Court Opinion

ID: 3504866
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:14:55.79129+00
Date Added: 2024-06-11T12:54:48.458610
License: Public Domain

1 Reported in 250 N.W. 186.
Certiorari granted by United States Supreme Court December 11, 1933. 290 U.S. ___, 54 S. Ct. 228, 78 L. ed. 251.
Plaintiff appeals from an order vacating service of the summons and a simultaneous levy under writ of attachment.
Plaintiff is a. Delaware corporation, with its principal office in Minneapolis, Minnesota. Defendant also is a Delaware corporation, with its principal office at Cleveland, Ohio. As a private *Page 508 
carrier, it operates a line of freight ships on the Great Lakes, almost wholly in interstate traffic. The gist of plaintiff's alleged cause of action is that about January 1, 1930, at South Chicago, Illinois, defendant stored for it in one of its ships, the W. C. Richardson, a large cargo of wheat; that the grain was kept in storage until May, 1930, and then transported by defendant to Buffalo, New York; that it was in good order when delivered aboard the Richardson, but that during the course of storage at South Chicago and transportation thence to Buffalo it was damaged, through the negligence of defendant, in the sum of nearly $20,000.
Defendant has no office or agent and does no business in or local to Minnesota. Occasionally it discharges interstate cargoes at Duluth. Jurisdiction of it was attempted to be gained as follows: July 1, 1932, one of defendant's ships, theC. Russell Hubbard, entered the Duluth-Superior harbor from Lake Superior through the Wisconsin entrance and docked at Allouez, Wisconsin, for the purpose of discharging, there a cargo of coal. During that operation a deputy sheriff of St. Louis county boarded the vessel and served upon the ship's master, Captain Gentz, as agent of defendant, the summons in this action, at the same time levying upon the ship under writ of attachment.
On motion of defendant, both service of the summons and levy were vacated upon the ground, not that the service of summons and attachment in the manner indicated were, but that the prosecution and trial of the action in St. Louis county would be, a violation of the commerce clause of the federal constitution, under the rule of Davis v. Farmers Co-op. Equity Co. 262 U.S. 312, 43 S. Ct. 536, 67 L. ed. 996.
The propriety of the order upon the ground stated is the only thing for our consideration. We affirm, for in our judgment it comes squarely within the theory of the controlling decisions of the Supreme Court of the United States. In the Davis case,262 U.S. 312, 313, 43 S. Ct. 556, 67 L. ed. 996, a statute of Minnesota (L. 1913, p. 274, c. 218, G. S. 1913, § 7735), authorizing service of summons upon a foreign corporation by service upon any agent in this state *Page 509 
"for the solicitation of freight and passenger traffic or either thereof over its lines outside of this state," was held unconstitutional in application to a foreign railroad company having no trackage in the state. Referring to the fact that the jurisdiction thus sought to be acquired was "not limited to suits arising out of business transacted within Minnesota" but was asserted by the statute "whatever the nature of the cause of action, wherever it may have arisen, and although the plaintiff is not, and never has been, a resident of the state," the court [262 U.S. 315] held that the resulting burden imposed upon interstate commerce was so serious and unreasonable that the statute was obnoxious to the commerce clause. The unlawful burden so imposed was found in the subjection of interstate carriers to litigation in states and jurisdictions far remote from that in which the cause of action arose, thereby causing absence of employes from their customary occupations and so impairing efficiency and economy of operation. That was considered offensive to "orderly, effective administration of justice," which was the "paramount" desideratum.
The record does not show that plaintiff will be unduly hampered by trying this action in Illinois or Ohio or New York, in one or more of which the cause of action arose and the underlying contract was made and more or less performed. The record does show (at least it was an issue of fact, decided for defendant below, the decision being controlling upon us) that defendant would be greatly harassed by having to defend the action in Minnesota. Aside from the fact that it never does or solicits business here, other than discharging interstate cargoes at Duluth, all or nearly all of its officers are in Cleveland, Ohio. None of them are in this state. The record indicates, and it was so taken below, that numerous witnesses with knowledge of the facts would be needed by defendant. Doubtless many of the same witnesses will be wanted by plaintiff. But all of them reside at or east of Chicago, except that one or more members of the crew of the Richardson are said to reside at Milwaukee, Wisconsin. Taking the issue of fact presented by the affidavits, for and against the motion, as decided by the trial court, *Page 510 
we are wholly unable to see why the further prosecution of this cause in Minnesota would not burden interstate commerce as much and in the same manner, and generally to the same extent, as the statute invalidated by the Davis case.
