Case Name: TRAILER EXPRESS, INC. and Jack M. Clements v. Nellie M. GAMMILL
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1981-09-30
Citations: 403 So. 2d 1292
Docket Number: No. 52168
Parties: TRAILER EXPRESS, INC. and Jack M. Clements v. Nellie M. GAMMILL.
Judges: PATTERSON, C. J., and BROOM, LEE, BOWLING and HAWKINS, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 403
Pages: 1292–1304

Head Matter:
TRAILER EXPRESS, INC. and Jack M. Clements v. Nellie M. GAMMILL.
No. 52168.
Supreme Court of Mississippi.
Sept. 30, 1981.
Cary E. Bufkin, Shell, Buford, Bufkin, Callicutt & Perry, Jackson, for appellants.
William H. Liston, Liston, Crull & Gibson, Winona, for appellee.

Opinion:
ON PETITION FOR REHEARING
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 The original opinion of the Court is hereby withdrawn and substituted therefor is the following opinion: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 ease 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 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:
I. Does Section 221(c) of the Interstate Commerce Act [49 USCA § 10330 (1980)] preempt the method of service of process of the nonresident corporation in this case and is thereby the exclusive method of service of process?
II. Does this Court have the authority to reverse and remand for a hearing on damages only? If so, should that be done here?
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 nonresident 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:
(c) Every motor carrier (including any motor carrier operating within the United States in the course of engaging in transportation between places in a foreign country and a place in another foreign country) shall also file with the board of each State in which it operates and with the Interstate Commerce Commission a designation in writing of the name and post office address of a person in such State upon whom process issued by or under the authority of any court having jurisdiction on the subject matter may be served in any proceeding at law or equity brought against such carrier. Such designation may from time to time be changed by like writing similarly filed. In the event such carrier fails to file such designation, service may be made upon any agent of such motor carrier within such state.
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 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.I11., 1951), the Court in discussing the preemption of a state process statute by federal statutes said the following:
It is elementary that every state within its own sphere of action has exclusive rights to provide the method by which its court may obtain jurisdiction over the person or res. The only jurisdiction which Congress has attempted to exercise over this defendant is in regard to matters arising out of and in connection with its interstate transportation as a motor carrier. It is an entirely reasonable and necessary presumption, therefore, that, when Congress enacted the process statute, it only intended to provide means whereby the defendant could be made amenable to process in matters concerning which Congress had assumed jurisdiction under the Federal Constitution.
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:
Plaintiffs urge that by virtue of the commerce clause of the Constitution (Article 1 § 8, cl. 3) Congress is vested with exclusive authority over matters of and pertaining to interstate commerce; that the enactment by Congress of the federal Motor Carrier Act is well within its constitutional power and that the enactment of the service of process provision, section 221, subdivision (c), [§ 321(c), 49 U.S.C.A.] thereof, is fully within the proper sphere of its action and therefore supersedes the state law on that subject (§ 229 Civil Practice Act); that it is hence controlling and exclusive and that the service made pursuant to section 221, subdivision (c) is valid; that jurisdiction has thus been acquired over the person of the defendant as a foreign corporation.
I am unable to accept this view. Firstly, it is held that so far as the federal Constitution is concerned, it is within the acknowledged power of every legislature to prescribe rules of procedure in courts of its own government. The establishment of courts of justice, within each state, according to its laws, and of the procedure in conjunction therewith, is the peculiar and exclusive province and duty of the state legislatures. 12 C.J. § 288, 291, p. 826; 15 C.J. § 178, p. 854; 16 C.J.S. Constitutional Law § 128, pp. 312, 313, 328; 11 Amer. Juris. § 192, p. 892, Const. Law; Adams v New York, 192 U.S. 585, 599, 24 S.Ct. 372 [375] 48 L.Ed. 575; State v. LaPointe, 81 N.H. 227, 123 A. 692, 31 A.L.R. 1212; Cooley's Const. Lim., 8th Ed., vol. 1, p. 68. Secondly, a study of the provisions of the Motor Carrier Act reveals the intent and purpose of Congress under this Chapter 8, to confer upon the Interstate Commerce Commission jurisdiction as respects the commercial, financial and business aspects of interstate highway transportation and to leave untouched in the hands of the states control over their internal affairs, especially in view of the provisions in said Chapter 8 declaring the policy of Congress in enacting the Act in question. This intent of Congress to restrict the Act to the regulation of commercial practices involved in motor transportation, rather than to make it applicable to other considerations, clearly appears from section 202 of the Act, Part II. 49 U.S.C. § 302, 49 U.S.C.A. § 302, which reads as follows: "Sec. 302. Declaration of policy and delegation of jurisdiction to Interstate Commerce Commission, (a) It is hereby declared to be the policy of the Congress to regulate transportation by motor carriers in such manner as to recognize and preserve the inherent advantages of, and foster sound economic conditions in, such transportation and among such carriers in the public interest; promote adequate, economical, and efficient service by motor carrier, and reasonable charges therefor, without unjust discriminations, undue preferences or advantages, and unfair or destructive competitive practices; improve the relations between, and coordinate transportation by and regulation of, motor carriers and other carriers; develop and preserve a highway transportation system properly adapted to the needs of the commerce of the United States and of the national defense; and cooperate with the several States and the duly authorized officials thereof and with any organization of motor carriers in the administration and enforcement of this chapter."
