Court Opinion

ID: 3887420
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:16:44.116882+00
Date Added: 2024-06-11T14:15:31.572997
License: Public Domain

This appeal raises two questions: First, was there error on the part of his Honor, the Circuit Judge, in ruling that the magistrate did not have jurisdiction, on the ground that the defendant was a foreign corporation; and second, was there error in his construction of the act of 1903? The action was commenced in a magistrate's court.
The complaint alleges: "First. That the defendant, the Seaboard Air Line Ry. Co., is a corporation duly created and existing under and by virtue of the laws of the States of North Carolina and Virginia, with its line of railroad track extending through the State of South Carolina, Barnwell County.
"Second. That on the 10th day of June, 1903, the plaintiff herein filed a claim with the agent of the defendant at Ulmer, S.C. for one barrel of flour, the same being four dollars *Page 485 
and forty cents ($4.40), lost in transit from Nashville, Tenn., to Ulmer, S.C. the said barrel of flour having been consigned along with other flour to the plaintiff herein, from the Liberty Mills, of Nashville, Tenn., and that on the 16th day of November, 1903, the defendant paid the said claim for the loss, to wit: $4.40, but the same was not paid or refused until long after ninety days had expired from the date the said claim for shortage was filed with the said agent."
The defendant filed the following demurrer: "The defendant company, by Robert Aldrich and J.O. Patterson, jr., its attorneys, demurs to the complaint herein, upon the following ground, that it does not state facts sufficient to constitute a cause of action, in this:
"1. That it appears upon the face of said complaint, that the defendant company is a corporation created and existing under and by virtue of the laws of the States of North Carolina and Virginia, and, therefore, is a foreign corporation, and a magistrate's court has no jurisdiction of actions against a foreign corporation.
"2. That it appears from the face of said complaint that the claim of $4.40 for the barrel of flour, alleged to have been lost, has been paid by the defendant company and received by the plaintiff.
"Wherefore, the defendant demands that the said complaint be dismissed with cost."
The magistrate overruled the demurrer and rendered judgment in favor of the plaintiff, whereupon the defendant appealed to the Circuit Court upon two exceptions, assigning error, in overruling the respective grounds of demurrer. His Honor, the presiding Judge, sustained both exceptions and reversed the judgment of the magistrate. The Circuit Judge based his ruling as to the first exception on section 423 of the Code, and the case of Chafee v. Postal Tel. Co., 35 S.C. 372,14 S.E., 764.
The following are the reasons assigned by him in sustaining the second exception: "The act of 1903 provides a penalty *Page 486 
of fifty dollars for failure to adjust and pay the claims referred to in the act, within the period named, but provides: `That unless such consignee recover in such action the full amount claimed, no penalty shall be recovered.' This being a penal statute, it must be strictly construed, and the penalty provided for kept within the terms of the act; and the plaintiff having collected and received the amount of the claim prior to bringing his suit, he surrendered his cause of action for the penalty."
The assignments of error are as follows:
"1. That his Honor erred, it is respectfully submitted, in holding that a court of magistrate has no jurisdiction of an action against a foreign corporation.
"2. That his Honor erred, it is respectfully submitted, in holding that the claim of the plaintiff for property lost having been paid by the defendant and received by the plaintiff before the action was brought, the plaintiff could not maintain an action for the penalty."
We will first consider the question whether the Circuit Judge erred in ruling that the magistrate did not have jurisdiction of the defendant, on the ground that the defendant was a foreign corporation. It will be seen by reference to the acts of 1902, pages 1311, 1316, under the head of "Railroad Consolidations," that the defendant was chartered under and by virtue of the laws of the State of South Carolina, and is, therefore, a domestic corporation. Section 2055 of the Code of Laws, relative to suits against consolidated railroad companies, provides that "suits may be brought and maintained against such new companies, in any of the Courts of this State, for all causes of action in the same manner as against other railroad companies therein." Considering, however, that the Court cannot take judicial notice of the fact that the defendant is a domestic corporation, there are other reasons why the magistrate had jurisdiction.
Art. IX., sec. 8, of the Constitution, is as follows: "The General Assembly shall not grant to any foreign corporation *Page 487 
or association a license to build, operate or lease any railroad in this State; but in all cases where a railroad is to be built or operated, or is now being operated, in this State, and the same shall be partly in this State and partly in another State, or in other States, the owners or projectors thereof shall first become incorporated under the laws of this State; nor shall any foreign corporation or association lease or operate any railroad in this State, or purchase the same or any interest therein. Consolidation of any railroad lines and corporations in this State with others shall be allowed only where the consolidated company shall become a domestic corporation of this State. No general or special law shall ever be passed for the benefit of any foreign corporation operating a railroad under an existing license of this State, or under any existing lease, and no grant of any right or privilege and no exemption from any burden shall be made to any such foreign corporation, except upon the condition that the owners or stockholders thereof shall first organize a corporation in this State under the laws thereof, and shall thereafter operate and manage the same and the business thereof under said domestic charter."
Charter XLIV. of the Code of Laws sets forth the conditions upon which foreign corporations are permitted to do business in this State. Section 1793 of said chapter provides that "When a foreign corporation complies with the provisions and requirements of this chapter, it shall ipsofacto become a domestic corporation, and shall enjoy the rights and be subject to the liabilities of such domestic corporations; it may sue and be sued in the Courts of this State, and shall be subject to the jurisdiction of this State as fully as if it were originally created under the laws of the State of South Carolina." Section 1794 makes it unlawful for any foreign corporation to do business, or attempt to do business, in this State without first having complied with the requirements of said chapter, and provides a punishment for violation of said provisions.
