Jameson v. Simonds Saw Co.

Action to recover from the defendants for services" alleged to have been rendered them by the plaintiff, under employment as traveling salesman to introduce and sell their wares in this state. The Simonds Saw Company is a corporation organized under the laws of this state, and engaged in the sale of merchandise consisting chiefly of articles manufactured elsewhere. The Simonds Manufacturing Company, the appellant herein, is a foreign corporation, organized under the laws of Massachusetts, and engaged in the manufacture of saws and other articles in that state. Proof of the service of the summons upon the appellant, as set forth in the judgment-roll, was made by the affidavit of E. J. Hanson, who states: “That on the 12th day of February, 1903, at the city and county of San Francisco, state of California, he personally served the summons issued in the above-entitled action on John Simonds, the business agent of the defendant Simonds Manufacturing Company, by then and there delivering to and leaving with John Simonds, the business agent of said defendant, personally, a copy of said summons (together with a copy of the complaint); that John Simonds, the business agent of the said defendant, the Simonds Manufacturing Company, was at the time of the said service upon him, a resident of the city and county of San Francisco, state of California.” The said defendant, appearing specially for that purpose, moved to set aside and quash this service upon the ground that at the time thereof it was not doing business within this state, and that the said John Simonds was not a managing or business agent or cashier or secretary of said defendant, and that said defendant had never designated him as a person upon whom process might be served in this

At common law, jurisdiction in an action at law could not be obtained over a foreign corporation except by its voluntary appearance. Under the wide extension of business and commercial intercourse in modern days, corporations formed for such business are accustomed to establish agencies and branches in countries other than that of their creation, and it is now held by the English courts that a foreign corporation, by establishing an office in England and carrying on business there, is to be considered as a resident of England, and may bé sued in its courts. (Newby v. Colt’s Patent Firearms Co., L. R. 7 Q. B. 293; Haggin v. Comptoir d’Escompte de Paris, L. R. 23 Q. B. D. 519.) Under the system prevailing in this country, corporations are regarded as citizens of the state in which they -are created; but in other states are regarded as foreign corporations, and their right to transact business therein is subject to such conditions and restrictions as the legislatures of those states may prescribe. For the purpose of enabling their courts to acquire jurisdiction over foreign corporations statutory provisions for the service of process upon them are enacted, and must be strictly followed in order to give validity to their judgments. The residence of a corporation is within the state in which it is created, and, so long as it confines the exercise of its corporate powers within that state, it is beyond the reach of the process of courts of other states. In order that those courts may acquire jurisdiction to render a personal judgment against such foreign corporation otherwise than by its voluntary appearance, its presence in those states must be manifested by the transaction of its corporate business therein, or by such acts as will indicate the exercise therein of its corporate powers. A fundamental requisite for acquiring such jurisdiction is

By reason of the allegation in the complaint that the appellant is a foreign corporation, it became incumbent upon the plaintiff to show that at the time of the service it was doing business within the state. He alleged that fact in his complaint, but an issue thereon was created by the affidavit of the president of the appellant read at the hearing of the motion, and the burden of sustaining his allegation was therefore cast upon the plaintiff. One of the facts upon which he relied to show that the appellant was doing business in this state is that he was employed by it to sell wares, which it manufactured, and that his salary was paid by it. He was in Oregon at the time of his employment, and his employment was made by a letter written from San Francisco in the name of the Simonds Saw Company, and signed by John Simonds, who was president of that corporation, in which an offer of the plaintiff to enter the employment of the saw company was accepted. Although he testified that he was employed by the appellant, he presented no direct evidence of such employment or of any employment other than the said letter written by John Simonds, or that Simonds had any authority from the appellant to employ him. It was clearly shown that he was not employed for the appellant, but that he was employed by the Simonds Saw Company to travel as a salesman for the goods that that company carries; and while it might be held that a traveling

Another fact relied on by the plaintiff was that certain letterheads of the Simonds Saw Company were introduced in evidence, upon which was printed a list of articles of different manufactures in which it dealt, and underneath the name of the appellant was the word “Agencies,” beneath which there were printed several places of address in different states, the

The printing and use of these letterheads was the act of the Simonds Saw Company, and not of the appellant. The saw company could not thus constitute itself the agent of the appellant, nor would the knowledge of the appellant that it had so styled itself make the saw company its agent, or, in the absence of any showing that it had acted as such agent with its approval or assent, be the transaction of any business by the appellant. It is a matter of common knowledge that frequently the manufacturer of articles gives to some person or firm the exclusive right to sell such article within a designated territory, and that such person or firm styles itself the exclusive agent for the sale of such article. The goods thus dealt in by the agent are purchased by him from the manufacturer, but the manufacturer is not doing business within that territory by reason of the sale of its wares by such self-styled exclusive agent. It may be added that if the Simonds Saw Company was the agent of the appellant the service on “John Simonds” was insufficient.

Gottschalk Co. v. Distilling etc. Feeding Co. (C. C.); 50 Fed. 681 , was a case in many respects similar to the present one. In that case an Illinois corporation selected persons in different states to whom it sold ijfcs products exclusively, and whom it designated in its printed circulars as “distributing agents.” In the state of Maryland it designated one Webb as such “distributing agent,” to whom it sold its wares and by whom they were resold in that state. The Maryland code provided that any. foreign corporation which should transact business in the state should be liable to suit for any cause of action, and that process might be served upon it by service upon any agent or other person in the service of such corporation. The process in the above suit was served upon Webb, and, upon motion of the defendant, the court set aside the service upon the ground that the Illinois corporation did not transact business within the state, saying: “The defendant did not transact business in Maryland in any other sense than any foreign corporation does when it sells goods at its home office and ships to a resident of Maryland. The defendant, according to the proof, has no office in Maryland, and it has no goods in Maryland, and it receives no money in Maryland, and

In Doe v. Springfield Boiler etc. Co., supra, the contract with the defendant was entered into through one Small-man, who was a commission broker at San Francisco. Small-man procured from the corporation certain letterheads with its name and business lithographed thereon, to which he added his own place of business in San Francisco, and his name as “agent.” The contract was made by an offer of sale on the part of the corporation and an acceptance signed by the plaintiff written upon these letterheads. In a suit against the defendant the plaintiff caused the summons to be served upon Smallman, but the service was set aside upon the ground that Smallman was not a business agent of the defendant. In affirming this order the circuit court of appeal, after quoting the provisions of section 411 of the Code of Civil Procedure, said: “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 any man who does any kind of business for a corporation. 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

The judgment is reversed.

Cooper, J., and Hall, J., concurred.

A petition for a rehearing of this cause was denied by the district court of appeal on January 31, 1906.