Court Opinion

ID: 3237441
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:11:37.627273+00
Date Added: 2024-06-11T12:42:58.731610
License: Public Domain

I am in accord with the opinion written by Mr. Justice FOSTER as applied to cases where no receivership has intervened.
Manifestly section 232 of the Constitution, requiring foreign corporations, as a condition precedent to doing business in this state, to have a known place of business and an authorized agent thereat, and section 7209 of the Code, making these facts matters of record, are primarily for the purpose of subjecting such corporation to the jurisdiction of our courts for the adjudication of legal rights and liabilities arising in the conduct of its business in this state. All our decisions recognize this major purpose.
This purpose would fail in much if such corporation can, at pleasure, suddenly cease to do business in Alabama, ending all authority of agents here; its property meantime being placed beyond the reach of process in rem.
Logically the act of entering this state on the terms stated implies a consent that its designated agent shall receive service of all process in cases arising from the conduct of its business here; that, for such purpose, the corporation is still here, although it has ceased to do the business that brought it here.
The notion that in such cases the citizen of Alabama must seek redress at the domicile of the corporation is out of keeping with the purposes of section 232. Moreover, what claim would Alabama or her citizens have upon a sister state under the rule of comity in such case? It could well be said that Alabama and not the state of the domicile has brought the corporate activities into Alabama, that Alabama has reaped the benefits thereof, that the sister state and her taxpayers should not assume the burden of adjudicating the claims of Alabama citizens arising in the conduct of the Alabama business, especially when Alabama has, by her own laws, closed the doors of her courts against such actions.
The law, as stated by Justice FOSTER, and well sustained by authority in other states, I think should now be declared the law of Alabama, although it seems to me expressions in some of our former decisions, cited by Mr. Justice GARDNER, are not in harmony with these views, and should be modified.
But I am convinced that the fact of a receivership and the order of the court copied in the original opinion are not to be ignored in dealing with this case.
Under this record the federal courts have taken jurisdiction of the res, the possession, and operation of the railroad through a receiver. The adjustment and allowance of existing liabilities of the corporation is drawn within the jurisdiction of that court. To this end that court has decreed that the receiver shall defend all actions pending at the time of his appointment, and all actions thereafter brought against thecorporation. This includes the action here involved.
Courts of equity having jurisdiction of the res, and proceeding through receivership, as a rule, do not undertake to adjudicate claims arising in tort, but await an adjudication by the law court. But the court, through its receiver, conducts the defense through the law court.
In case the corporation is wholly insolvent, neither management nor stockholders having any interests to conserve, the court can have no assurance that anything will be done by the corporation toward defending the action. Other creditors of the corporation are directly concerned with the character and amount of liabilities charged against the res. They properly look to the court to protect them. This the court does through its receiver. Since he is the party to defend the suit brought against the corporation, he is the party to whom notice of the suit should go.
In my opinion, considering all the principles involved, the order of the court directing the receiver to defend this action constitutes him the law-made agent to receive service on behalf of the defendant corporation. The state court having jurisdiction of the subject-matter, and of a representative of all interests adverse to plaintiff, may, in my opinion, proceed regardless of any question of continued corporate business in Alabama. *Page 155 
I do not mean to say that where service can and is regularly had on the corporation through an agent authorized by law to receive service, the corporation may not defend the suit, and the receiver join in the defense as he may be advised; but I am insisting that in case the designated agent be dead or has removed, and the corporation has, in fact, no agent in Alabama, still the court having jurisdiction of the receivership is fully empowered to direct its receiver to defend such suits, and thus furnish a law-made agent to receive service and adjudicate the liability as a charge against the assets in receivership. In all such cases the receiver has authority to defend in the interests of other claimants as well as of defendant corporation.