Court Opinion

ID: 3875980
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:08:58.990221+00
Date Added: 2024-06-11T07:45:47.990210
License: Public Domain

I think it clearly appears from the record that the Court of Common Pleas for Dillon County was without jurisdiction of the action, and that it should have been so declared.
It is conceded that the defendant is a domestic corporation, with its principal place of business, and actually doing business, in the city of Columbia, Richland County. Its domicile — its legal residence — is therefore in Richland County, and it is a matter not only of legal right but of the jurisdiction of the Court that it be sued in that county only, unless it should appear that the corporation is maintaining an agent and transacting its corporate business in some other county in the State. It has been sued in the County of Dillon, and, in order to sustain the jurisdiction of the Courts of that county, it is incumbent upon the plaintiff to establish the exception indicated.
I do not at all agree to the statement in the leading opinion:
"The question raised by the appeal is not whether the defendant maintained an agent and conducted its corporate business in the County of Dillon, so as to constitute it a resident of Dillon and thus give the Court of Common Pleas for that county jurisdiction of the subject matter of the action (Section 174, Code of Civil Proc. 1912), but whether Cottingham was an agent within the meaning of Section 184, Code of Civil Proc. 1912, upon whom service of process would suffice to give jurisdiction of the defendant's person." *Page 353 
On the contrary, the question stated, the existence of which is denied, as I understand it, is the crux of the appeal; the subsidiary question, whether or not Cottingham was an agent of the defendant, being determinative on the main question.
The notice of the motion to set aside the service of the summons contains the grounds of the motion: That the defendant "corporation is a resident of Richland County, S.C. has its principal and only place of business at Columbia, in that county, and has no office or agent in Dillon County, owns no rear estate or other property in Dillon County, and therefore not a resident of Dillon County, and has no agent there upon whom summons and complaint may be served, and that L. Cottingham is not an agent of said company"; matters going directly to the jurisdiction of the Court of Common Pleas for Dillon County, not simply of the person of the defendant but of the subject-matter of the controversy.
The affidavits submitted by the defendant are in support of the objection to the jurisdiction of the Court; the arguments of both appellant and respondent are full upon the question of jurisdiction; and, while the appellant's exception apparently raises the single issue of Cottingham's agency, that is a matter in support of their main contention; and if the appellant had not, by this exception, raised the question of jurisdiction, as had often been held, it may be raised for the first time in this Court and by the Court sua sponte.
Even if the question of jurisdiction be not at issue upon this appeal, as held in the leading opinion, the decision of the appeal would not conclude the defendant from raising it when the case comes to trial; and it seems to me that it is in the interest of the speedy administration of justice that it be determined now. It is well settled that the question raised goes to the jurisdiction of the subject-matter and not simply of the person.
A marked distinction between the law as to foreign corporations and that as to domestic corporations, in the matter *Page 354 
of jurisdiction, is that, in the case of a foreign corporation, the question is whether or not the Court had jurisdiction of the person of the defendant so that it could render a personal judgment against it. In the case of a domestic corporation, the question is whether or not the Court had jurisdiction of the subject-matter. In McGrath v. Insurance Co.,74 S.C. 69; 54 S.E., 218, the Court said:
"Jurisdiction has two aspects, jurisdiction of the person and jurisdiction of the subject-matter. In so far as jurisdiction of the person is concerned, it is settled by numerous cases that a general appearance or answer to the merits is a waiver of such objection to jurisdiction. Garrett v. HarringCo., 69 S.C. 278. When, however, jurisdiction of the subject-matter is concerned, it is not waived by appearance and answer but may be urged at any time. Ware v. Henderson,25 S.C. 387. Bell v. Fludd, 28 S.C. 314;5 S.E., 810. The last cited cases show that the present question relates to jurisdiction of the subject-matter, the power of the Court for Abbeville County to hear the cause, notwithstanding jurisdiction of the person was acquired by the service of process upon defendant's alleged agent in Abbeville County or by the answer to the merits."
"The result * * * is that a domestic corporation must be sued in the county of its legal residence and that the jurisdiction in such case relates to the subject-matter and not the person." Hunter v. Alderman, 79 S.C. 555;61 S.E., 202.
Coming then, as I think we must, to a determination of the real issue in the case, the question of jurisdiction: In view of the many Statutes of other States regulating the place of trial of actions against domestic corporations, it is remarkable that this State has no specific legislation upon the subject; the matter is referable to an omnibus provision in Section 174 of the Code, applicable as well to individuals as to domestic corporations. After providing, in Section 173, for the trial of certain causes in the county in which *Page 355 
the cause or some part thereof arose, inapplicable to the present inquiry, it is provided, in Section 174:
"In all other cases the action shall be tried in the county in which the defendant resides at the time of the commencement of the action."
