Title: Trailer Exp., Inc. v. Gammill

State: mississippi

Issuer: Mississippi Supreme Court

Document:

403 So. 2d 1292 (1981) TRAILER EXPRESS, INC. and Jack M. Clements v. Nellie M. GAMMILL. No. 52168. Supreme Court of Mississippi. September 30, 1981. Cary E. Bufkin, Shell, Buford, Bufkin, Callicutt & Perry, Jackson, for appellants. William H. Liston, Liston, Crull & Gibson, Winona, for appellee. EN BANC: Petition of Appellee, Nellie M. Gammill, for rehearing of the cause is sustained. The original opinion of the Court is hereby withdrawn and substituted therefor is the following opinion: This case originated in the Circuit Court of Montgomery County. Appellee, Nellie M. Gammill, filed her suit against appellant, Trailer Express, Inc., requesting damages for personal injuries growing out of a motor vehicle collision that occurred on August 18, 1978. The declaration was filed on September 14, 1979, and summons was issued under Section 13-3-63, Mississippi Code Annotated (1972). This section is commonly known as "Non-Resident Motorist Statute" and *1293 summons was properly served on the Secretary of State of Mississippi, as the statutory resident agent for non-resident motorists using the highways of this state. The summons was served on the Secretary of State on September 20, 1979, and was returnable to the next term of Circuit Court of Montgomery County that convened on the second Monday (the 8th) of October, 1979. The duly authorized agent of the appellant received the summons on September 25, 1979. No appearance was made in the cause by appellant and on October 19, 1979, toward the end of the twelve day term of court, appellee filed her motion for default judgment and for a writ of inquiry. This matter was heard on October 19, 1979, resulting in the circuit judge entering a final judgment in favor of appellee against appellant in the sum of $126,034.41. On November 19, 1979, appellant, through its then attorney, filed a Motion to Quash Process and Set Aside the Default Judgment, with required affidavit. On the same date appellant filed a motion for an emergency hearing in vacation on its motion so that it would have sufficient time to appeal in the event of an adverse ruling before expiration of the appeal date from the original default judgment. A hearing was had before the lower court on November 23, 1979, on appellant's motion. During the lower court hearing the attorneys for appellee and appellant made certain stipulations, some of which shall be hereinafter discussed in the decision of this cause. Appellant's attorney had witnesses present to testify on behalf of its motion and also expressed a desire to call appellee as an adverse witness for the purpose of eliciting from her the matters that occurred at the time of the writ of inquiry and default judgment. The lower court was of the opinion that the objection to such testimony should be sustained; however, he allowed appellant to question appellee for the purpose of its appellate record. After the hearing on appellant's motion, the court entered its order denying the motion in its entirety. On its appeal, appellant assigns a number of alleged errors. In our opinion two appeal points dispose of the case. These are: Appellant contends that as it had appointed a resident agent in the records of the Mississippi Public Service Commission pursuant to the above federal requirement, service on this agent was the exclusive method of service of summons on the non-resident appellant corporation and service of summons on the Secretary of State under Section 13-3-63 was void. The Federal Motor Carrier Act § 221(c) provides as follows: It is our opinion that appellee had her choice as to the manner of serving appellant. Section 13-3-63 was enacted by the Legislature under the police power of this state, providing that by accepting the rights and privileges of using the highways of this *1294 state, a non-resident appoints the Secretary of State of Mississippi as his "true and lawful attorney upon whom may be served all lawful process in any action or proceeding against him... ." (Emphasis added). The primary question is whether or not the Federal Motor Carrier Act and particularly the above section 221(c) void the police power application of Section 13-3-63. We do not find where an appellate court of last resort has passed on this precise question, but we do find identical questions in state lower courts and pronouncements of law in other appellate courts, including the Supreme Court of the United States, which indicate that the federal statute does not preempt a statute passed under Mississippi's police power regarding the use of its highways. Also federal and state courts have held that a federal statute does not preempt and void a state statute and prevent the state from exercising its police power unless the Congress in passing its act clearly manifested a mandate to do so. Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S. Ct. 207, 71 L. Ed. 432 (1942); Allen-Bradley Local v. Board, 315 U.S. 740, 62 S. Ct. 820, 86 L. Ed. 1154 (1926); Maurer v. Hamilton, 309 U.S. 598, 60 S. Ct. 726, 84 L. Ed. 969 (1939); Southwestern Greyhound Lines v. Railroad Comm'n of Texas, 128 Tex. 560, 99 S.W.2d 263 (1936); Malone v. White Motor Corp., 435 U.S. 497, 98 S. Ct. 1185, 55 L. Ed. 2d 443, on remand 8th Cir., 599 F.2d 283, aff'd 444 U.S. 911, 100 S. Ct. 223, 62 L. Ed. 2d 166 (1978); Ray v. Atlantic Richfield Co., 435 U.S. 151, 98 S. Ct. 988, 55 L. Ed. 2d 179 (1978); Katharine Gibbs School (Inc.) v. F.T.C., 612 F.2d 658 (2d Cir.1979); Pharmaceutical Soc. of State of New York, Inc. v. Lefkowitz, 586 F.2d 953 (2d Cir.1978); Conference of Federal Sav. & Loan Ass'ns v. Stein, 604 F.2d 1256 (9th Cir.1979); Amalgamated Transit Union Div. 819 v. Byrne, 568 F.2d 1025 (3rd Cir.1977); Northern States Power Co. v. State of Minnesota, 447 F.2d 1143 (8th Cir.1971); and Gerut v. Poe, 11 F.R.D. 281 (N.D.Ill., 1951). In Gerut v. Poe, 11 F.R.D. 281 (N.D.Ill., 1951), the Court in discussing the preemption of a state process statute by federal statutes said the following: In a well-reasoned opinion, a New York lower court in Kuris v. Pepper Poultry Co., Inc., 174 Miss 801, 21 N.Y.S.2d 791 (Sup.Ct. 1940), stated the following: Another lower New York Court in Olson v. Midstates Freight Lines, Inc., 12 Misc.2d 897, 173 N.Y.S.2d 711 (Sup.Ct. 1958), in holding that the New York state non-resident motorist statute, similar to that of Mississippi, was not preempted by the federal Motor Carrier Act under section 221(c) said: The majority of this Court agrees that the reasoning in the above set out cases is accurate and should be followed. As stated, the intent and purpose of the Federal Motor Carrier Act was to regulate the commercial, financial and business aspects of interstate commerce as it relates to *1298 highway transportation. Congress properly saw fit to require that a resident agent be appointed in the records of the duly authorized regulatory agency of each state in which the carrier conducted business. Had Congress intended for the registered agent requirement to have preempted the police power of the state and voided the process statute on non-residents, they clearly would have set this intention out. We have seen that Section 221(c) in requiring registered agents to be designated with each state regulatory agency, clearly stated that process may be served on that agent in any proceeding at law or equity brought against such carrier. It does not mandate exclusive process on that agent. Had Congress intended that to be the case, it could and would have said so. Furthermore, the section ended by saying, "in the event such carrier fails to file such designation, service may be made upon any agent of such motor carrier within such state." In our opinion, this clearly refers to a real "agent" in the nature of an employee that may be found in the state. It also refers to the statutory designated agent, that is, the Secretary of State, under Section 13-3-63. The Legislature of this state made the Secretary of State an agent for all process in any case involving the operation of a motor vehicle in this state. This designated agent easily would be the agent referred to in the above quote from Section 221. We are, therefore, forced to recognize first the clear principle of law that where Congress enacts statutes on a particular subject, it does not preempt and void the police power of the individual states, unless that is clearly mandated and required within the federal act. We do not have such a mandate in the present section. The federal act only stated that process "may" be served on the agent designated with the Public Service Commission. The operation of a vehicle on the highways of the states is a very small part of the Federal Motor Carrier Act, and as hereinabove stated in the above quoted cases, the purpose of Congress in enacting the Motor Carrier Act was to regulate the commercial aspect of vehicles operating in interstate commerce. We, therefore, hold that the service of process under section 13-3-63 was valid. The next question to be considered is whether or not this Court may and should reverse and remand the cause for another hearing on the question of damages only. The motion filed by appellant and considered by the court from which the appeal was taken, did not contend that the default judgment was a result of fraud, undue influence, or any other reason that would render the default judgment void as to liability. We have held in