased issuing any new policies in
the State of Tennessee, and withdrew its agents from the state, and
on July 21, 1894, notified the state insurance commissioner to that
effect. It had, however, a number of policies, other than those
issued on the life of Mr. Spratley, outstanding in the state at the
time it withdrew (how many is not stated), and it continued to
receive the premiums on these policies through its former agent for
that state, and to settle, by payment or otherwise, the claims upon
policies in that state as they fell due.
The former agent resided in Louisville when he received payment
of the premiums, and it does not appear that, after July, 1894, he
was in the State of Tennessee when any payment of premiums was made
to him by Tennessee policyholders. He received these payments as
agent of the company, and it recognized such payments as
sufficient.
Mr. Spratley died in the City of Memphis, in the State of
Tennessee, on the 28th of February, 1896, leaving his widow, the
defendant in error, surviving him. The two policies were in force
at the time of his death. The company, being notified of the death
of Mr. Spratley, sent its agent to Memphis to act under its
instructions in the investigation and adjustment
Page 172 U. S. 608
of the claim. Mr. Chaffee was the agent employed, and he had
been employed in the service of the company since the first day of
July, 1887. The writing under which he was employed stated that the
company employed him
"for special service in any matters which may be referred to
you, with instructions, during the pleasure of the directors of the
company and under the direction of the executive officers; to have
your entire time and services, except upon leave of absence; to pay
the necessary traveling and hotel expenses incurred in the line of
your duty, and to pay you for your time and services at the rate of
$2,500 per annum -- this agreement terminable on the part of the
company at the pleasure of the directors and on your part by thirty
days' written notice."
The company sent Mr. Chaffee specially to the State of Tennessee
for the purpose of investigating into the circumstances of the
death of Mr. Spratley, and into the merits of the claim made by
Mrs. Spratley, and while there, was authorized by the company to
compromise the claim made by her upon terms stated in a telegram
from the vice-President of the company. While Mr. Chaffee was
engaged in negotiations with Mrs. Spratley and her brother in
relation to her claims, and after she had refused to accept the
compromise offered by him in behalf of the company, and on April
15, 1896, he was served, in Memphis, with process against the
corporation in an action upon the policies above mentioned.
The attorneys for the plaintiff also sent a notice addressed to
the President and directors of the company, together with a copy of
the process issued out of the circuit court of Shelby County, which
notice and copy of process were sent to Mr. Dunham, an attorney at
law in the City and County of Hartford, in the State of
Connecticut, who, on May 8, 1896 at Hartford, served them upon the
company by leaving them in the hands of its vice-President, and an
affidavit of that fact was made by Mr. Dunham and filed at the time
of the entry of judgment by default in the clerk's office at
Memphis. A copy of the writ was also sent by registered letter by
John A. Strehl, clerk of the court, addressed to the Connecticut
Mutual Life
Page 172 U. S. 609
Insurance Company, Hartford, Connecticut, and an acknowledgment
of the receipt of such registered letter, signed by William P.
Green, on behalf of the Connecticut Mutual Life Insurance Company,
was also filed with the judgment.
On July 2, 1896, judgment by default was entered against the
defendant, and the judgment recited the above facts in relation to
the service of process on Mr. Chaffee, the sending of the
registered letter from the clerk of the court, and the notice and
copy of process to the attorney, Mr. Dunham, and his service
thereof upon the vice-President of the company at its office in
Hartford, Connecticut. It recited also the fact that the defendant
was doing business in Shelby County, Tennessee, but that it had no
office or agency therein, and that it had wholly failed to make any
appearance, and thereupon the default was entered, and judgment
went against the defendant for the sum of $8,000, being the total
amount due on the life insurance contracts or policies described in
the declaration, and also for costs.
Upon these facts, the question arises as to the validity of the
judgment to set aside which the company has filed this bill.
Without considering, for the moment, the objection that there was a
contract between the state and the company which could not be
impaired, was the service of process upon Mr. Chaffee sufficient to
give the court jurisdiction over the corporation?