It has accordingly been left to judicial interpretation to declare where the residence of a domestic corporation may be said to be; and I think that the following principles have been thoroughly settled:
(1) A domestic corporation resides and may be sued in the county where its principal place of business is fixed by its charter; and this although its actual business may be carried on, and its officers reside, in some other county.
(2) A domestic corporation may be sued in any county where it has and maintains a place of business or servants, employees, or agents engaged in conducting and carrying on the business for which it exists; notwithstanding the fact that its principal place of business may be fixed by its charter in another county and it may be actually conducting its principal business in such county.
"The residence of the company, if a local residence can be affirmed of it, is more obviously where it is actually present in the operations of its enterprise." Glaize v. R. Co., 1 Strob., 70.
"A railroad company, under the laws of this State, is, within the meaning of Sec. 146 [174] of Code, a resident of the county or counties in which its line * * * is located, and where it maintains a public office for the transaction of its business, and an agent upon whom process may be served." Tobin v. R. Co., 47 S.C. 387;25 S.E., 283; 58 Am. St. Rep., 890.
"Section 146 of our Code [now 174] provides that actions of this character, injury to personal property, shall be tried in the county in which the defendant resides. * * * We have no statute expressly providing for the place of trial of such actions against domestic corporations." Tobin v. R. *Page 356 Co., 47 S.C. 387; 25 S.E., 283; 58 Am. St. Rep., 890.
"In this state, whatever may be the rule elsewhere, a domestic corporation resides in any county where it maintains an agent and transacts its corporate business." McGrathv. Ins. Co., 74 S.C. 69; 54 S.E., 218.
"A domestic corporation is resident in any county in the State where it maintains an agent and conducts its corporate business, and under section 146 [174] Code of Procedure, must be sued in the county where it resides." Elmsv. Power Co., 78 S.C. 323; 58 S.E., 809.
"If a defendant is a domestic corporation, the suit may be brought in any county where it maintains an agent and transacts its corporate business." Dennis v. R. Co., 86 S.C. 258;68 S.E., 465.
"It is settled that a suit may be brought against a domestic-corporation in any county where it maintains an agent and conducts its corporate business." Patterson v. OrangeburgCo., 120 S.C. 478; 113 S.E., 318.
"A corporation, like an individual, has the right and privilege secured to it by the laws of Texas to be used in the county of its domicile, unless it is alleged and proved by the plaintiff that it has an agency or representative in the county in which the suit was instituted, other than the place in which its domicile is situated. The right to sue in another than the county of domicile is for the benefit of the plaintiff, and he must present the facts necessary to show that his case comes within the countenance and support of the exceptions to the general rule that no person who is an inhabitant of this state shall be sued out of the county in which he has his domicile." Cannel Coal Co. v. Luna
(Tex.Civ.App.) 144 S.W. 721.
Inasmuch as the right of a corporation to be sued only in the county of its residence it derived from the same provision of the law as is that of an individual: "In all other cases the action shall be tried in the county in which the defendant resides," it would seem logically to follow *Page 357 
that conducting business through an agent in another county would no more constitute a new residence in the one case than in the other. But, as repeated decisions have drawn such a distinction, the matter has passed beyond the expediency of criticism. Attention is called to it merely as a warning against further straining of the law.
In passing upon the question of whether or not the defendant maintained an agent and transacted its corporate business in the County of Dillon, it is necessary to consider the relation which existed in a business way between defendant and one L. Cottingham, for it is upon that relation alone that the jurisdiction is claimed. If Cottingham, upon the admitted facts, may be said to have been an agent of the defendant, residing and transacting the defendant's business in Dillon County, the jurisdiction is complete, otherwise not.
I do not think that there is a particle of evidence in the case that Cottingham was in any sense an agent of the defendant. It matters little what Cottingham called himself, what others called him or thought he was, his relation to the defendant is clearly shown by the undisputed facts, and it is to them and not to the interpretations placed upon them by Cottingham or anyone else that we must look.
I think that it appears beyond controversy that Cottingham was an independent cotton buyer residing at Dillon and doing business there strictly upon his own account; he bought cotton on his own account, with his own money, expecting to sell it at an advanced price or for a stated commission to either the defendant or any other buyer. The business arrangement between him and the defendant, which also was engaged in buying cotton, was that each day Cotingham would call up the defendant by telephone, state what the market was at Dillon, and inquire what the defendant would give for cotton on that particular day. If the defendant was in the market and was willing to give price at Dillon, it would so state to Cottingham, giving the *Page 358 
number of bales desired. Cottingham would then buy the cotton which the defendant indicated, paying for it out of his own money, ship it to the defendant, and draw upon defendant for the invoice, which would include a definite profit to him per bale. If this amounts to anything more than a business engagement between two parties, acting as independent traders, it is beyond my comprehension.
