Court Opinion

ID: 3988265
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:44:20.542279+00
Date Added: 2024-06-11T07:44:18.590477
License: Public Domain

I certainly am not averse to the idea that a non-resident principal should respond to the jurisdiction of this state in causes arising out of the business he may be conducting in this state. Undoubtedly there is an injustice in compelling the plaintiff to follow such a principal to the latter's home state to recover. There is another side to the picture, however. What about the non-resident who, though he is charged with doing business in this state, is, as a matter of fact not so doing; but, for lack of notice, suffers a default judgment and has to come to this state to have it set aside — and this, maybe, years after its entry due to his lack of knowledge of its existence?
Let us analyze this side of the picture for a moment. There are two important matters for consideration in process serving as contemplated by the code sections in question. One is that of notice to the defendant; the other the matter of agency. Of course all such process serving is founded upon the basic idea of affording the opposing party an opportunity to defend himself by giving him notice of what is to take place. This notice is considered of such importance, that even the most vicious of criminals is entitled to it before action may be taken against him. The process serving sections of our code set up foundations for service which, from our experience with human nature convince us are situations very likely to afford the opponent the notice. For instance: A summons left at his home. People go home daily, not to mention the interest a member of his family may have in seeing that he gets notice, or the interest his servant may have in passing it on to him. Notice particularly in that section of our code (104-5-11, par. 8) that the person with whom the summons is left must be 14 years of age. Why any minimum age? Simply because we are fearful that a person of lesser age may not have sufficient mental maturity to recognize the importance of handing any paper to the member of the household intended to be served — we are fearful that the latter will not get the notice we considered so important. *Page 321 
This is a good point at which to refer to the present case. The prevailing opinion in effect holds that if an alleged non-resident principal does not designate an agent, any agent of his may be served. But who determines this latter agency? The adverse party — the plaintiff — the one least interested in seeing that the non-resident actually gets notice — the one who is bound to construe the facts in favor of "doing business" in the state in order to make the service good. What does this adverse party do? He has a person served whom he calls an agent; and that person, being indifferent in the matter is not going to forward the process to the non-resident. Thus the prevailing opinion approves a foundation for service of process all elements of which are adverse to the likelihood of the alleged principal getting notice. It is said: Well, the non-resident principal may avoid this difficulty by designating an agent. This assumes a "doing business" in this state; and furthermore treats the service of process upon any agent as a penalty for failure to designate. The application of the penalty is left to the hands of an adverse party who, to say the least, is not going to be impartial in the matter. If the non-resident is to be penalized for a failure to designate an agent it should be after notice to him (that he may deny doing business, if that be the fact), not action that will jeopardize the likelihood of his getting notice. Notice to him; above all things; is important in due process. The penalty for non-designation should not be any loss of right to notice of process. If we are fearful that a child less than 14 years of age will not deliver notice left at the home (104-5-11), we should be doubly fearful of a party whose interests are adverse to the person to be served.
When a non-resident principal designates an agent, naturally he is going to make certain that his agent will forward the process. Under such circumstances the likelihood of notice is very strong, and the matter of agency is established of record. If, as in the motor vehicle laws (Section 12, Chapter 68, Laws of Utah 1943) of this state and others, a state official is made the process agent, the likelihood *Page 322 
of notice to the non-resident is assured by the necessity of mailing notice to him, which is a duty imposed by the statute upon the official. Wuchter v. Pizzutti, 276 U.S. 13,48 S. Ct. 259, 72 L. Ed. 446, 57 A.L.R. 1230, in which a New Jersey non-resident motorist statute was held to be bad because there was no provision for notice; Hess v. Pawloski, 274 U.S. 352,47 S. Ct. 632, 71 L. Ed. 1091, recognizing that there must be actual notice to the non-resident; and Henry L. Doherty  Co.
v. Goodman, 294 U.S. 623, 55 S. Ct. 553, 79 L. Ed. 1097, reasserting this principle. Incidentally, matters pertaining to automobiles, and matters pertaining to corporations are so bound up in state recordings that it is not hard to be certain of process on the right parties. That is not true of the individuals.
Before concluding this part of my opinion may I say this: We must recognize, of course, that be a statute ever so ingeniously worded there are always those who will and can abuse it. I am not arguing that point. My attack is centered upon the effect of the statute itself in that its tendency is to do away with notice, rather than require it.
Now as to the law upon these motor vehicle cases and cases similar thereto:
In the case of Henry L. Doherty  Co. v. Goodman, supra, the court expressly recognizes that one of the factors in deciding that case was the nature of the business which was being transacted. The case involved the sale of securities. A part of the opinion is quoted below:
"Iowa treats the business of dealing in corporate securities as exceptional, and subjects it to special regulation. The * * * act requires registration and written consent for service of process upon the secretary of state. * * * Considering thisfact, and accepting the construction given to Sec. 11079, we think to apply it as here proposed will not deprive him of any right guaranteed by the Federal Constitution. (Italics added.)