When the process was served, the act of 1887, above mentioned,
was in force.
The third and fourth sections of that act have already been set
forth, and they provide that process may be served upon any agent
of the corporation found within the county where the suit is
brought, no matter what character of agent such person may be. We
are not called upon to decide upon the entire validity of this
whole act. The federal question with which we are now concerned is
whether the court obtained jurisdiction to render judgment in the
case against the company so that to enforce it would not be taking
the property of the company without due process of law. Even though
we might be unprepared to say that a service of process upon
Page 172 U. S. 610
"any agent," found within the county, as provided in the
statute, would be sufficient in the case of a foreign corporation,
the question for us to decide is whether, upon the facts of this
case, the service of process upon the person named was a sufficient
service to give jurisdiction to the court over this corporation. If
it were, there was due process of law whatever we might think of
the other provisions of the act in relation to the service upon any
agent of a corporation, no matter what character of agent the
person might be. If the person upon whom process was served in this
case was a proper agent of the company, it is immaterial whether
the statute of the state also permits a service to be made on some
other character of agent which we might not think sufficiently
representative to give the court jurisdiction over the corporation.
If the service be sufficient in this instance, the corporation
could not herein raise the question whether it would be sufficient
in some other and different case coming under the provision of the
state statute.
In a suit where no property of a corporation is within the state
and the judgment sought is a personal one, it is a material inquiry
to ascertain whether the foreign corporation is engaged in doing
business within the state,
Goldey v. Morning News,
156 U. S. 518;
Merchants' Manufacturing Co. v. Grand Trunk Railway Co.,
13 F. 358, and if so, 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.
We think the evidence in this case shows that the company was
doing business within the state at the time of this service of
process. From 1870 until 1894, it had done an active business
throughout the state by its agents therein and had issued policies
of insurance upon the lives of citizens of the state. How many
policies it had so issued does not appear. Its action in July,
1894, in assuming to withdraw from the state was simply a recall of
its agents doing business therein, the giving of a notice to the
state insurance commissioner, and
Page 172 U. S. 611
a refusal to take any new risks or to issue any new policies
within the state. Its outstanding policies were not affected
thereby, and it continued to collect the premiums upon them and to
pay the losses arising thereunder, and it was doing so at the time
of the service of process upon its agent.
The corporation alleged in its bill filed in this suit that the
defendant herein was taking garnishee proceedings against its
policyholders in the state for the purpose of collecting, as far as
possible, the amount of the judgment she had obtained against the
corporation, and it gave in its bill the names of some thirteen of
such policyholders against whom proceedings had been taken by this
defendant. It cannot be said with truth, as we think, that an
insurance company does no business within a state unless it have
agents therein who are continuously seeking new risks and it is
continuing to issue new policies upon such risks. Having succeeded
in taking risks in the state through a number or years, it cannot
be said to cease doing business therein when it ceases to obtain or
ask for new risks or to issue new policies, while at the same time
its old policies continue in force, and the premiums thereon are
continuously paid by the policyholders to an agent residing in
another state, and who was once the agent in the state where the
policyholders resided. This action on the part of the company
constitutes doing business within the state so far as is necessary
within the meaning of the law upon this subject. And this business
was continuing continuing at the time of the service of process on
Mr. Chaffee in Memphis.