"But it is at once apparent that this is not a case where one company has employed another to transact for it a material part of the employer's business, but is a case where two independent companies, each in pursuit of its own business, has engaged to perform, for the material benefit of each, some specified duty with relation to a particular transaction."State v. Superior Court, 86 Wn., 657;150 Pac., 1149.
Compare the facts in the case at bar with those in Pattersonv. Orangeburg Co., 120 S.C. 478; 113 S.E., 318, where the agency was established:
"There was evidence before the Circuit Judge tending to establish that Cave [the person upon whom process was served] had been the agent of the fertilizer company for about eight years, that he was paid a monthly salary, that his business was to sell fertilizer, that he solicited orders and sent them to the headquarters of the corporation at Orangeburg, that he represented the company in the adjustment of terms of contracts and in having notes for the purchase price of fertilizer signed and forwarded, etc.'
It also appeared that the agent in question had consummated the contract out of which the suit arose. There could have been no other conclusion from these facts than that Cave was the agent of the corporation and that it was "doing business" in the County where the suit originated, in marked contrast to the facts of the case at bar.
The relation of agency implies two elements, both of which are absent in the transaction in question: (1) The power on the part of the principal to direct the conduct of *Page 359 
the business. (2) Liability of the principal for the acts of the agent within the scope of his authority.
It would have been impertinence on the part of the defendant to have directed Cottingham, who was selling to others as well as to defendant, how his private business should be conducted. Clearly there would have been no liability upon the defendant for Cottingham's transactions in such business. In fact, the interest which the defendant had in the cotton purchased by Cottingham was prospective merely, consummated by a trade between them to be afterwards entered into.
Test the existence of the relation of principal and agent by a hypothesis or two: If Cottingham had agreed to buy a farmer's cotton at a certain price and had refused to carry out his contract, could the farmer have sued the defendant upon such breach of contract? Surely, if Cottingham was the agent of the defendant. If Cottingham had stolen the cotton which he agreed to sell to defendant, could the defendant be held for it? If Cottingham, in trading for cotton, had willfully assaulted his seller; could the defendant be held for the assault? Surely, if Cottingham was an agent and acting within the scope of his agency.
While conceding that "the sufficiency of the service to convey notice or knowledge of the proceeding is of course by no means decisive of the validity," it is suggested in the leading opinion that that consideration is pertinent in determing the legality of the service upon one whose agency is brought in question. That may be true when the matter in question relates to jurisdiction of the person, but not of the subject-matter.
"The object of service of the summons is not only to give notice to the defendant of the pendency of a suit against him, but to bring him under the jurisdiction of the Court." Jenkins v. Bridge Co., 73 S.C. 526; 53 S.E., 991.
"The Circuit Judge was in error in the view which he seems to have taken that the object of the service had been *Page 360 
accomplished when the defendant received, through the service, notice of the suit, and by special appearance moved to set it aside. Hester v. Rasin Co., 33 S.C. 609;12 S.E., 563. Wren v. Johnson, 62 S.C. 533; 40 S.E., 937." Idem.
The same objection is applicable to the suggestion that the defendant may be estopped from denying the agency of Cottingham. This might be true if Cottingham had been a resident of Richland County and the matter in question was the jurisdiction of the person of the defendant, the Court admittedly having jurisdiction of the subject-matter. But it is inconceivable that the defendant may be estopped from denying the jurisdiction of the Court of the subject-matter. It is axiomatic that consent will never confer jurisdiction in such a case; and surely estoppel, which is in the nature of implied consent, has no greater force than expressed consent. Even answering on the merits does not waive the objection. Nixon v. Ins. Co., 74 S.C. 438;54 S.E., 657.
I do not suppose that there is a cotton mill in the State which has not a business arrangement such as the defendant had with Cottingham. To hold that every such cotton buyer, acting independently and under no contract whatsoever with the mill, is its agent, transacting not his business but the mill's business in another county, would render the mill amenable to suit in any one of perhaps forty Counties in the State; a position destructive of the right accorded by Statute to individuals as well as corporations to be sued only in the county of their residence.
I suggest with deference that the jurisdiction of the subject-matter, in an action against a domestic corporation, has been confused with the jurisdiction of the person in an action against a foreign corporation. In the latter the jurisdiction is obtained by service upon any agent in any county; in the former the jurisdiction is obtained only by service *Page 361 
upon an agent transacting the business of the corporation in a particular county.