Case ID: ohio-np-ns_19/html/0492-01.html
Source: Caselaw Access Project
Author: {"author": "Snediker, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SERVICE ON A CORPORATION)™ ANOTHER. STATE.
    Common Pleas Court .of Montgomery County.
    Robert R. Dickey v. The Dayton Globe Iron Works Co.
    
    Decided, November 13, 1915.
    
      Service of Summons — Foreign Corporation Incorporated in Ohio Served with Summons in Another State — “Doing Business” and “Transacting Business” Distingiushed — Ineffectual Service on a Corporation Officer Transacting Business in Another State.
    
    1. Where an issue is made as to the validity of a judgment set forth in an intervening petition, the court will scan the transcript showing the rendition of the judgment and if a vital defect appears the intervening petition will be dismissed.
    2. Failure of the record to show that the defendant was doing business in the state of New York at the time service was had upon its vice-president within that state, is a defect requiring such action.
    3. The mere transaction of business by a corporation through one of its officers in another state does not constitute doing business in that state within the meaning of the statute relating to service of summons, and service had upon such officer under such conditions is defective and renders invalid proceedings based.on such service.
    
      Lee Warren James, for intervening petitioner.
    
      Benj. F. McCann, contra.
    
      
       Affirmed by the Court of Appeals February 6, 1917.
    
   Snediker, J.

In this case an intervening petition bas been filed by tbe Malone Light & Power Company. An issue having been made as to the validity of the judgment set forth in the intervening petition and upon which this intervening action is brought, our first duty is to scan the certified- transcript of the record of the case (including the judgment) attached to the intervening petition and offered in evidence. It appears therefrom that the recitations of the petition in which the judgment in question was rendered were “that at all times hereinafter mentioned and for a long time prior thereto the defendant was and still is a foreign corporation, duly incorporated under the laws of the state of Ohio, having its office and transacting business at Dayton in said state of Ohio.” Further, that a contract was entered into by plaintiff with the defendant company on April 26th, 1905, whereby the defendant contracted to make and deliver to the plaintiff at Malone, New York, for installment in its plant at that place, a pair of 25-ineh American turbine water .wheels, with equipment, under certain specifications; that defendant failed to carry out its contract as to development of horse power, etc., resulting in $13,500 damages to the plaintiff; that after plaintiff had tried out and used the wheels for a long period — two and a half years — defendant removed the wheels and installed others in their place, which were deficient in value, efficiency and consumption of water, to the damage of the plaintiff in the sum of $4,000. That the plaintiff, acting under the contract, paid transportation, labor and expense in the installation and conveyance of the wheel $793.61, which was useless and loss to the plaintiff, on which loss $490.73 was paid by the defendant, leaving clue a balance of $312.88; and the plaintiff prays judgment in all for $17,812.83..

The summons in the case appears from the record to have been served upon the defendant, the Dayton Globe Iron Works Company, by delivering and leaving with Clarence Folsom, vice-president of said defendant, personally, a true copy thereof, at Malone, New York, on January 7th, 1909.

In its finding of fact the court finds that, as alleged in the petition, “on the 26th day of April, 1915, and for a long time prior thereto, the defendant was and still is a foreign corporation, duly incorporated under the laws of the state of Ohio and having its office and transacting business at Dayton in said state of Ohio,” and after making, in defendant’s absence, further findings as to all of the facts alleged by the plaintiff in his petition, renders judgment in the sum of $17,812.88, as prayed for by the plaintiff.

It is apparent from the reading of this record that nowhere does it affirmatively appear that the defendant, the Globe Iron Works Company, was doing business in the state of New York, unless by a great stretch of the imagination that inference should be drawn from the allegations of the petition which recite that the contract was entered into for the delivery and installation at Malone, New York, of the certain water-wheels about which, this controversy originally arose. On the contrary, both the petition and the finding- of the court show affirmatively that the defendant was and still is a foreign corporation, duly incorporated under the laws of the state of Ohio, having its office and transacting business at Dayton, in said state of Ohio. This being true, how stands the case with respect to the rights of the plaintiff to recover on its judgment in this state?

Black, in his work on Judgments, Volume II, Section 910, says:

“It is a well-established rule of interstate or international law, that the courts of another state will not receive as evidence of a foreign judgment, in a suit brought upon it, any record thereof which does not show on its face that the defendant, if a foreign corporation, wa% doing business in that state. This is a substantive, jurisdictional averment that must affirmatively appear and not be left to any inference from the bare return of the officer that he has served an agent of the company.”

In the case of St. Clair v. Cox, in 160 U. S. Reports, Justice Field, in passing upon this same question, uses the following language:

“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 the finding of the court — that the corporation was engaged in business in the state.”

Also, see Hazeltine v. Miss. Valley Fire Ins. Co., 55 Fed. Rep., page 743.

In the ease of Henning v. Planters Ins. Co., 28 Fed. Rep., page 440, the second section of the syllabus reads:

“Nor can parol or other proof of the fact be received in aid of the defective record if the averment” (the averment of doing business in the state) “does not appear therein.”

In the body of this case the court quotes Justice Cooley in the ease of Montgomery v. Merrill, 36 Mich., 97, as follows:

“We think also that the court was right in rejecting the evidence offered by the plaintiff on the trial to show that Sidney Ketchum was in fact the last president of the bank. Jurisdictional facts can not rest in parol, to be proved in one ease and perhaps disproved in another. The record must be complete in itself.”

From the foregoing it is apparent that the failure of this record to show the fact that the Globe Iron Works was at the time the service of the summons was made upon Folsom doing business in the state of New York, is such a vital defect that this court is not required to render judgment here on the judgment obtained there, nor is it either required or entitled to consider any oral proof offered to make up this defect.

Irrespective of the foregoing, after a careful consideration of all the testimony in the case, we are unable to determine that at the time the Globe Iron Works was in fact “doing business” at Malone, giving that term its proper legal construction; that it was transacting business at Malone, New York, there is no doubt; but as between doing business and transacting business, there is a wide difference. The defendant corporation was not established in any way in New York, in such manner that it might be said to have continuing interests there, or to have put itself in the position of conducting a branch industry or enterprise. The mere fact that Mr. Folsom was there did not take the corporation there. The corporation was still, as alleged in the petition, located and doing business at Dayton, Ohio.

Our finding is against the plaintiff and for the defendant.