Court Opinion

ID: 3237438
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:11:37.60656+00
Date Added: 2024-06-11T13:43:16.298328
License: Public Domain

This is an action under the Federal Employers' Liability Act,45 U.S.C.A. § 51 et seq., for the death of plaintiff's intestate engaged in interstate commerce, and which occurred in Talladega county, Ala., November 21, 1932.
It was tried on issues made by a plea in abatement and replication to it. The facts pertaining to that issue were agreed on.
The agreed facts were: That defendant was a foreign corporation organized under the laws of Georgia. That prior to November 21, 1932, it had filed with the Secretary of State an instrument required by section 7209, Code, and section 232, Constitution, designating Montgomery as its known place of business in Alabama, and an authorized agent there residing. That it had not prior to the institution of this suit filed any instrument abandoning or changing the place of business or in any way amending the said designation of its place of business and appointment of its agent. That on and not before December 19, 1932, a receiver of defendant's property and operations was appointed by a United States District Court of Georgia, and that on January 6, 1933, an ancillary receiver was appointed by the United States District Court at Montgomery. That since such receivership all the assets and properties of defendant have been in the exclusive custody, control, management, and possession of said receiver, and all its railroad and business have been operated, possessed, and controlled exclusively by the receiver, and defendant as such corporation has not exercised any corporate functions or done any business of any kind by agent or otherwise in any county in the state, but its business has been operated and conducted by said receiver. That it has not paid, or been required to pay to the state or any subdivision, any franchise or license tax or fee for a permit or other fee as a foreign corporation.
Appellee contends: (1) That it was not doing business in Montgomery county, and so not subject to suit there under section *Page 151 
232, Constitution, and section 7209, Code; and (2) that the courts of Alabama have no fundamental jurisdiction over appellee under the Fourteenth Amendment, because appellee was not doing business in Alabama when the suit was begun.
We notice that appellee does not raise any question as to the sufficiency of the service to justify a personal judgment. Indeed, counsel in brief for appellee, for the purpose of this appeal, concede that the service was effected. We will treat those contentions in the order as made by appellee.
Does section 232, Constitution, prohibit suit against a foreign corporation, though personal service is effected, in every county in Alabama, including that designated by the certificate required by the Constitution, and by section 7209, Code, after it has ceased to do business in Alabama? We think not. It prohibits a foreign corporation from doing business in Alabama without complying with its provisions, and then declares that such corporation may be sued in any county where it does business by agent. This court has held that when such corporation has thus designated a place and an agent residing there, section 232, Constitution, prohibits suits against it in counties where it is not doing business. Sullivan v. Sullivan Timber Co., 103 Ala. 371, 15 So. 941, 25 L.R.A. 543; General Motors Acceptance Corporation v. Home Loan  Finance Co.,218 Ala. 681, 120 So. 165; Tennessee Valley Oil  Gas Co. v. Martin, 224 Ala. 348, 140 So. 429. But not so as to the county thus designated on a claim arising in Alabama while so doing business. As to such claim it cannot deny that it was doing business in that county or that the agent was authorized to receive service, when the suit was begun, as we will show.
It has also been held that a foreign corporation may be sued in any county in Alabama where personal service may be had if it has not designated a known place of business and an agent for service. St. Mary's Oil Engine Co. v. Jackson Ice  Fuel Co., 224 Ala. 152, 138 So. 834, 838.
It is clear, therefore, that appellee's first contention is not in accord with our construction of section 232, Constitution.
The next contention is that it would not accord appellee due process under the Fourteenth Amendment of the Federal Constitution to sustain a suit in Alabama against a foreign corporation which is not engaged in transacting business in Alabama, at the time suit is begun, though the cause of action arose in Alabama, while it was so engaged and after it had designated a known place of business in Alabama, and an authorized agent residing there.
Undoubtedly, the general rule is that if there is personal service on a defendant, regardless of his residence, on a cause of action which arose in the state where suit is begun and service perfected, and the complaint states a cause of action within the general jurisdiction of the court, it may proceed to a final determination. Goodman v. Winter, 64 Ala. 410, 431, 38 Am.Rep. 13; Ex parte Maxwell, 37 Ala. 362, 79 Am.Dec. 62; Central R.  Banking Co. v. Carr, 76 Ala. 388, 52 Am.Rep. 339. We said in St. Mary's Oil Engine Co. v. Jackson Ice  Fuel Co., supra: "Since the decision of the Supreme Court of the United States in the case of St. Clair v. Cox, 106 U.S. 350,1 S.Ct. 354, 27 L.Ed. 222, reaffirmed in Conn. Mutual Life Ins. Co. v. Spratley, 172 U.S. 602, 19 S.Ct. 308, 43 L.Ed. 569, the law has been settled that a nonresident corporation, like a nonresident individual, is suable in any state where it may be personally served with process, if the state court has jurisdiction of the subject-matter of the suit."
