1. A state may provide, among the conditions upon which a
foreign corporation may be admitted to do local business, that, if
the corporation withdraw from the state and fail to maintain a
local agency for receiving service of process, service may be made
on a designated state official. P.
289 U. S.
364.
2. Failure to provide further for notifying the absent
corporation of such substituted service does not make the statute
obnoxious to due process, in the case of a corporation which
entered the state by complying with the statute; since, by so
doing, it accepted the statutory terms, and since, having
withdrawn, it could have assured itself of notice by designating a
new agent or otherwise. P.
289 U. S. 365.
3. The question whether, under a state statute providing for
service on the Secretary of State, service may be made on the
Assistant Secretary of State, is not a federal question. P.
289 U. S.
366.
4. State statutes providing that, as to domestic corporations
having no local office, and as to foreign insurance companies,
substituted service on the Secretary of State shall be valid only
if he sends notice to the corporation so served, but making no
provision for such further notice to other foreign corporations, do
not deny to the latter the equal protection of the laws. P.
289 U. S.
366.
169 Wash. 688, 15 P.2d 660, affirmed.
Appeal from a judgment refusing a writ of prohibition to prevent
further prosecution of an action begun by substituted service.
Page 289 U. S. 362
MR. JUSTICE ROBERTS delivered the opinion of the Court.
This is an appeal from a final decree of the Supreme Court of
the State of Washington refusing a writ of prohibition to prevent
the further prosecution of an action pending in the Superior Court
of Spokane County.
Bond & Goodwin & Tucker, a Delaware corporation,
qualified in 1926 to do business in the State of Washington
pursuant to the applicable statute.
*
One Duncan Shaw, of Seattle, was appointed resident agent for the
acceptance of service of process, as the law required. In 1929, the
company withdrew from the state, ceased to transact business there,
and filed formal notice of withdrawal with the Secretary of State.
The corporation was dissolved in accordance with the laws of
Delaware, but the appointment of Shaw as statutory agent was never
revoked. In 1929, he removed to California. In 1932, one Monroe
commenced a civil action in the Superior Court, naming Bond &
Goodwin & Tucker as one of the defendants, and instructed the
sheriff to serve the summons and complaint upon the Secretary of
State. The return and proof of service show that this was done by
handing the papers to an assistant secretary. Neither the summons
and complaint nor any copy of them, nor any notice touching the
same, were forwarded to Bond & Goodwin & Tucker by the
Secretary of State or anyone else. No other form of service was
made.
Page 289 U. S. 363
The appellant appeared specially and moved to quash the service.
The motion was overruled. Thereupon, application was made to the
supreme court of the state for a writ of prohibition. The present
appeal is from the judgment refusing the writ.
The appellant urges that the statute denies the due process and
equal protection guaranteed by the Fourteenth Amendment. The first
contention rests upon the fact that substituted service upon the
Secretary of State is validated without any requirement that he
shall give the defendant notice of the pendency of the action; the
second is bottomed upon the circumstance that a different procedure
requiring the Secretary of State to send notice to defendant's is
prescribed as respects suits against domestic corporations having
no office within the state and foreign insurance companies.
The statute requires a foreign corporation to appoint and
register a resident agent empowered to accept service of process in
any action or suit pertaining to the property, business, or
transactions of such corporation within the state. The agent may be
changed by filing with the Secretary of State a new appointment.
The portion of the Act which gives rise to the present controversy
is:
". . . in the event such foreign corporation shall withdraw from
this state and cease to transact business therein, it shall
continue to keep and maintain such agent within this state upon
whom service of process, pleadings, and papers may be made until
the statute of limitations shall have run against anyone bringing
an action against said corporation which accrued prior to its
withdrawal from this state. In case said corporation shall revoke
the authority of its designated agent after its withdrawal from
this state and prior to the time when the statutes of limitations
would have run against causes of action accruing against it, then,
in that event, service of process, pleadings, and papers in such
actions may be made upon the Secretary
Page 289 U. S. 364
of State of the State of Washington, and the same shall be held
as due and sufficient service upon such corporation."
We are told that, when the appellant appointed Shaw and
registered him as its agent to accept service, it had complied with
all conditions requisite to its lawful transaction of business
within the state; that the provision for another sort of
substituted service in the event of Shaw's removal from the state,
or the revocation of his appointment without registration of
another agent, is permissible only if it requires notice to the
defendant; that, by qualifying as a foreign corporation, appellant
did not consent to the arbitrary and unconstitutional condition
that it might be cast in judgment without notice of suit. We think,
however, that the position is unsound.
The state need not have admitted the corporation to do business
within its borders.