When the question is whether a federal Act overrides a state law, the entire scheme of the statute must be considered. 11 Amer. Juris., § 176. p. 873, Const.Law. Nowhere in the Act does it appear to be the intent and purpose of Congress, in the enactment of this law, to interfere with or usurp the power of the states relating to matters of state internal policy, concerning the jurisdiction of their courts or with the procedure prescribed by their legislatures for the acquisition of jurisdiction by their judicial tribunals over foreign corporations. The clear intent and purpose of Congress was to limit the Act solely to the regulation of commercial practices. (21 N.Y.S.2d 795-796).
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 defendant maintains that since it is a registered interstate motor carrier under the Motor Carrier Act of 1935, as amended, and had designated a person in this State as required by 49 U.S.C.A. § 321(c) upon whom service of process could have been made, service upon such person was the exclusive method of serving the summons and complaint upon the defendant in this action. Section 321(c) in part reads:
"(c) Every motor carrier shall also file with the board of each State in which it operates and with the Interstate Commerce Commission a designation in writing of the name and post-office address of a person in such State upon whom process issued by or under the authority of any court having jurisdiction of the subject matter may be served in any proceeding at law or equity brought against such carrier. In the event such carrier fails to file such designation, service may be made upon any agent of such motor carrier within such State."
The defendant cites no decisive authority in support of its contention and none has been found in which the precise question presented here has been decided.
It is needful in answering the question presented to consider the authority of the legislature of the State of New York to enact § 52 of the Vehicle and Traffic Law and the purposes of the Congress in enacting § 321(c) of Title 49 of the United States Code Annotated, as part of the Motor Carrier Act. Section 52 as hereinafter shown was enacted under the police power of the State.
Section 52 of the Vehicle and Traffic Law provides that the operation by a non-resident of a motor vehicle in this State, or the operation of a motor vehicle, trailer, or semi-trailer owned by a nonresident if operated in this State with his consent "shall be deemed equivalent to an appointment by such nonresident of the secretary of state to be his true and lawful attorney upon whom may be served the summons in any action against him, growing out of any accident or collision in which such nonresident may be involved The enactment of this section "is a valid exercise of police power, and is not in conflict with the requirements of due process." Leighton v. Roper, 300 N.Y. 434, 444, 91 N.E.2d 876, 882, 18 A.L.R.2d 537. In Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091, the court, in upholding the constitutionality of a Massachusetts statute similar in fundamentals to § 52 of the New York Vehicle and Traffic Law, said:
"The state's power to regulate the use of its highways extends to their use by non-residents as well as by residents. Hendrick v. State of Maryland, 235 U.S. 610, 622, 35 S.Ct. 140, 59 L.Ed. 385. And, in advance of the operation of a motor vehicle on its highway by a nonresident, the state may require him to appoint one of its officials as his agent on whom process may be served in proceeding growing out of such use. Kane v. State of New Jersey, 242 U.S. 160, 167, 37 S.Ct. 30 [31], 61 L.Ed. 222. That case recognizes power of the state to exclude a nonresident until the formal appointment is made. And, having the power to exclude, the state may declare that the use of the highway by the nonresident is the equivalent of the appointment of the registrar as agent on whom process may be served." 274 U.S. at page 356, 47 S.Ct. at page 633.
There could be no question of the application of § 52 of the Vehicle and Traffic Law to the instant case but for § 321(c) of Title 49 of the United States Code Annotated (Sweet v. Miller, Sup.Ct. Erie Co., 1933, 147 Misc. 806, 264 N.Y.S. 565).