many cases that the power of a court to set aside a default judgment ends with the term of court within which it is rendered, unless the facts and references thereto prove that the lower court did not have jurisdiction to hear the writ of inquiry and enter the default judgment. There is no contention that appellant did not receive the summons through Mississippi's Secretary of State in due course and did not make any appearance in the cause, although summons was issued, served and returned properly. We hold, therefore, that as to the rendering of the default judgment by the lower court on October 19, 1979, the judgment became final on the issue of liability when the term ended. See Martin v. Armstrong, 350 So. 2d 1353 (Miss. 1977); Alexander v. Killebrew, 321 So. 2d 488 (Miss. 1975); Western Chain Co. v. Brownlee, 317 So. 2d 418 (Miss. 1975); Overstreet v. Liberty Mutual Ins. Co., 263 So. 2d 528 (Miss. 1972); Walker George, Jr., etc. v. Standard Oil Co. of Ky., 239 Miss. 712, 124 So. 2d 858 (1960); and Hayes Produce Co. v. Taylor, 213 Miss. 217, 56 So. 2d 503 (1952). Appellant contends that the amount of the default judgment was against the evidence and that the lower court did not have sufficient evidence on which to base the amount of its verdict. Although we cannot take jurisdiction of the basic part of the case, that is, the liability question, because of the reasons stated above, we find that both precedent and the inherent power of the Court require that we review the amount of the award, even though under a *1299 default judgment. There was no record made of the evidence presented to the Court on the writ of inquiry. During the hearing on appellant's Motion to Quash Process and Set Aside Default Judgment, it offered evidence as to what evidence was presented to the lower court on the question of damages. In its motion appellant requested a review of the amount. In its proffer of evidence, appellant, as heretofore stated, questioned appellee under oath. She was a bit hazy as to everything that occurred during the presentation of evidence on the writ of inquiry. Only she and her husband testified. She stated that after the collision she was "shook up." She was taken from the scene by automobile. Although she was transported to a hospital where x-rays were taken, she was not confined to the hospital. She did not know the amount of her medical bills, stating that she had "no idea at this point." At the time of the collision, appellee was on sick leave from her position with the telephone company. She testified that she consulted a physician for injuries received in the collision some four to eight times. No medical bills or medical reports were introduced and no medical testimony of any kind received except that from appellee and her husband. It was stipulated that the entire amount of the award constituted compensatory damages, and that there were no punitive damages allowed. As stated, the proceedings at the writ of inquiry were not transcribed by the court reporter, and we therefore do not have the benefit of that helpful recorded information. The evidence presented at the hearing on appellant's motion is all that is before us, and it is undisputed. In the case of Ishee v. Dukes Ford Co., 380 So. 2d 760 (Miss. 1980), we had the same issue before us. Although the opinion did not state that the action of the appellant (defendant below) was subsequent to the term of court during which the default judgment was entered, a study of the record reveals that all action taken by the defaulting defendant was after the term ended. We reversed and remanded for a new trial on damages only stating that the court did not use the proper method for determining the damages sustained by the plaintiff. Under the undisputed evidence in the record before us, we are forced to hold that we do not find sufficient evidence to sustain the amount of the lower court's award on damages. On the contrary, the record before us reveals that the award was excessive. We, therefore, reverse the cause and remand to the lower court for another hearing on the question of damages only. REVERSED AND REMANDED. PATTERSON, C.J., and BROOM, LEE, BOWLING and HAWKINS, JJ., concur. SMITH and ROBERTSON, P. JJ., and SUGG and WALKER, JJ., dissent. SMITH, Presiding Justice, dissenting: With deference, I respectfully dissent from the conclusion of the majority that the trial court acquired personal jurisdiction of appellant by service of process on the Mississippi Secretary of State under the long arm nonresident motorist statute. The suit which resulted in the default judgment in this case was brought by Nellie M. Gammill against Trailer Express and its driver, Jack Clements. However, no process was ever had upon Jack Clements. Trailer