It is admitted that the person upon whom process was served was
an agent of the company. Was he sufficiently representative in his
character? He was sent into the state as such agent to investigate
in regard to this very claim, and while there he was empowered to
compromise it within certain stated terms, leaving him a certain
discretion as to the amount. He was authorized to settle the claim
for the amount of the reserve "or thereabouts." He did not leave
his character as agent when he entered the state. On the contrary,
it was as agent, and for the purpose of representing the company
therein, that he entered the state, and as agent he was
Page 172 U. S. 612
seeking a compromise of the claim by the authority of the
company, and therein representing it. Why was he not such an agent
as it would be proper to serve process upon? He had been appointed
an agent by the company; his whole time and services were given to
the company under an appointment made years previously; he received
a salary from the company not dependent upon any particular service
at any particular time. The company having issued policies upon the
life of an individual who had died, and a claim having been made
for payment in accordance with the terms of those policies, the
company clothed him with authority to go into the state, and in its
behalf investigate the facts surrounding the claim, and authority
was given him to compromise it upon terms which left to him
discretion to some extent as to the amount of payment. He was not a
mere agent appointed for each particular case. He was employed
generally by the company to act in its behalf in all cases of this
kind, and as directed by the company in each case. Entering the
state with this authority and acting in this capacity, the company
itself doing business within he state, it seems to us that he
sufficiently represented the company within the principle which
calls for the service of process upon a person who is in reality
sufficient of a representative to give the court jurisdiction over
the company he represents. In view of all the facts, we think it a
proper case in which the law would imply, from his appointment and
authority, the power to receive service of process in the case
which he was attending to.
Taken in connection with the further fact of sending (as
provided for in the statute) a copy of the process and notice
thereof by registered letter to the home office of the company, and
also the personal service upon the company of a copy of the process
and notice thereof at its home office, it must be admitted that one
of the chief objects of all such kinds of service, namely, notice
and knowledge on the part of the company of the commencement of
suit against it, is certainly provided for. We do not intimate that
mere knowledge or notice as thus provided would be sufficient
without a service
Page 172 U. S. 613
on the agent in the state where suit was commenced, but we refer
to it as a part of the facts in the case.
In
Lafayette Insurance Co. v.
French, 18 How. 404, it appeared that a statute of
Ohio made provision for service of process on foreign insurance
companies in suits founded upon contracts of insurance there made
by them with citizens of that state. One of those provisions was
that service of process on a resident agent of a foreign
corporation should be as effectual as though the same was served
upon the principal. In a suit commenced in Ohio against a foreign
corporation by service upon its resident agent, the company
objected to the validity of that service, and that question came
before this Court, and Mr. Justice Curtis, in delivering the
opinion of the Court, said:
"We find nothing in this provision either unreasonable in itself
or in conflict with any principle of public law. It cannot be
deemed unreasonable that the State of Ohio should endeavor to
secure to its citizens a remedy, in their domestic forum, upon this
important class of contracts made and to be performed within that
state, and fully subject to its laws, nor that proper means should
be used to compel foreign corporations, transacting this business
of insurance within the state for their benefit and profit, to
answer there for the breach of their contracts of insurance there
made and to be performed. Nor do we think the means adopted to
effect this object are open to the objection that it is an attempt
improperly to extend the jurisdiction of the state beyond its own
limits to a person in another state. Process can be served on a
corporation only by making service thereof on some one or more of
its agents. The law may, and ordinarily does, designate the agent
or officer on whom process is to be served. For the purpose of
receiving such service and being bound by it, the corporation is
identified with such agent or officer. The corporate power to
receive and act on such service, so far as to make it known to the
corporation, is thus vested in such officer or agent. Now when this
corporation sent its agent into Ohio with authority to make
contracts of insurance there, the corporation must be taken to
assent to the condition upon which alone such business
Page 172 U. S. 614
could be there transacted by them -- that condition being that
an agent, to make contracts, should also be the agent of the
corporation to receive service of process in suits on such
contracts, and, in legal contemplation, the appointment of such an
agent clothed him with power to receive notice for and on behalf of
the corporation as effectually as if he were designated in the
charter as the officer on whom process was to be served or as if he
had received from the president and directors a power of attorney
to that effect. The process was served within the limits and
jurisdiction of Ohio, upon a person qualified by law to represent
the corporation there in respect to such service, and notice to him
was notice to the corporation which he there represented, and for
whom he was empowered to take notice."
