Parker v. Central of Georgia Ry. Co. , 233 Ala. 149 ( 1936 )

This cause was originally assigned to the writer, and an opinion prepared which failed to meet the approval of the court when considered in consultation, but the opinion by Mr. Justice BOULDIN was accepted in lieu thereof. The writer, stating briefly his views, contrary to the prevailing opinion, concluded not to dissent, yielding his views in a specially concurring opinion. But upon a reconsideration of the question, the writer has concluded that, as the majority opinion is so contrary to the rule of law as he understands it, and out of harmony with expressions of our own cases, as well as the well-considered opinion of the Court of Appeals of New York, hereinafter noted, and the logic of the situation as well, a dissent more properly expresses his conviction, and he therefore withdraws the special concurrence heretofore entered. The opinion originally prepared, therefore, is herein set out as expressive of his dissenting views, and is as follows:

This is a personal action, under the Federal Employers' Liability Act (45 U.S.C.A. § 51 et seq.), against the defendant railway company, and the result of the appeal turns upon the question of the correctness of the trial court's ruling relating to the pleas in abatement interposed and held sustained by the agreed statement of facts.

The accident occurred November 21, 1932, in the county of Talladega. On December 19, 1932, a receiver for defendant railway company was appointed by the federal court, and since that date all the assets and properties of defendant in Alabama and elsewhere have been in the exclusive custody, control, management, and possession of said receiver, and defendant's railroad and business have been operated, possessed, and controlled exclusively by said receiver. The agreed statement of facts further shows that since said date "the defendant Central of Georgia Railway Company, as a corporation, has not exercised any corporate functions or done any business of any kind by agent or otherwise in any county in the state of Alabama, and in fact has done no business in any place, but its railroad and business have been operated and conducted only by the said receiver under and by virtue of the said decrees."

Defendant is a foreign corporation, and on and prior to the date of the accident, and until December 19, 1932, was doing business in Alabama as a foreign corporation, and had complied with the statute (section 7209, Code 1923), enacted as a complement to section 232 of our Constitution, by filing with the Secretary of State an instrument in writing designating the city and county of Montgomery as its known place of business, and naming its authorized agent residing thereat. There has been no withdrawal or amendment or any action taken by defendant with reference to said instrument filed with the Secretary of State.

Appellant's counsel lay some stress upon this latter fact, and note a conflict of the authorities as to whether or not effective service may be had on an agent of the corporation, though in receivership (note, 9 A.L.R. 228; 14-a Corpus Juris, 978), and also those authorities holding that under certain conditions suit may be maintained against the corporation, notwithstanding the appointment of a receiver (14-a Corpus Juris, 985; note, 8 A.L.R. 441), and that such appointment did not dissolve the corporation. State v. Bradley, 207 Ala. 677,93 So. 595, 26 A.L.R. 421.

There is argument also to the effect defendant was subject to franchise tax as a foreign corporation, notwithstanding the receivership.

All of these questions we may leave to one side and undetermined, for the reason we entertain the view the lower court's ruling is well sustained upon the broad and fundamental ground that defendant, a foreign corporation, was not engaged in business in this state when the suit was instituted.

Our decisions are to the effect that section 232 of our Constitution is self-executing and restrictive in its operation. The Sullivan Case, 103 Ala. 371,15 So. 941, 943, 25 L.R.A. 543, was to the effect that the doing of business in the state by such foreign corporation at the time of the service was the essential fact rendering it liable to a personal action; the court saying: "But it must be observed that the essential fact upon which the liability to suit in other counties depends is that it 'does business' in such counties; as the essential fact rendering it liable to a personal action in the courts of the state prior to the constitution was that it was doing business within the state." See, also, Philadelphia Reading Railway Co. v. McKibbin,243 U.S. 264, 37 S.Ct. 280, 61 L.Ed. 710; People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587, Ann.Cas. 1918C, 537; Consolidated Textile Corporation v. Gregory, 289 U.S. 85, 53 S.Ct. 529, 77 L.Ed. 1047.

The Sullivan Case, supra, was re-affirmed in General Motors Acceptance Corporation v. Home Loan Finance Co., 218 Ala. 681,120 So. 165; and the cases of Ford Motor Co. v. Hall Auto Co., 226 Ala. 385, 147 So. 603, 605, and Cowikee Mills v. Georgia-Alabama Power Co., 216 Ala. 221, 113 So. 4, 6, are to like effect.

In the Ford Motor Company Case, supra, is found the approved definition of "doing business" to the effect that the act must constitute "a doing of some of the works," and "an exercise of some of the functions for which the corporation was created" to do. "To constitute doing business, the acts done must be done in the 'exercise of corporate functions,' and be distinguishable from acts 'done merely within corporatepowers.' "

And in Cowikee Mills Case, supra (here much in point), Lewis v. International Insurance Co., 198 Ala. 411, 73 So. 629 (cited by appellant), is distinguished, and it was clearly pointed out that the Lewis Case dealt with a statute peculiarly applicable to insurance companies, and not to foreign corporations generally.