Express is an Indiana corporation, duly licensed by Mississippi Public Service Commission under the Mississippi Motor Carrier Regulatory Act of 1938, as amended, and is engaged as a common carrier in interstate commerce. It had duly qualified under the Federal Motor Carrier Act of 1935, 49 U.S.C.A. section 321(c) (1963), now 49 U.S.C.A. section 10330 (1981), and in compliance with that Act, had appointed and was maintaining a resident agent for the service of process in Mississippi. No effort was made by plaintiff to obtain personal jurisdiction of Trailer Express by service on its resident agent. Instead, plaintiff proceeded under Mississippi Code Annotated section 13-3-63 (Supp. 1980), sometimes referred to as the long arm non-resident *1300 motorist statute, and process was attempted to be served upon Trailer Express under that statute through service upon the secretary of state under the legal fiction that he was an agent of Trailer Express. Service on the secretary of state was had on September 20, 1979. On the 29th day after service, the last day of the term, Trailer Express not having appeared, judgment by default was taken against it by plaintiff. A hearing was then conducted by the court, without a jury, upon a writ of inquiry on October 19, 1979 and judgment was entered in favor of appellee against appellant for $126,034.00. Following adjournment of the term, appellant having learned of this, filed its motion to quash the process and set aside the default judgment, supported by affidavit that it had a meritorious defense. Also made a part of its record was its permit issued by the Mississippi Public Service Commission and designation of an agent for service of process in Mississippi. On November 23, 1979 the trial judge heard the motion. No transcript had been made or record kept of the evidence adduced at the hearing upon the writ of inquiry which resulted in the default judgment against appellant for $126,034.00. The trial court proceeded to hear evidence on appellant's motion, over objection of appellee. Appellee stipulated, however, that the affidavit filed by appellant in support of its motion was sufficient to establish necessary proof of a meritorious defense. Appellant called as an adverse witness the plaintiff, Nellie M. Gammill. This witness testified that no doctor had testified at the hearing on the writ of inquiry as to any injuries that she had received in the incident which gave rise to the suit, that no medical bills had been offered, that she was not hospitalized as the result and that she had stated that she was "okay" and had only been "shook up." She said she had no medical records with her and had no recollection of any hospital bills although she said she had seen a physician between four and eight times. At the conclusion of the hearing, the motion to quash process was denied and the motion to set aside the default judgment was overruled. The issue in this case concerning the effectiveness of service of process under the Mississippi nonresident motorist statute [Mississippi Code Annotated section 13-3-63 (Supp. 1980)] rather than through personal service on appellant's lawfully designated resident agent is clearly defined. Trailer Express, an interstate common carrier engaged in interstate commerce, asserts that in qualifying in Mississippi as mandated by the Motor Carrier Regulatory Act of 1938 [Mississippi Code Annotated section 77-7-1 et seq. (1972)], and the Federal Motor Carrier Act of 1935, 49 U.S.C.A. section 321(c) (1963), now 49 U.S.C.A. section 10330 (1981) and by appointing a resident agent for process as required by the Federal statute, it assumed quasi-resident status for purposes of service of process, was not absent from the State, and was not amenable to service under the general nonresident motorist statute. The Federal Motor Carrier Act of 1935, 49 U.S.C.A. section 321 (1963), mandated: "In the event" the carrier "fails to make such designation" the Act provides that process may be served otherwise. There is no provision in the statute for service of process other than in cases where the carrier has failed to appoint such an agent. *1301 In the above quoted version of the Federal Act, the words "in the event" (of the failure to designate a resident agent) express the single condition or contingency in which process may be served otherwise than upon the designated resident agent. The words "in the event of" are equivalent to "in the case of", or "in case of" and imply a condition and express a contingency. Tramell v. Tramell, 162 Tenn. 1, 32 S.W.2d 1025 (1930); Barmore v. Darragh, 231 S.W. 472 (Tex.Civ.App. 1921); Fischer v. Fischer, 75 N.J. Eq. 74, 71 A. 488 (1908); Roberts's App., 59 Pa. 70, 98 Am.D. 312 (1868); Hill v. Hill, 