The act did not provide for an express consent to receive such
service on the part of the company. The consent was implied because
of the company entering the state and doing business therein
subject to the provisions of the act.
It is true that in the above case, the person upon whom service
of process was made is stated to have been a resident agent of the
company, but the mere fact of residence is not material (other
things being sufficient), provided he was in the state representing
the company and clothed with power as an agent of the company to so
represent it. His agency might be sufficient in such event although
he was not a resident of the state. It is also true that the agent
in that case was an agent with power to make contracts of insurance
in behalf of the corporation in that state, and from that fact, in
connection with the statute, the Court inferred the further fact of
an implied power to receive service of process in behalf of the
corporation. The agent had not, so far as the case shows, received
any express authority from the company to receive service of
process. The Court does not hold, nor is it intimated, that none
but an agent who has authority to make contracts of insurance in
behalf of the company could be held to represent it for the purpose
of service of process upon it. It is a question simply whether a
power to receive service of process can reasonably and fairly be
implied from the kind and character
Page 172 U. S. 615
of agent employed. And while the Court held that an agent with
power to contract was, in legal contemplation, clothed with power
to receive notice for and on behalf of the corporation as
effectually as if he were designated in the charter as the officer
upon whom process was to be served, we think it is not an unnatural
or an improper inference, from the facts in the case at bar, to
infer a power on the part of this agent, thus sent into the state
by the company, to receive notice on its behalf in the same manner
and to the same extent that the agent in the case cited was assumed
to have. In such case, it is not material that the officers of the
corporation deny that the agent was expressly given such power, or
assert that it was withheld from him. The question turns upon the
character of the agent -- whether he is such that the law will
imply the power and impute the authority to him, and if he be that
kind of an agent, the implication will be made notwithstanding a
denial of authority on the part of the other officers of the
corporation.
This case is unlike that of
St. Clair v. Cox,
106 U. S. 350.
There, the record of the judgment, which was held to have been
properly excluded, did not (and there is no evidence which did)
show that the corporation was doing business in the state at the
time of the service of process on the person said to be its agent.
Nor did it appear that the person upon whom the process was served
bore such relations to the corporation as would justify the service
upon him as its agent. In the course of the opinion in that case,
Mr. Justice Field, speaking for the Court, said:
"It is sufficient to observe that we are of opinion that when
service is made within the state upon an agent of a foreign
corporation, it is essential, in order to support the jurisdiction
of the court to render a personal judgment, that it should appear
somewhere in the record -- either in the application for the writ,
or accompanying its service, or in the pleadings or in the finding
of the court -- that the corporation was engaged in business in the
state. The transaction of business by the corporation in the state,
generally or specially, appearing, and a certificate of service of
process by the proper officer
Page 172 U. S. 616
on a person who is its agent, there would in our opinion be
sufficient
prima facie evidence that the agent represented
the company in the business. It would then be open, when the record
is offered as evidence in another state, to show that the agent
stood in no representative character to the company, that his
duties were limited to those of a subordinate employee, or to a
particular transaction, or that his agency had ceased when the
matter in suit arose."
Here, we have the essentials named in the above extract from the
opinion of the Court in
St. Clair v. Cox. We have a
foreign corporation doing business in the State of Tennessee. We
have its agent present within the state, representing it by its
authority in regard to the very claim in dispute, and with
authority to compromise it within certain limits, and his general
authority not limited to a particular transaction. On the contrary,
as seen from his written appointment, his agency for the company
was a continuous one, and had been such since 1887, although, of
course, his agency was limited to a certain department of the
business of the corporation.
The case does not hold that a foreign corporation cannot be sued
in any state unless it be doing business there, and has appointed
an agent expressly that process might be served upon him for it.
Speaking of the service of process upon an agent, the learned
Justice thus continued:
"In the state where a corporation is formed, it is not difficult
to ascertain who are authorized to represent and act for it. Its
charter or the statutes of the state will indicate in whose hands
the control and management of its affairs are placed. Directors are
readily found, as also the officers appointed by them to manage its
business. But the moment the boundary of the state is passed,
difficulties arise. It is not so easy to determine who represents
the corporation there, and under what circumstances service on them
will bind it."
