Court Opinion

ID: 7277435
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:01:51.606532+00
Date Added: 2024-06-11T16:18:55.378770
License: Public Domain

Chief Justice Shepard
delivered the opinion of the Court:
The validity of the summons and service to bring the Coal & Coke Railway Company, a corporation of the State of West Virginia, before the supreme court of the District of Columbia, is determinable by the provisions of see. 1537 of the Code [31 Stat. at L. 1419, chap. 854], which [is amended in 32 Stat. at L. 544, chap. 1329, and] reads as follows:
“Service on Foreign Corporations. — In actions against foreign corporations doing business in the District, all process may be served on the agent of such corporation or person conducting its business, or, in case he is absent and cannot be found, by leaving a copy at the principal place of business in the District, or, if there be no such place of business, by leaving the same at the plane of business or residence of such agent in said District ; and such service shall be effectual to bring the corporation before the court. When a foreign corporation shall transact business in the District without having any place of business or resident agent therein, service upon any officer or agent of said corporation in the District shall be effectual as to suits growing out of contracts entered into or to be performed, in whole or in part, in the District of Columbia, or growing out of any tort heretofore or hereafter committed in said District.”
By act of February, 1907, the last paragraph was amended by inserting the word “employee” after agent, as one upon whom service might be had. 34 Stat. at L. 874, chap. 445.
It is a settled principle of law that the legal residence or habitat of a corporation is in the State under whose laws it shall have been organized. When foreign corporations began to extend their operations into the District of Columbia, doing business or performing acts therein out of which controversies *169would naturally arise, sound public policy dictated tbe provision by statute of the power and means to bring them under the jurisdiction of the District courts, in order to remedy the mischief that would otherwise result from the application of the foregoing principle.
The provision quoted does not undertake to specify what particular acts or transactions shall constitute doing business in the District by a foreign corporation. It is, therefore, a matter for judicial determination.
A corporation is usually created and empowered to engage in some particular business or enterprise, but it necessarily exercises many powers, and transacts many matters of business, incidental to the main object. It has the power, therefore, not only to establish offices for the conduct of its chief business, but also for the transaction of any business incidental thereto. Be Hohorst, 150 U. S. 653, 663, 37 L. ed. 1211, 1215, 14 Sup. Ct. Rep. 221; Ricketts v. Sun Printinq & Pub. Asso. 27 App. D. C. 222, 226.
In the first of those cases, the defendant (sued in the State of New York) was a foreign corporation created for the purpose of constructing and operating ships engaged in trade with this country. The principal office was in a foreign country. It owned docks in the State of New Jersey, where its ships were loaded and unloaded, and maintained there an office for the transaction of all business relating to its industrial operations. Kunhardt & Company, who had an office of their own in New York, were the agents of the corporation for its “usual monetary and financial transactions;” the nature of which does not appear in the report of the case. Service of summons upon’ Kunhardt & Company was held sufficient to bring the corporation before the court in New York.
In Ricketts v. Sun Printing & Pub. Asso. supra, the defendant corporation was organized to publish the Sun newspaper in the city of New York, but it also engaged in carrying on the business of a press news association. It maintained an office in the city of Washington, where, for convenience, a part of the subordinate business was transacted. This was held to be doing *170business in the District of Columbia within the meaning of the statute. We perceive no material distinction between those cases and this. It is true that the industrial operations of the defendant herein were conducted entirely without the limits of the District of Columbia. It sold no tickets therein for the transportation of persons, and entered into no contracts for the carriage of goods. But it did maintain an office in the city of Washington, in which were to be found, for the greater part of each year, its president, secretary, and treasurer, who there transacted business incidentally relating to the corporate purposes, and important to the success of its industrial operations. Bids for the construction of its road were there opened, considered, and accepted by the managing officers and their assistants. The arbitration out of which this action arose was agreed upon in said office, and the proceedings thereunder were there conducted. These, and other matters relating to the corporate business and management, as shown in the testimony hereinbefore recited, were transacted in said office. It is clear that, if the corporation had maintained an agency in the District for the conduct of a part of its regular industrial operations, it would be doing business therein, within the contemplation of the statute, and service of summons upon such subordinate agent would be effectual to bring the corporation before the District courts.
For a stronger reason, we think, the maintenance of an office in the District for the performance by the general officers of their duties of management and supervision of the affairs of the corporation amounts to doing business therein within the meaning of the Code.
That said office was maintained, primarily, for the convenience of the president and treasurer, who chose, for social purposes, to remain in the city of Washington during the greater portion of each year, is, in our opinion, immaterial. Their convenience was made that of the corporation also. Recognizing the fact that business would be transacted in said office in the promotion of its objects, the corporation paid 70 per cent of the office rent.
*171The substantial transfer of the general corporation management and supervision to that office, though primarily intended for the convenience of the managing officers, was approved by the corporation, and it cannot escape the legal consequences of its acts.
It has been earnestly contended that the foregoing conclusion is in conflict with a recent decision of the Supreme Court of the United States. Green v. Chicago, B. & Q. R. Co. 205 U. S. 530, 51 L. ed. 916, 27 Sup. Ct. Rep. 595. We perceive no conflict whatever; the facts of the two cases are quite different. The defendant in that case was an Iowa corporation, maintaining a railway in the Northwest, the Eastern terminus of which was the city of Chicago. Plaintiff, a citizen of Pennsylvania, brought an action against it in that State for personal injuries received on defendant’s lane in the State of Colorado. Defendant had a district freight and passenger agent in Pennsylvania, for whose use it furnished an office. The agent’s business was to solicit passengers and freight for further carriage over its lines in the West. He sold no tickets and received no payments for transportation of freight. It was held that these facts did not amount to doing business in the State of Pennsylvania. The court said: “The business shown in this case was, in substance, nothing more than that of solicitation. Without undertaking to formulate any general rule defining what transactions will constitute ‘doing business,’ in the sense that liability, to service is incurred, we think that this is not -enough to bring the defendant within the district so that process can be served upon it.” Had the defendant maintained an office in Pennsylvania for its president, secretary, and treasurer, wherein the affairs of the corporation were in great part managed, we believe that the jurisdiction would have been sustained.
This conclusion renders it unnecessary to consider whether the jurisdiction can be maintained upon other clauses of the section.
The order will be reversed, with costs, and the cause remanded for further proceedings. Reversed.