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"Moreover, under the laws of Iowa neither her citizens nor nonresidents could freely engage in the business of selling securities."
The case then goes on to discuss the "non-resident motorist statutes" which have been upheld by the United States *Page 323 
Supreme Court, as allowing the State by Statute to require actual appointment of a State Officer as agent to receive process, or else allow this result by statutes providing that use of highways shall be deemed agency for service of such process upon a state official designated in behalf of the non-resident motorist.
The case then concludes with this language:
"So far as it affects appellant, the questioned Statute goes no further than the principle approved by those opinions permits [referring to the principle enunciated in the `non-resident motorist vehicle cases' holding that the nature of the automobile and society is such that it is a reasonable classification for regulation]. Only rights claimed upon the present record are determined. The limitations of section 11079 under differentcircumstances we do not consider." (Italics added.)
Looking then to the "non-resident motorist" statutes we find that the validity of these statutes is based upon the fact that the act of the motorist involves danger to life and property and for this reason the state has power to forbid the non-resident access unless he first consents to exercise of jurisdiction over him by the courts of the state as to causes arising out of those acts. The Supreme Court of the United states has held that such a category is one which the states may constitutionally regulate, so long as provision is reasonably made for actual notice to thenon-resident and a reasonable time is given for him to come in and defend. Wuchter v. Pizzuti, supra; Hess v. Pawloski, supra; Henry L. Doherty  Co. v. Goodman, supra. (Note the importance of notice.) A state may forbid a non-resident motorist the use of the highways unless such motorist first consents to jurisdiction of the courts of that state over him. The following quotation is found in the case of Hess v. Pawloski, supra, which case is cited in the Doherty case as one of those enunciating the principle beyond which the Doherty case does not purport to go:
"Motor vehicles are dangerous machines, and even when skillfully and carefully operated, their use is attended by serious dangers to persons and property. * * *" [Then follows the balance of the *Page 324 
quotation which is set out in the majority opinion in which it is also recognized that actual notice must be provided for.]
Observe that the principle thus enunciated has its basis in the fact that motor vehicles are dangerous, and thus a category subject to special regulation under the police power. In this connection see also Kane v. State of New Jersey,242 U.S. 160, 37 S. Ct. 30, 61 L. Ed. 222. When the Henry L. Doherty  Co.
v. Goodman case approves the principle thus set out by theHess case and applies it to the facts then before the court, they do so on the theory that the sale of securities is the subject of regulation under the police powers. That the court in the Doherty case was not abrogating the rule of Flexner v.Farson, 248 U.S. 289, 39 S. Ct. 97, 63 L. Ed. 250, is further evidenced by the following quotation from Hess v. Pawloski, which case as indicated by the quoted part of the Doherty case above formed the basis for the principle there enunciated:
"* * * The mere transaction of business in a state bynon-resident natural persons does not imply consent to be boundby the process of its courts. Flexner v. Farson, 248 U.S. 289,39 S. Ct. 97, 63 L. Ed. 250. The power of a state to exclude foreign corporations, although not absolute, but qualified, is on the ground on which such an implication is supported as to them.Pennsylvania Fire Ins. Co. v. Gold Issue Mining Co.,243 U.S. 93, 96, 37 S. Ct. 344, 61 L. Ed. 610. But a state may not withholdfrom nonresident individuals the right of doing businesstherein. The privileges and immunities clause of the Constitution, (sec. 2, Art. IV), safeguards to the citizens of one state the right to `pass through, or reside in any other state for purposes of trade, agriculture, professional pursuits, or otherwise.' And it prohibits state legislation discriminating against citizens of other states. [Citations]" (Italics added.)
This quotation in its position in the case immediately precedes that quoted in the majority opinion.
In short, the Supreme Court of the United States has determined that a non-resident motorist is a category which may be regulated under the police powers. This is an entirely different thing from a non-resident coming into the state, merely to transact business. The "non-resident motorist *Page 325 
statutes" then represent an inroad in the general rule as announced in the case of Flexner v. Farson, supra, and not an abrogation of that rule in any sense. Having established that non-resident motorists are a category which should be subject to special police power regulation, then it no longer comes within the rule of Flexner v. Farson, supra, as a category the regulation of which violates the privileges and immunities of U.S. Citizens, provided that it is surrounded with the safeguards which we have indicated relative to actual notice and time to appear and defend.
Since the Doherty case and the Hess v. Pawloski case (together with others involving validity of the "non-resident motorist statutes") both go off on the ground that they are categories entitled to separate and special protection, they have little value as authority in determining the present question, which is: "Can a state impose a requirement such as here attempted involving all business carried on by non-residents within that State?"