5 G. & J. 87 (Md. 1833). The amended Act, 49 U.S.C.A. section 10330 (1981), provides: Like its predecessor, 49 U.S.C.A. section 321 (1963), supra, the present Act defines the only circumstance or condition when process may be served otherwise than upon the resident agent. It provides that: "If" (a designation is not made) "service may be made on any agent of the carrier or broker within that State." In 42 C.J.S. If (1944), at 377, the meaning of the word "if" (used in the Act as presently written) is discussed: Other jurisdictions have similarly defined the word "if". In Bagnall v. Bagnall, 148 Tex. 423, 225 S.W.2d 401 (1949) the Supreme Court of Texas noted: The Court of Appeals of Kentucky in Points v. Points, 312 Ky. 348, 227 S.W.2d 913 (1950), enunciated the following: It is clear that 49 U.S.C.A. section 10330 (1981) does not change the meaning of 49 U.S.C.A. section 321 (1963), in that it requires service under the Federal Act unless no agent is designated. The general nonresident motorist statute, Mississippi Code Annotated section 13-3-63 (Supp. 1980), states broadly that any nonresident or its agent, operating a motor vehicle on Mississippi highways and streets, impliedly appoints the Mississippi Secretary of State as its agent for service of process. The obvious objective of the Mississippi long arm nonresident motorist statute is to provide a means for obtaining service upon nonresidents not otherwise reachable by the *1302 process of Mississippi courts. It provides the means of reaching the nonresident motorist who enters the State, incurs a justiciable liability, and departs the jurisdiction. At the time of the incident out of which appellee's claim arose, appellant was present in this state, and has been present continuously since, by duly appointed resident agent. Notwithstanding the general wording of the Mississippi nonresident motorist statute, the designation of a resident agent by an interstate common carrier under the Federal Motor Carrier Act, supra, in Mississippi, upon whom personal service may be obtained, must be considered as removing it from the purview of the Mississippi statute. Federal law providing for service on interstate common carriers via registered resident agent must be considered preemptive. Article I, Section 8 of the United States Constitution grants to the sovereign the right to regulate commerce among the several states. The exclusiveness of Federal law in the field of interstate commerce is reflected by Article 7, Section 186 of the Mississippi Constitution of 1890, which vests in the state the power to regulate intrastate commerce. Appellant is qualified to do business as an interstate common carrier by virtue of the Interstate Commerce Act, the Federal Motor Carrier Act of 1935, and the Mississippi Motor Carrier Regulatory Act of 1938. Under the Federal Act, the appellant must designate a resident agent for service of process in each state through which it operates. The Mississippi Motor Carrier Regulatory Act of 1938 [Mississippi Code Annotated section 77-7-1 et seq. (1972)], while silent concerning appointment of an agent for service of process, is modeled after the Federal Motor Carrier Act and must, therefore, be construed as complementary and in consistency therewith. See Dixie Greyhound Lines v. Public Service Commission, 190 Miss. 704, 200 So. 579, 1 So. 2d 489 (1941). Strict compliance with the Mississippi Act is mandatory on motor carriers [Mississippi Code Annotated section 77-7-11 (1972)]. The appellant, in complying with these statutes, has designated a resident agent for service of process in Mississippi. Although there is a dearth of case law from state courts of last resort concerning service of process on an interstate carrier under a state nonresident motorist statute, in defiance of service on the agent designated under the Federal Act, the Supreme Court of our sister State of Georgia seems to have made a cogent approach to a closely analogous problem. In Georgia, motor carriers are subject to the following code provision: The Georgia Supreme Court has interpreted this section as exclusive for purposes of service of process, where an appointment has been made, as appears in the following excerpt from Southeastern Truck Lines, Inc. v. Rann, 214 Ga. 813, 815, 108 S.E.2d 561, 563 (1959): See also 61 C.J.S. Motor Vehicles § 502(2), p. 274 (1970). The Georgia Supreme Court solution of a problem closely similar to that under consideration here was reasonable and sound and gave meaning to the provision in the Georgia statute requiring service on the resident agent, if one has been appointed. The theory of appellee here, appears to be that the provision in the Federal Act that process may be served on an agent other than the