We do not forget that plaintiff has a corporate residence in Minnesota, or that, although a foreign corporation, its principal office is here. That circumstance tends to reduce its unreasonableness, but it does not at all lessen the burden to interstate commerce which would result from the prosecution of this action in Minnesota. The Davis case is not the last word on the subject. The same result was reached, and for the same reasons, in A. T.  S. F. Ry. Co. v. Wells, 265 U.S. 101,44 S. Ct. 469, 68 L. ed. 928; Michigan Cent. R. Co. v. Mix,278 U.S. 492, 49 S. Ct. 207, 209, 73 L. ed. 470; D.  R. G. W. R. Co. v. Terte, 284 U.S. 284, 52 S. Ct. 152, 153, 76 L. ed. 295. The Terte case was one in prohibition, commenced in the supreme court of Missouri, to prevent the prosecution in the courts of that state of an action by one Curtis, "then residing in Missouri." As against one of the defendants in that action (the Atcheson, Topeka,  Santa Fe Railway Company) it was held that prohibition was properly denied because it had trackage and was doing a substantial business in Missouri. But the other defendant (the Denver  Rio Grande Western Railroad Company) was held entitled to prohibition against proceedings in the state court because it "neither owns nor operates any line in Missouri," although employing local agents there for soliciting traffic. It was as much, but no more, out of Missouri in a physical sense and for all business purposes as the defendant in the instant case is out of Minnesota. The prosecution of the Curtis case against the Rio Grande in Missouri would have been no more of a burden upon interstate commerce than would be the prosecution of this one in Minnesota. Curtis, as far as the opinion discloses, was a bona fide resident of Missouri, although the accident for which he sought damages had occurred in Colorado. So, the cause of action having accrued in another state, the single fact of the plaintiff's residence in the state of the forum was held insufficient to make the resulting burden on *Page 511 
interstate commerce of the suit in Missouri sufficiently reasonable to avoid the interdiction of the commerce clause. We think that case controlling here as against the argument for plaintiff that its corporate residence in Minnesota is sufficient for us to remove the case from the doctrine of the decision in Davis v. Farmers Co-op. Equity Co. 262 U.S. 312,43 S. Ct. 556, 67 L. ed. 996.
There is nothing in Missouri ex rel. St. L. B.  M. Ry. Co. v. Taylor, 266 U.S. 200, 45 S. Ct. 47, 48, 69 L. ed. 247, 42 A.L.R. 1232, or Hoffman v. Missouri ex rel. Foraker,274 U.S. 21, 47 S. Ct. 485, 71 L. ed. 905, to enable us to sustain jurisdiction. The Taylor case was on claims for damage to freight. That the plaintiff was a resident of Missouri, where the action against which prohibition was sought was commenced, was but one, and not the main, circumstance distinguishing the situation from that now present. The decision [266 U.S. 207] emphasized that "the shipment out of which the cause of action arose was of goods deliverable in Missouri; and, for aught that appears, the negligence complained of occurred within Missouri." In the Hoffman case [274 U.S. 22] prohibition against the further prosecution in Missouri of a personal injury action was held properly denied because the case was brought not only "in a county traversed by the railroad, in which it had an office and an agent for the transaction of business," but also because the defendant "railroad is a Missouri corporation." The Davis case was distinguished, not because of anything concerning the plaintiff, who was a resident of Kansas, but because of the status, in respect to the suit, of the defendant. The defendant railroad, the court said [274 U.S. 22], "is not a foreign corporation; it is sued in the state of its incorporation. It is sued in a state in which it owns and operates a railroad. It is sued in a county in which it has an agent and a usual place of business. It is sued in a state in which it carries on doubtless intrastate as well as interstate business."
That residence of a plaintiff is not of controlling importance is emphasized, implicitly but significantly, in the Mix case, 278 U.S. 492, 49 S. Ct. 207, 73 L. ed. 470, where it was held that a Michigan railroad corporation could not be sued in Missouri by the widow *Page 512 
of one of its former employes killed in its service in Michigan, although the widow had become in the meantime a resident of Missouri. We do not attach importance one way or the other to a residence acquired under such circumstances. The significant thing is that the Taylor and Hoffman cases were distinguished not at all upon the ground of residence or nonresidence of the plaintiff. The former was commented upon as one where [278 U.S. 495] "it appeared that the shipment out of which the cause of action arose was of goods deliverable in Missouri"; and also "that the negligent acts complained of may have occurred within the state." The Hoffman case was referred to as one where the defendant railroad "was organized under the laws of the state, and operated a part of its line in the county in which the action was brought." That last comment sufficiently distinguishes our own case of Boright v. C. R.I. P. Ry. Co. 180 Minn. 52, 230 N.W. 457. There we held that in a suit by a nonresident jurisdiction was properly retained of a foreign railroad company which, although interstate in character, owned and operated 280 miles of trackage in this state.
Because, under the controlling decisions above mentioned, the further prosecution of this action would result in a serious and unreasonable burden upon interstate commerce, and because plaintiff's corporate residence here as a domiciled foreign corporation is not sufficient to make the burden so imposed a reasonable one, the order appealed from must be and is affirmed.