In many cases there has been a discussion of the meaning of the Constitution and statute prohibiting doing business in Alabama by a foreign corporation without complying with its provisions. Many of them are in connection with the validity of its transactions without such compliance. Others relate to the effect of service on an agent of such a corporation which has not a designated place and an agent there residing; and when the question was whether such agent not so designated was duly authorized to receive service dependent upon whether he was transacting the business of defendant in such sort in Alabama, to sustain such authority.
We have not held, nor has any other court so far as we know, that if there is effectual personal service on a foreign corporation in Alabama, the court was without power to render a judgment because defendant was a foreign corporation not doing business in Alabama, if the cause of action arose in Alabama.
Confusion has arisen from expressions in some of the cases to the effect that to justify service on an agent of such corporation in Alabama, the corporation must be *Page 152 
doing business here. But such expressions were made in all cases in connection with a discussion of whether the agent was duly authorized to receive service to be personal on the foreign corporation. In none of them was it necessary when the agent was otherwise duly authorized to receive personal service that the foreign corporation shall be doing business in Alabama when sued on a cause of action which arose in Alabama. And it is immaterial whether the cause of action arose in Alabama or not under section 5691, Code, if the agent who was served was when served duly authorized to receive service as to that action. If he was the agent designated by section 7209, Code, and the cause arose in Alabama, before it withdrew from the state, it is sufficient; but if the agent was duly authorized to be served in Alabama, the court has jurisdiction regardless of where or when it arose.
In Jefferson Island Salt Co. v. E. J. Longyear Co., 210 Ala. 352,98 So. 119, 122, the question was whether Cowin on whom service was had was such an agent as that in that suit, and on that cause of action it was effectual to be due process in a personal transitory claim which arose outside the state of Alabama. Cowin had been designated the statutory agent under section 7209, Code, and his authority had not been withdrawn, but defendant was not doing business in the state when suit was filed. It was there said that by so doing, defendant "impliedly submitted itself to the jurisdiction of the courts of this state upon the service of process upon its designated agent and, in effect, admitted doing business in the place designated as essential to the venue of an action against it, and it was therefore suable and subject to the service of process at the place and upon the agent so named upon all causes of action arising in this state until it filed a new declaration of abandonment or change as required by said above-quoted provision. This implied assent, however, is confined to transactions or causes of action arising in this state and not those arising in other states. Simon v. So. R. R. Co.,236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492; Old Wayne Association v. McDonough, 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345; N.Y. R. R. Co. v. Estill, 147 U.S. 591, 13 S.Ct. 444, 37 L.Ed. 292."
It was held that the statutory designation applied only to causes of action arising in Alabama, and not elsewhere (as held in Central R.  Banking Co. v. Carr, 76 Ala. 388, 52 Am.Rep. 339), and since that suit did not arise in Alabama, it was not suable in Alabama by serving such statutory agent, unless it was otherwise shown to be personally present in Alabama, by transacting business here. The designation of the agent only admitted its presence and his authority in respect to suits arising here, and his authority did not by such designation alone otherwise extend. So that the designation did not justify a personal judgment without other evidence.
In 45 A.L.R. 1447, it is said: "By the great weight of authority, if a statute requires as a condition precedent to the doing of business in the state by a foreign corporation that it shall designate an agent in the state on whom process may be served in actions against it, the withdrawal of the corporation from the state does not revoke the authority of the agent to receive service in an action on a liability arising in the state out of business done by the foreign corporation therein." But it is said, on page 1454, that since the statute was for the benefit of persons dealing with the corporation during the time when it was authorized to do business in the state, the authority of the designated agent continues after withdrawal of the corporation from the state only in favor of those for whose benefit the statute was made. This rule seems to be fully recognized. 12 R.C.L. 113, § 89; 21 R.C.L. 1344, § 94; 14-a Corpus Juris, 1377.
In Gaboury v. Central Vermont Railway Co., 250 N.Y. 233,165 N.E. 275, 276, it was said that a foreign corporation to be subject to service must have so acted as to have subjected itself to the jurisdiction of the state. It does so when it is doing business in the state. But not so if it is no longer doing business, subject to an exception that "if the cause of action is so related to business previously done as to make it unjust or unreasonable to counteract the earlier submission by nonuser or withdrawal." The summons was served in that case on a director of the company residing in New York on a cause which arose in Vermont. The suit was begun after the railroad was put in receivership, and was then being so operated. The service was not on a designated agent on a cause of action which arose before withdrawal from the state. But it was on a director residing in New York and the corporation was not transacting any business there by him as *Page 153 
its agent or officer. Not being on any business of the company, it was not in the scope of his authority to receive service.