This language does not confine the service to an agent who has
been expressly authorized to receive service of process upon him in
behalf of the foreign corporation. If that were true, it would be
easy enough to determine whether the person represented the
corporation, as unless he had been so
Page 172 U. S. 617
authorized, he would not be its agent in that matter. In the
absence of any express authority, the question depends upon a
review of the surrounding facts and upon the inferences which the
court might properly draw from them. If it appear that there is a
law of the state in respect to the service of process on foreign
corporations, and that the character of the agency is such as to
render it fair, reasonable, and just to imply an authority on the
part of the agent to receive service, the law will and ought to
draw such an inference and to imply such authority, and service
under such circumstances, and upon an agent of that character,
would be sufficient.
It was held in
Pennoyer v. Neff, 95 U. S.
714, that a service by publication in an action
in
personam against an individual, where the defendant was a
nonresident and had no property within the state, and the suit was
brought simply to determine his personal rights and obligations,
was ineffectual for any purpose. The case has no bearing upon the
question here presented.
In
Mexican Central Railway v. Pinkney, 149 U.
S. 194, it was held that the person upon whom process
was served in the State of Texas was not a "local agent" within the
meaning of that term as contained in the Texas statute. It was also
held that the special appearance of the company for the purpose of
objecting that the service of process was not good did not, in the
federal courts, confer jurisdiction as in case of a general
appearance. There is nothing in the case affecting this
question.
In
Maxwell v. Atchison, Texas &c. Railroad, 34 F.
286, the opinion in which was delivered by Judge Brown, United
States District Judge of Michigan, now one of the Justices of this
Court, the decision was placed upon the ground that the business
which the defendant carried on in Michigan was not of such a
character as to make it amenable to suits within that jurisdiction,
especially where the cause of action in the case arose within the
State of Kansas, and the Court also held that the individual upon
whom the process was served was not an officer or managing agent of
the railroad company within the meaning of the act of the
legislature, nor was
Page 172 U. S. 618
he even a ticket agent of the company; that he was a mere
runner, and that service of process upon him for a cause of action
arising in Kansas gave no jurisdiction to the court.
In
United States v. American Bell Telephone Co., 29 F.
17, Judge Jackson stated the three conditions necessary to give a
court jurisdiction
in personam over a foreign corporation:
first, it must appear that the corporation was carrying on its
business in the state where process was served on its agent;
second, that the business was transacted or managed by some agent
or officer appointed by or representing the corporation in such
state; third, the existence of some local law making such
corporation amenable to suit there as a condition, express or
implied, of doing business in the state.
In this case, the company was doing business in the state. The
agent was in the state under the authority and by the appointment
of the company. He was authorized to inquire into and compromise
the particular matters in dispute between the corporation and the
policyholder, and he was no mere special employee engaged by the
company for this particular purpose. And there was a local law --
that of 1887 -- providing for service. It has been recently held in
this Court that as to a circuit court of the United States, where a
corporation is doing business in a state other than the one of its
incorporation, service may sometimes be made upon its regularly
appointed agents there even in the absence of a state statute
conferring such authority.
Barrow Steamship Co. v. Kane,
170 U. S. 100.
Although the legislature, by the act of 1875, provided for
service of process upon a particular person (the Secretary of
State), in behalf of a foreign corporation, and the company had,
pursuant to the provisions of the act, duly appointed that officer
its agent to receive process for it, nevertheless the legislature
provided by law in 1887 for service upon other agents, and the
company continued thereafter to do business in the state.
Continuing to do business, the company impliedly assented to the
terms of that statute, at least to the extent of consenting to the
service of process upon an
Page 172 U. S. 619
agent so far representative in character that the law would
imply authority on his part to receive such service within the
state.