Bank of Augusta v.
Earle, 13 Pet. 519;
Lafayette
Insurance Co. v. French, 18 How. 404,
59 U. S. 407.
Admission might be conditioned upon the requirement of substituted
service upon a person to be designated either by the corporation,
St. Clair v. Cox, 106 U. S. 350,
106 U. S. 356,
or by the state itself,
Mutual Reserve Assn. v. Phelps,
190 U. S. 147,
190 U. S. 158,
or might, as here, be upon the terms that, if the corporation had
failed to appoint or maintain an agent, service should be made upon
a state officer.
American Railway Express Co. v. Royster
Co., 273 U. S. 274,
273 U. S. 280. The
provision that the liability thus to be served should continue
after withdrawal from the state afforded a lawful and
constitutional protection of persons who had there transacted
business with the appellant.
American Railway Express Co. v.
Kentucky, 273 U. S. 269,
273 U. S. 274.
It has repeatedly been said that qualification of a foreign
corporation in accordance with the statutes permitting its entry
into the state constitutes an assent on its
Page 289 U. S. 365
part to all the reasonable conditions imposed.
Lafayette
Insurance Co. v. French, supra, 59 U. S. 408;
St. Clair v. Cox, supra, 106 U. S. 356;
Connecticut Mutual Life Insurance Co. v. Spratley,
172 U. S. 602,
172 U. S. 614;
Old Wayne Mut. Life Assn. v. McDonough, 204 U. S.
8,
204 U. S. 22;
Commercial Mutual Accident Co. v. Davis, 213 U.
S. 245,
213 U. S. 254.
It is true that the corporation's entry may not be conditioned upon
surrender of constitutional rights, as was attempted in the cases
on which the appellant relies.
Terral v. Burke Construction
Co., 257 U. S. 529;
Fidelity & Deposit Co. v. Tafoya, 270 U.
S. 426;
Frost Trucking Co. v. Railroad
Commission, 271 U. S. 583;
Hanover Fire Insurance Co. v. Harding, 272 U.
S. 494. And, for this reason, a state may not exact
arbitrary and unreasonable terms respecting suits against foreign
corporations as the price of admission.
Power Mfg. Co. v.
Saunders, 274 U. S. 490. But
the statute here challenged has no such operation. It goes no
further than to require that the corporation may be made to answer
just claims asserted against it according to law. By appointing a
new agent when Shaw ceased to be a resident of the state, the
appellant could have assured itself of notice of any action. The
statute informed the company that, if it elected not to appoint a
successor to Shaw, the Secretary of State would by law become its
agent for the purpose of service. The burden lay upon the appellant
to make such arrangement for notice as was thought desirable. There
is no denial of due process in the omission to require the
corporation's agent to give it such notice.
The power of the state altogether to exclude the corporation,
and the consequent ability to condition its entrance into the
state, distinguishes this case from those involving substituted
service upon individuals,
Flexner v. Farson, 248 U.
S. 289;
Wuchter v. Pizzutti, 276 U. S.
13, whose entrance into a state may render them amenable
to action there only if the statute providing for substituted
Page 289 U. S. 366
service incorporates reasonable provision for giving the
defendant notice of the initiation of litigation.
Hess v.
Pawloski, 274 U. S. 352. The
fact that appellant qualified to do business in the state and
complied with the registration statute also distinguishes cases of
attempted service on a state official pursuant to a statute with
which the defendant corporation had never complied, and where, at
the time of suit, it had removed from the state and was transacting
no business there.
Old Wayne Mutual Life Assn. v. McDonough,
supra; Consolidated Flour Mills Co. v. Muegge, 127 Okl. 295,
260 P. 745; 278 U.S. 559.
Appellant suggests that it was denied due process because the
Act demands service upon the Secretary of State, whereas the
summons and complaint were handed to an Assistant Secretary. The
state court has held the service sufficient since the Assistant
Secretary in contemplation of law was the Secretary. This
construction of the statute raises no federal question.
Complaint is made because other legislation validates
substituted service on domestic corporations having no office in
Washington, and on foreign insurance companies registered to do
business therein, only if the Secretary of State sends notice to
the defendant. It is said that a failure to make similar provision
with respect to other foreign corporations deprives the appellant
of the equal protection of the laws. The contention is without
merit. The legislature was entitled to classify corporations in
this respect, and a mere difference in the method of prescribing
how substituted service should be accomplished works no unjust or
unequal treatment of the appellant.
Compare National Union Fire
Ins. Co. v. Wanberg, 260 U. S. 71.
The judgment is
Affirmed.
* Section 3854, Remington's Compiled Statutes 1922.