designated resident agent "in the event" or "if" no resident agent has been appointed, is utterly meaningless. The plain intendment of the Federal Act, expressed as clearly as the English language can disclose it, is that process from courts having subject matter jurisdiction must be served upon the resident agent (if there is one) in order to give the court having "subject matter" jurisdiction, "personal" jurisdiction of a defendant. The failure of the carrier to appoint a resident agent is the single exception, as is clearly stated in the statute. Therefore, the trial court did not acquire personal jurisdiction of the defendant-appellant and was without jurisdiction to render judgment against it. The motion to quash the attempted service and set aside the default judgment should have been sustained. After all, it would appear that compliance with the Act imposes no hardship in fact it would be cheaper, quicker and more certain. It is noteworthy that, although a very great many citations are listed in the majority opinion as supporting principles about which there is no controversy, no case whatever is cited from a state court of last resort, and certainly none from a Federal Court of Appeals or from the Supreme Court of the United States, touching the point at issue. Apparently no United States District Court Judge has rendered a decision in keeping with the view of the majority as to the proper construction of the Federal Act. However, two cases are cited as supporting the majority opinion. Both are trial court judges' decisions from counties in the State of New York. In one of these the trial judge's opinion is quoted almost in its entirety and comprises a major portion of the majority opinion. The views expressed are those of the trial judge in each of the cited cases and have not been adopted by the Court of Appeals of the State of New York and, so far as we have been able to discover, by the trial judges in other counties of the State of New York. What the New York Court of Appeals, the court of last resort in that state, would hold if confronted with the question is, of course, unknowable. An examination of the quoted trial judge's opinion shows that, while of noteworthy length, in some measure he proceeded on a philosophical basis and does not appear to have attempted a precise construction of the plain language of the Federal *1304 Act. I have read these opinions, on which the majority depends for support of its conclusion, with considerable interest but I find myself unpersuaded, since they are in the face of the expression in the Act itself of a legislative intent, in clear and unambiguous language, to the contrary. Nor is the suggestion valid that the Federal Act does not apply to tort actions arising out of negligence in the operation of a carrier's trucks. There is nothing in the Act to so indicate and several courts have held that the Federal Process Act does apply in such cases. See Sansbury v. Schwartz, 41 F. Supp. 302 (D.C.D.C. 1941); Olson v. Midstates Freight Lines, Inc., 173 N.Y.S.2d 711, 12 Misc.2d 897 (1958). Nor is the Act limited by its own terms or otherwise to cases in which the cause of action arose out of commercial transactions. See Esperti v. Cardinale Trucking Corporation, 263 A.D. 46, 31 N.Y.S.2d 253 (1941). Notwithstanding the above, majority has recognized that an injustice has been done and has remanded the case for trial on the "issue of damages alone." Obviously, this is better than giving no relief to appellant and, although it does not, in my humble opinion, provide complete justice, if the judgment is not to be set aside and the case tried on its merits, (in which event appellee should expect to prevail if the facts warrant it) I concur in the conclusion that the case is one that must be sent back. In City of Starkville v. Thompson, 260 So. 2d 191 (Miss. 1972), in holding that bad motive or actual fraud is unnecessary in order to justify the setting aside of a judgment, this Court quoted from one of its earlier decisions, Gardner v. Price, 199 Miss. 809, 25 So. 2d 459 (1946), as follows: In my view, this case falls within the rule stated. Upon retrial as to damages alone appellant will be afforded an opportunity to show the facts of appellee's alleged injury, and, if it can be shown, to have any award that may result, diminished in the proportion that negligence on her part, if any, may have caused or contributed to the accident. Mississippi Code Annotated section 11-7-15 (1972). This Court in Mississippi Cent. R. Co. v. Smith, 176 Miss. 306, 168 So. 604 (1936), appeal dismissed, 299 U.S. 518, 57 S. Ct. 313, 81 L. Ed. 382 (1936), said: Let justice be done though the heavens fall. ROBERTSON, P.J., and SUGG and WALKER, JJ., join in this dissent.