Merchants' Manufacturing Co. v. Grand Trunk
Railway, 13 F. 358, 359. When the service of which plaintiff
in error complains was made, the act of 1875 had been repealed by
chapter 160 of the Laws of 1895, and the company had never
appointed an agent under chapter 166 of the Laws of that year.
There was therefore no one upon whom process could be served in
behalf of the company, excepting under the act of 1887, unless the
plaintiff in error be right in the claim that, by appointing the
Secretary of State its agent to receive process under the act of
1875, a contract was created, and the Secretary of State remained
such agent, notwithstanding subsequent statutes regulating the
subject, or even repealing the act. We will refer to that claim
hereafter. If by the statute of the state provision were made for
the appointment of an agent by the company upon whom process might
be served, and the company had appointed such an agent, and there
was no other statute authorizing service of process upon an agent
of the company other than the one so appointed, we do not say that
service upon any other agent of the company would be good. This is
not such a case, and the question is not here open for
discussion.
A vast mass of business is now done throughout the country by
corporations which are chartered by states other than those in
which they are transacting part of their business, and justice
requires that some fair and reasonable means should exist for
bringing such corporations within the jurisdiction of the courts of
the state where he business was done out of which the dispute
arises.
It was well said in
Railroad Company v.
Harris, 12 Wall. 65,
79 U. S. 83, by
Mr. Justice Swayne, in speaking for the Court, in regard to service
on an agent, that
"when this suit was commenced, if the theory maintained by
counsel for the plaintiff in error be correct, however large or
small the cause of action, and whether it were a proper one for
legal or equitable cognizance, there could be no legal redress
short of the seat of the company in another state. In many
instances, the
Page 172 U. S. 620
cost of the remedy would have largely exceeded the value of its
fruits. In suits local in their character, both at law and in
equity, there could be no relief. The result would be, to a large
extent, immunity from all legal responsibility."
The Court, in view of these facts, was of opinion that Congress
intended no such result.
In holding the service of process upon this particular agent
sufficient in this instance and so far as the character of the
agent is concerned, we do not, as we have already intimated, hold
that service upon any agent mentioned in the act of 1887 would be
good. That question is not before us.
Upon the question relative to the alleged creation of a contract
between the state and the company by the appointment of the
Secretary of State as it agent under the act of 1875 to receive
process for it, we have no doubt.
The act of 1875 stated the terms upon compliance with which a
foreign corporation should be permitted to do business within the
State of Tennessee. There was, however, no contract that those
conditions should never be altered, and when, pursuant to the
provisions of the act of 1875, this power of attorney was given by
the corporation, the state did not thereby contract that, during
all of the period within which the company might do business within
that state, no alteration or modification should be made regarding
the conditions as to the service of process upon the company. When,
therefore, in 1887, the legislature passed another act, and therein
provided for the service of process, no contract between the state
and the corporation was violated thereby, or any of its obligations
in any wise impaired, for the reason that no contract had ever
existed. Instead of a contract, it was a mere license given by the
state to a foreign corporation to do business within its limits
upon complying with the rules and regulations provided for by law.
That law the state was entirely competent to change at any time by
a subsequent statute, without being amenable to the charge that
such subsequent statute impaired the obligation of a contract
between the state and the foreign corporation doing business within
its borders under the former act.
Page 172 U. S. 621
Statutes of this kind reflect and execute the general policy of
the state upon matters of public interest, and each subsequent
legislature has equal power to legislate upon the same subject. The
legislature has power at any time to repeal or modify the act
granting such permission, making proper provision, when necessary,
in regard to the rights of property of the company already acquired
and protecting such rights from any illegal interference or injury.
Douglas v. Kentucky, 168 U. S. 488. The
cases showing the right of a state to grant or refuse permission to
a foreign corporation of this kind to do business within its limits
are collected in
Hooper v. California, 155 U.
S. 648,
155 U. S.
652.