It is true, the complaint alleges that the defendant is a *Page 488 
corporation, created under the laws of North Carolina and Virginia, but it likewise appears upon the face thereof, that the defendant is operating its railroad in Barnwell County, of this State. In 13 Enc. of Law, 895, it is said: "When a foreign corporation avails itself of the privilege of doing business in a State whose laws authorize it to be sued there, by service of process upon an agent, its assent to such service will be implied. It waives the right to object to the mode of service of process which the State laws authorize. The fact that it has not complied with a State law requiring it to appoint and designate an agent for service of process, is wholly immaterial. It is estopped by its actions from denying that it has complied with this requirement." Applying this principle to the case under consideration, the defendant is estopped from contending that it is not a domestic corporation, for if it is not a domestic corporation, then the operation of its railroad is unlawful. It would be against public policy to give effect to such contention. From the fact that the defendant is doing business in this State, the presumption arises that it has complied with the conditions upon which it was lawful for it to operate its railroad. 1 Elliott on Evidence, sec. 106; 22 Enc. of Law, 1280.
There is another reason why the magistrate had jurisdiction of the defendant. Jurisdiction is of two kinds — of the person, and of the subject matter. While jurisdiction as to the subject matter cannot be waived, the law is otherwise as to jurisdiction of the person. Martin v. Fowler, 51 S.C. 164,28 S.E., 312; Ex parte Hilton, 64 S.C. 201,41 S.E., 978. In the case under consideration, the question of jurisdiction related to the person. Ex parte Perry Stove Co., 43 S.C. 186,20 S.E., 980; Smith v. Walke, 43 S.C. 381,21 S.E., 249; Rosamond v. Earle, 46 S.C. 9, 24 S.E., 44;Bird v. Sullivan, 58 S.C. 50, 36 S.E., 494; Burckhalter v.Jones, 58 S.C. 89, 36 S.E., 495; Baker v. Irvine, 62 S.C. 293,40 S.E., 672; Garrett v. Herring, 69 S.C. 278. When the defendant demurred to the complaint on the ground that it did not state facts sufficient to constitute a *Page 489 
cause of action, for the reasons stated in the second ground of demurrer, it contested the case upon the merits to the extent of the sufficiency of the complaint. Duke v. PostalTel. Co., 71 S.C. 95. This was sufficient to subject the defendant to the jurisdiction of the Court. When the defendant raised the question of jurisdiction, it should have relied exclusively upon that objection, if it did not wish to become subject to the jurisdiction of the Court. Garrett v.Herring, 69 S.C. 278.
The first exception should be sustained.
We will next consider whether there was error on the part of the presiding Judge in ruling that the plaintiff could not maintain an action against the defendant, by reason of the fact that the claim for the lost property had been paid by the defendant, and received by the plaintiff, before the action was brought.
Sections 2 and 4 of the act of 1903, pages 81 and 82, are as follows: "Section 2. That every claim for loss of or damage to property, while in the possession of such common carrier, shall be adjusted and paid within forty days, in case of shipments wholly within this State, and within ninety days, in case of shipments from without this State, after the filing of such claim with the agent of such carrier at the point of destination of such shipment: Provided, That no such claim shall be filed until after the arrival of the shipment, or of some part thereof, at the point of destination, or until after the lapse of a reasonable time for the arrival thereof. In every case such common carrier shall be liable for the amount of such loss or damage, together with interest thereon from the date of the filing of the claim therefor until the payment thereof. Failure to adjust and pay such claim within the periods respective herein prescribed, shall subject each common carrier so failing to a penalty of fifty dollars, for each and every such failure, to be recovered by any consignee or consignees aggrieved, in any Court of competent jurisdiction: Provided, That unless such consignee or consignees recover in such action the full amount claimed, no *Page 490 
penalty shall be recovered, but only the actual amount of the loss or damage, with interest as aforesaid.
"Section 4. That causes of action for the recovery of the possession of the property shipped for loss or damage thereto and for the penalties herein provided for, may be united in the same complaint."
The proper construction of the act is that when a common carrier fails to adjust and pay the consignee's claim within the time specified by the act, it subjects itself to liability: 1st, for the amount of the loss or damage, together with interest thereon from the date of the filing of the claim therefor, until the payment thereof; 2d, for a penalty of fifty dollars for failure to adjust and pay the claim within the period prescribed by the statute, provided the consignee recovers the full amount claimed, whether in an action when necessary, or by voluntary payment on the part of the common carrier.The mode of determining whether the consignee was entitledto recover the full amount of his claim, is a mere incidentand not a condition precedent to his right to recover thepenalty. The adjustment and payment of the claim for loss of the property was not intended as satisfaction of the liability incurred as a penalty, nor did it have such effect by operation of law.
Section 4 of the act evidently contemplated the bringing of a separate action for the penalty. It seems to me that a contrary construction would sacrifice the spirit of the statute for the letter thereof, and enable a common carrier to defeat the manifest purpose of the act, after it had failed to adjust and pay the claim for loss or damage within the specified time, and when by its conduct it had shown that the consignee was entitled to the full amount claimed. The exception raising this question should be sustained.
For these reasons, I think the judgment of the Circuit Court should be reversed.
The CHIEF JUSTICE did not participate in this opinionbecause of illness. *Page 491