The law is well settled that the intention of Congress to exclude states from exerting their police power must be clearly manifested. In Allen-Bradley Local v. Wisconsin Employment Relations Board, 315 U.S. 740, 749, 62 S.Ct. 820, 825, 86 L.Ed. 1154, the Court said:
"Furthermore, this Court has long insisted that an 'intention of Congress to exclude states from exerting their police power must be clearly manifested.' Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 611, 47 S.Ct. 207, 209, 71 L.Ed. 432, and cases cited; In People v. County Transp. Co., 303 N.Y. 391, 103 N.E.2d 421, the action was brought to recover a penalty from the defendant, an interstate motor carrier. The Court said at page 399 of 303 N.Y., at page 426 of 103 N.E.2d:
"It was early said that State legislation is invalidated only if the Federal and State regulations] cannot either practically or logically exist together. Sinnot v. Davenport, 22 How. [U.S.] 227, 243, 16 L.Ed. 243. Even more important is the doctrine enunciated in a long line of cases, that 'The intention of Congress to exclude states from exerting their police power must be clearly manifested.' Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 611, 47 S.Ct. 207, 209, 71 L.Ed. 432, and cases there cited; Allen-Bradley Local B. Board, 315 U.S. 740, 749, 62 S.Ct. 820, 86 L.Ed. 1154, and cases cited. Here we have in section 62 of the Public Service Law an exercise of police power affecting a bus line, a public utility, rendering a public service in the community. The basic applicable canon of statutory construction governing all the variations of exercisable police power was well stated as follows in Maurer v. Hamilton (309 U.S. 598, 614, 60 S.Ct. 726, 735, 84 L.Ed. 969): 'As a matter of statutory construction Congressional intention to displace local laws in the exercise of its commerce power is not, in general, to be inferred unless clearly indicated by those considerations which are persuasive of the statutory purpose.' "
There clearly was no intent on the part of Congress in requiring an. interstate motor carrier to designate a person upon whom service of process may be made in a State to supersede a statute, such as § 52 of the Vehicle and Traffic Law, which applies to all non-resident owners of motor vehicles operated by them or with their consent in this State. The purpose of § 321(c) [49 U.S.C.A. § 321(c)] was not to bestow a benefit or privilege upon motor carriers by curtailing the statutory rights of the residents of a state, but for the protection of shippers and persons injured by the carriers' motor vehicles while operated on State highways. In Madden v. Truckaway Corporation, D.C.Minn.1942, 46 F.Supp. 702, at page 704, the Court said: "Apparently, Congress had in mind that the public should be protected by reason of accidents growing out of the negligent use of motor vehicles engaged in interstate transportation, and also that shippers should be protected in the event of loss of property shipped in such commerce."
In Huber v. Wilson, 1938, 23 Tenn.App. 109, 126 S.W.2d 893, the Court in a personal injury action upheld the service of process under 49 U.S.C.A. § 321(c) and stated that it was unnecessary to decide whether that method of service was exclusive. The Court, however, stated (126 S.W.2d at page 895): "Under the law of the state there are other statutory provisions providing for the service of process upon the nonresident corporation doing business in this state, and in construing these acts the courts have held that the method provided for the service of process is not an inclusive method but a cumulative method and since this is true the plaintiff may bring the defendant before the court by complying and conforming to the provision of either act."
There is a further consideration in construing § 321(c) [Title 49 U.S.C.A.]. This section does not authorize service of process upon an interstate motor carrier involved in a highway accident in a State in which it has designated a person upon whom service may be made when it is carrying only intrastate commerce at the time the accident occurs. Davies v. Mahanes, 4 Cir., 1950, 183 F.2d 671. It is not reasonable to assume that Congress intended that a person injured in a highway accident in which an interstate motor carrier is involved would have to determine at his peril the character of the freight being hauled, that is its loading and destination points, nor is it reasonable to assume that the State method of service of process upon an interstate carrier (Vehicle and Traffic Law, § 52), is superseded when the motor carrier is hauling one type of shipment and not superseded when carrying another type of shipment.
It appears to have been assumed in the following cases that service of process upon an interstate motor carrier in a State pursuant to § 321(c) is not an exclusive method of service. Esperti v. Cardinal Trucking Corp., 263 App.Div. 46, 31 N.Y.S.2d 253; Bullock v. Tamiami Trail Tours, 7 Misc.2d 109, 162 N.Y.S.2d 69; Schneir v. Tishman, 176 Misc. 427, 27 N.Y.S.2d 728; Kuris v. Pepper Poultry Co., Inc., 174 Misc. 801, 21 N.Y.S.2d 791.
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 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 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.