In Mutual Reserve Fund L. Ass'n v. Phelps, 190 U.S. 147,23 S.Ct. 707, 709, 47 L.Ed. 987, cited by Judge Cardozo to sustain his exception to the rule noted above, the court was dealing with a Kentucky statute by which a foreign corporation must consent that service upon any agent of the company in that state or the commissioner of insurance shall be a valid service upon the company. The Kentucky court had pointed out that there was no express limitation, and any limitation must be supplied by implication, and held that as to contracts made in the state there was no implied limitation. The United States court approved the construction, holding such statutes to mean that "foreign corporations engaging in business within its limits shall submit to controversies growing out of that business to its courts." The principle is emphasized, but differentiated, in Provident Sav. L. Assur. Soc. v. Kentucky, 239 U.S. 103,36 S.Ct. 34, 60 L.Ed. 167, L.R.A. 1916C, 572, and in Hunter v. Mutual Reserve L. Ins. Co., 218 U.S. 573, 31 S.Ct. 127,54 L.Ed. 1155, 30 L.R.A.(N.S.) 686.
It seems that Louisiana and Montana are the only states which have adopted a different rule. 45 A.L.R. 1456.
In Philadelphia  Reading R. Co. v. McKibbin, 243 U.S. 264,37 S.Ct. 280, 61 L.Ed. 710, the court said that "a foreign corporation is amenable to process to enforce a personal liability, in the absence of consent, only if it is doing business within the state * * * [so] that it is [personally] present there." The summons was served on defendant's president as he was passing through the state on personal business. So that unless defendant was otherwise engaged in business in the state there was no personal service.
In Ford Motor Co. v. Hall Auto Co., 226 Ala. 385,147 So. 603, it does not appear that the agent served with process had been so designated under section 7209, Code. The agent served was incidentally passing through the state. The question was whether service could be had on him. The opinion followed the McKibbin Case, supra, and was similar to it. There was no consent that a certain named person be an authorized agent. That case was in line with others through the country.
In Cowikee Mills v. Georgia-Alabama Power Co., 216 Ala. 221,113 So. 4, the question was whether the service was personal and provided due process under the Fourteenth Amendment. The court held that after defendant had withdrawn the authority of its agent and ceased to do business in Alabama, it could not be bound personally either by service on such agent or the Secretary of State. The question was not whether there was any fundamental want of jurisdiction because not doing business in Alabama, when duly served, but whether there was due and effectual personal service.
Such is not the question we are dealing with. Personal service here is not denied. The principle declared in that case must be considered in the light of the question before the court. There was no consideration given to the exception of the general rule there declared, because the record did not show a case for its operation. We have examined the original record and find neither the complaint nor the motion or pleas in abatement showed that the contract was made in Alabama, or that it was after the defendant had qualified by designating the agent who was served.
That case followed the general principle, since there was no occasion to refer to the exception. We find in none of our cases a holding that a foreign corporation cannot be sued in Alabama on a claim which arose here, when effectually served here on its designated agent, though it is not engaged in business here when sued. And it is not so held in most other states.
Whatever may be the effect of the receivership otherwise, it does not ipso facto destroy the authority of the designated agent to receive service of process on causes which arose in Alabama before the receiver was appointed. The appointment of a receiver is no bar to a suit against the wrongdoer if service is duly perfected. Ohio  Miss. Ry. Co. v. Nickless,71 Ind. 271; High on Receivers, § 397, pp. 552, 554, 555, note 71; 51 Corpus Juris, 963, note 96.
Section 56 of 45 U.S.C.A. provides that: "Under this chapter an action may be brought in a district court of the United States, in the district of the residence of the defendant,or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. The jurisdiction of the courts of the United States * * * shall be concurrent with that of the courts of the several States." 45 U.S.C.A. p. 531. *Page 154 
We have then personal service and jurisdiction of the subject-matter in the circuit court of Montgomery county. Nothing else is lacking for due process or any other constitutional requirement.
The original opinion has been withdrawn, and this opinion substituted for it.
Reversed and remanded.
ANDERSON, C. J., and BOULDIN, BROWN, and KNIGHT, JJ., concur.
GARDNER and THOMAS, JJ., dissent.