Court Opinion

ID: 8742182
Source: CourtListenerOpinion
Date Created: 2022-11-26 10:52:54.595193+00
Date Added: 2024-06-11T17:00:27.998407
License: Public Domain

HAWLEY, District Judge,
after stating the foregoing facts, delivered the opinion of the court.
Was Smallman a business agent of the appellee, upon whom service could be made that would be binding upon it? Service of monition in admiralty may be made under the provisions of a state statute regulating the mode of service in actions at law and in equity. In re Louisville Underwriters, 134 U. S. 488, 493, 10 Sup. Ct. 587, 33 L. Ed. 991. Section 411 of the Code of Civil Procedure of 'California provides that ‘The summons must be served by delivering a copy thereof, as follows: * (2) If the suit is against a foreign corporation, or a nonresident joint stock company or association, doing-business and having a managing or business agent, cashier, or secretary within this state; to such agent, cashier, or secretary.” 2 Hitt. Code Civ. Proc. p. 964. The service of process, under the provisions of this statute, is jurisdictional, and must always be such as to constitute “due process of law.” The term “business agent,” as used in the statute, does not mean every man who is intrusted with a commission or an employment by a foreign corporation. It does not mean every man who does any kind of business for a corporation. It may be said that every employé of a railroad corporation is in a certain sense an agent of the corporation. But it would be absurd to say'that a brakeman employed by a corporation was a business agent upon whom service could be made because he performed some business for the corporation, or that an expressman regularly employed by a- manufacturing corporation to deliver machinery to its custom*687ers is an agent upon whom service could be made under the provisions of the statute. The statute was never intended to include under the term "'‘business agent"’ every person who might incidentally or occasionally transact some business for a foreign corporation. Its meaning must be drawn from the general context of the language used. The business agent mentioned in the statute means one bearing a close relation to the duties oí managing agent, cashier, or secretary of the corporation. It must he an agent who is appointed, designated, or authorized to transact and manage one or more distinct branches of business, which may be, and is, conducted and carried on by the corporation within the state where the service is made, — ■ one who stands in the shoes of the corporation in relation to the particular business managed, conducted, and controlled by him for the corporation. To constitute a managing or business agent upon whom service of summons could be made, the agent must be one having in fact a representative capacity and derivative authority, aud not one created by construction or implication, contrary to the intention of the parties. Mulhearn v. Publishing Co., 53 N. J. Law, 150, 20 Atl. 760, 11 L. R. A. 101; Mikolas v. Walker, 73 Minn. 305, 307, 76 N. W. 36; Railway Co. v. Hunt, 39 Mich. 470; Kennedy v. Society, 38 Cal. 151, 153; Sterett v. Railway Co., 17 Hun, 316; Reddington v. Mining Co., 19 Hun, 405, 408; Gottschalk Co. v. Distilling Co. (C. C.) 50 Red. 681, 683; N. K. Fairbank & Co. v. Cincinnati, N. O. & T. P. Ry. Co., 4 C. C. A. 403, 54 Fed. 420, 423, 38 L. R. A. 271; Wall v. Railway Co., 37 C. C. A. 129, 95 Fed. 398, 400; Railway Co. v. Roller, 41 C. C. A. 22, 100 Fed. 738, 741, 49 L. R. A. 77. Smallman was not such an agent, lie was a mere solicitor of business, working for a commission, and not an “officer or agent,” within the meaning of those terms as used in the statute.
The appellee herein was not under any restriction from selling its machinery in the state of California. It was not required, in order to transact that kind of business, to appoint an agent in California upon whom service could be made. The facts in this case show that the appellee sold its machinery and delivered it in the state of Illinois. It was not engaged in conducting any branch of its business in the state of California. Legal service of process upon a corporation, which will give a court jurisdiction over it, can be made only in the state where it resides by the law of its creation, or in a state in which it is actually doing business at the time of service, in the manner prescribed by the statutes of that state or of the United States. The question as to what kind of business by a foreign corporation within a state will justify a finding that it is engaged in business therein, and validate a service upon its agent, has been very thoroughly and elaborately discussed in the circuit and supreme courts of the United states, and the general consensus of opinion is that the corporation must transact within the state some substantial part of its ordinary business by its officers or agents appointed and selected for that purpose, and that the transaction of an isolated business act is not the carrying on or doing business in a state. U. S. v. American Bell Tel. Co. (C. C.) 29 Fed. 17, 37, et seq.; St. Louis Wire-Mill Co. v. *688Consolidated Barb-Wire Co. (C. C.) 32 Fed. 802; Gilchrist v. Railroad Co. (C. C.) 47 Fed. 593; N. K. Fairbank & Co. v. Cincinnati, N. O. & T. P. Ry. Co., 4 C. C. A. 403, 54 Fed. 420, 423, 38 L. R. A. 271; Evansville Courier Co. v. United Press (C. C.) 74 Fed. 918, 920; Swann v. Association (C. C.) 100 Fed. 922, 928; St. Clair v. Cox, 106 U. S. 350, 359, 1 Sup. Ct. 154, 27 L. Ed. 222; Manufacturing Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137; Construction Co. v. Fitzgerald, 137 U. S. 98, 106, 11 Sup. Ct. 36, 34 L. Ed. 608; Steamship Co. v. Kane, 170 U. S. 100, 111, 18 Sup. Ct. 526, 42 L. Ed. 964; Insurance Co. v. Spratley, 172 U. S. 602, 610, 19 Sup. Ct. 308, 43 L. Ed. 569; Beard v. Publishing Co., 71 Ala. 60, 62.
In St. Louis Wire-Mill Co. v. Consolidated Barb-Wire Co., supra, Judge Thayer said:
“When it is said that a corporation is engaged in business in a foreign state, and for that reason has voluntarily subjected1 itself to the operation of the laws of such foreign state regulating the service of process on foreign corporations,. reference is plainly had to business operations of the corporation carried on within the state through the medium of agents appointed for that purpose that are continuous, or at least Of some duration, and not to business transactions that are merely casual, such as an occasional purchase of goods or material within the foreign state.”
In St. Clair v. Cox, supra, Mr. Justice Field, in delivering the opinion of the court, said:
“We are of opinion that when service is made within the state upon an agent of a foreign corporation it is essential, in order to support the jurisdiction of the court to render a personal judgment, that it should appear somewhere in the record, either in the application for the writ or accompanying its service, or in the pleadings or the findings of the court, that the corporation was engaged in business in the state.”
In Insurance Co. v. Spratley, supra, the court said:
“In a suit where no property of a corporation is within the state, and the judgment sought is a personal one, it is a material inquiry to ascertain whether the foreign corporation is engaged in doing business within the state (Goldey v. Morning News, 156 U. S. 519, 15 Sup. Ct. 559, 39 L. Ed. 517; Merchants’ Mfg. Co. v. Grand Trunk Ry. Co. [C. C.] 13 Fed. 358); and, if so, the service of process must be upon some agent so far representing the corporation in the state that he may properly be held in law an agent to receive such process in behalf of the corporation.”
The decree of the district court is affirmed, with costs.