Opinion ID: 1157090
Heading Depth: 1
Heading Rank: 1

Heading: Status of Foreign Corporations for Purpose of Venue.

Text: As a general rule, a corporation is considered a resident only of its state of incorporation, and cannot be a resident of any other state. Seaboard Co. v. Chicago, etc., Ry. Co., 270 U.S. 363, 46 S.Ct. 247, 70 L.Ed. 633 (1926). Various exceptions have been carved into this rule, however, and the question of whether a foreign corporation has acquired a local residence may depend upon the particular context in which the question arises. See 36 Am.Jur.2d, Foreign Corporations, § 34 (1968) and cases collected therein. No clear trend appears among the decisions of the courts of other states which have considered this question. The apparent inconsistencies in these cases are attributed to the differences in venue statutes and the construction of those statutes by the various courts. 20 C.J.S. Corporations § 1906 (1940). Our case is one which turns solely on construction of New Mexico's venue statute. Section 38-3-1 provides, in part: All civil actions commenced in the district courts shall be brought and shall be commenced in counties as follows, and not otherwise: A. first, except as hereinafter provided in Subsection F of this section, relating to foreign corporations, all transitory actions shall be brought in the county where either the plaintiff or defendant or some one of them, in case there be more than one of either, resides; or second, in the county where the contract sued on was made or is to be performed, or where the cause of action originated or indebtedness sued on was incurred; or third, in any county in which the defendant or either of them may be found in the judicial district where the defendant resides;       F. suits may be brought against transient persons or nonresidents in any county of this state, except that suits against foreign corporations, admitted to do business and which designate and maintain a statutory agent in this state upon whom service of process may be had, shall only be brought in the county where the plaintiff or some one of them, in case there be more than one, resides or in the county where the contract sued on was made or is to be performed or where the cause of action originated or indebtedness sued on was incurred, or in the county where the statutory agent designated by such foreign corporation   . Aetna argues that Subsection F applies, by its own terms, only to suits against foreign corporations. Since this action was brought by a foreign corporation, Subsection A applies and the action may be brought in the county where either the plaintiff or defendant resides. Aetna contends that it has established residence in Bernalillo County as the county of its principal place of business in this state. We agree that Subsection F applies only to suits brought against foreign corporations and therefore does not govern venue in this action. However, the salient point here is that Subsection F places foreign corporations within the class of nonresidents. It provides: suits may be brought against transient persons or nonresidents in any county of this state, except that suits against foreign corporations   . [Emphasis added.] This phrase places foreign corporations within a class of persons defined as transient persons and nonresidents. By definition, neither transient persons nor nonresidents have a legal residence within the jurisdiction. See Black's Law Dictionary 953 and 1343 (5th ed. 1979). The language of the Legislature controls and must be read and understood according to its grammatical sense, unless it is clear that something different was intended. See In re Goldsworthy's Estate, 45 N.M. 406, 115 P.2d 627 (1941). The plain grammatical meaning of Subsection F is that foreign corporations are nonresidents. No contrary intention appears. In fact, by the inclusion of Subsection F the Legislature clearly intended to treat foreign corporations (as well as other nonresidents and transient persons) somewhat differently than residents. Thus the conclusion that foreign corporations are nonresidents is consistent with the distinction drawn in the statute between residents and foreign corporations. We hold that, under the plain and unambiguous language of Section 38-3-1, foreign corporations are considered nonresidents of this state for the purpose of venue. Since Subsection F provides venue rules only for suits against foreign corporations, we must return to Subsection A to determine where venue is proper in suits brought by foreign corporations. It provides that suit may be brought in the county where either the plaintiff or defendant resides, where the contract sued on was made or is to be performed, or where the cause of action or indebtedness was incurred. The only basis for venue in Bernalillo County in this action was that it was the county of Aetna's alleged residence. Since Aetna has no legal residence in this state for venue purposes, the trial court erred in denying the motion to dismiss.