Having the right to impose such terms as it may see fit upon a
corporation of this kind as a condition upon which it will permit
the corporation to do business within its borders, the state is not
thereafter and perpetually confined to those conditions which it
made at the time that a foreign corporation may have availed itself
of the right given by the state, but it may alter them at its
pleasure. In all such cases, there can be no contract springing
from a compliance with the terms of the act, and no irrepealable
law, because they are what it termed "governmental subjects," and
hence within the category which permits the legislature of a state
to legislate upon those subjects from time to time, as the public
interests may seem to it to require.
As these statutes involve public interests, legislation
regarding them are necessarily public laws, and as stated in
Newton v. Commissioners, 100 U. S. 548,
100 U. S.
559:
"Every succeeding legislature possesses the same jurisdiction
and power with respect to them as its predecessors. The latter have
the same power of repeal and modification which the former had of
enactment, neither more nor less. All occupy in this respect a
footing of perfect equality. This must necessarily be so in the
nature of things. It is vital to the public welfare that each one
should be able at all times to do whatever the varying
circumstances and present exigencies touching the subject involved
may require. A different result would be fraught with evil. "
Page 172 U. S. 622
The same principle is found in the following cases:
Fertilizing Company v. Hyde Park, 97 U. S.
659;
Butchers' Union Company v. Crescent City,
111 U. S. 746;
Boyd v. Alabama, 94 U. S. 645;
Douglas v. Kentucky, 168 U. S. 488.
When the Legislature of Tennessee therefore permitted the
company to do business within its state on appointing an agent
therein upon whom process might be served, and when, in pursuance
of such provisions, the company entered the state and appointed the
agent, no contract was thereby created which would prevent the
state from thereafter passing another statute in regard to service
of process, and making such statute applicable to a company already
doing business in the state. In other words, no contract was
created by the fact that the company availed itself of the
permission to do business within the state under the provisions of
the act of 1875.
Upon the case as presented in this record, we are of opinion
that the service upon the person in question was a good service in
behalf of the corporation. The judgment of the Supreme Court of
Tennessee is therefore
Affirmed.
MR. JUSTICE HARLAN did not sit in, and took no part in the
decision of, this case.
*
"SEC. 3. Be it further enacted that process may be served upon
any agent of said corporation found within the county where the
suit is brought, no matter what character of agent such person may
be, and in the absence of such an agent, it shall be sufficient to
serve the process upon any person, if found within the county where
the suit is brought, who represented the corporation at the time
the transaction out of which the suit arises took place, or if the
agency through which the transaction was had be itself a
corporation, then upon any agent of that corporation upon whom
process might have been served if it were the defendant. The
officer serving the process shall state the facts, upon whom
issued, etc., in his return, and service of process so made shall
be as effectual as if a corporation of this state were sued, and
the process had been served as required by law; but in order that
defendant corporation may also have effectual notice, it shall be
the duty of the clerk to immediately mail a copy of the process to
the home office of the corporation by registered letter, the
postage and fees for which shall be taxed as other costs. The clerk
shall file with the papers in the cause a certificate of the fact
of such mailing, and make a minute thereof upon the docket, and no
judgment shall be taken in the case until thirty (30) days after
the date of such mailing."
"SEC. 4.
Be it further enacted that it shall be the
duty of the plaintiff to lodge at the home office of the company,
with any person found there, a written notice from him or his
attorney, stating that such suit has been brought, accompanied by a
copy of the process and the return of the officer thereon, of which
fact affidavit shall be made by the person lodging the same,
stating the facts and with whom the notice was lodged, or else the
plaintiff or his attorney shall make an affidavit that he has been
prevented from serving such notice by circumstances which should
reasonably excuse giving it, which circumstances the affidavit of
the plaintiff or his attorney shall particularly state, and no
judgment shall be taken until one or the other of these affidavits
shall be filed and the court be satisfied that the notice has been
given the defendant, or that the excuse for not doing so be
sufficient."