Appellant's counsel distinguish their case from that of Cowikee Mills, supra, upon the point that in the latter the foreign corporation not only ceased to do business in the state, but had filed in the office of the Secretary of State its declaration of withdrawal from the state, while in the instant case no such action was taken.

But we find no requirement in the statute (section 7209, supra) for the filing of any withdrawal declaration upon the foreign corporation ceasing to do business in the state. The language there clearly has reference to a change of the location of its principal place of business in the state, or change as to the designated agent. Nothing is said as to the matter of withdrawal from the state and any requirement in that regard.

Argument to the contrary would render the statute somewhat similar in effect to our statutory provision as to foreign insurance companies dealt with in Lewis v. International Insurance Company, supra, and wherein it was specifically noted that no similar statute existed as to corporations generally, which we considered a matter worthy of legislative consideration. The Lewis Case clearly discloses that we interpreted the present statute then as we do now, though as a matter of precaution it seems the corporation did file a withdrawal declaration.

Appellant is of the impression a different interpretation was given section 7209 of the Code in Jefferson Island Salt Co. v. E. J. Longyear Co., 210 Ala. 352, 98 So. 119; but we do not read that opinion to that effect. That case involved litigation between two foreign corporations as a cause of action arising outside the state, and the holding was that the above cited statute had no application, but was confined in its operation and effect to actions arising in Alabama. In discussing the statute as to these latter instances, the opinion merely refers to the language of the statute, and makes no reference to a withdrawal from the state and any necessity to file a declaration to that effect.

It would appear, therefore, that our cases are in harmony upon the matter of construction of the statute to the effect no declaration of withdrawal is therein required. In the Jefferson Island Salt Company Case, supra, the matter of doing business in the state was a question of fact.

But there is here no question of fact to be ascertained. The agreed statement of facts sets that matter at rest, and is directly to the effect that defendant was not so engaged in business in this state. Its property of every character was in possession of the receiver, by whom the business was being operated.

As to the receivership, this court, in Atlanta, Birmingham Atlantic R. Co. v. McGill, 194 Ala. 186, 69 So. 874, approvingly quoted Mr. High in his work on Receivers to the effect that the "receiver's possession is not the possession of the corporation, which cannot control either the receiver or his employees," and the opinion contains the further statement, a self-evident fact we may add, that the "corporation was not operating the road, * * * but it was then being operated by the federal court through its receiver."

The effect of receiverships, so involving questions of this character, was stated by the New York Court of Appeals in Gaboury v. Central Vermont R. Co., 250 N.Y. 233, 165 N.E. 275,277, in an opinion by Justice Cardozo. The court observed:

"Broadly speaking, * * * submission to the jurisdiction is dependent upon presence within the state, and presence within the state imports the use of corporate power by corporate representatives. * * *

"At the time of the service, the defendant, though not dissolved, was not acting as a corporation within the limits of this state. The director who received the summons did not represent it in this state in any of its corporate functions, nor was he here in that behalf. * * * On the contrary, an order had been made whereby he was forbidden to interfere with the receivers who had supplanted him and his associates in the transaction of its business. 'The possession and control of the receivers constituted * * * an ouster of corporate management and control, with the accompanying advantages and privileges, * * * The director was no longer an embodiment or symbol of the corporate personality, any more than he would have been if shorn of his title as well as of his power."

The holding was that the receivers were operating the business of the road as principals, and not as agents of the corporation, and that so far as the state of New York was concerned, the situation was the same as if the company had withdrawn from the state or transferred the business to another.

We conclude that such was also the effect of the receivership in the instant case, and that the defendant was not doing business in Alabama when this suit was instituted, but that the corporate management had been ousted and the business conducted entirely by the receiver, who operates the road as principal and not as defendant's agent.

In this state, as in New York, submission to the jurisdiction is dependent upon presence within the state (Cowikee Mills v. Georgia-Alabama Power Co., supra; Gaboury v. Central Vermont R. Co., supra), and, as held in the latter case, presence within the state imports the use of corporate power by corporate representatives. If the reasoning of the New York court is sound (and we are so persuaded), the Gaboury Case, supra, clearly demonstrates that the complete possession, control, and operation of defendant's property by the receiver had in fact constituted an ouster of corporate management and control, with the logical result that the defendant was not doing business in this state, though undissolved and its properties situate here. Sullivan's Case, supra. This constitutes, in our opinion, a full answer to appellant's argument.

We think, therefore, the conclusion is inescapable from the agreed facts stated, that this defendant was not doing business in Alabama, and therefore not subject to suit in this State. This essential fact lacking, the abatement pleas were therefore properly held sustained by the proof, and the judgment for defendant correctly entered in the court below.

The argument to the contrary, as we view it, rests in its essence upon the matter of inconvenience placed upon plaintiff to bring suit at the domicile of defendant, rather than here. But like inconvenience was also present in the Cowikee Case, supra, and in all others where the holding was that the foreign corporation was not doing business in this state, and therefore not here subject to suit. Here, confessedly, defendant is not doing business in this state, and the logic of all the cases leads to the one conclusion that it is not subject to suit, and the matter of inconvenience involved is but an incident. Such was the line of reasoning of the New York Court of Appeals in the Gaboury Case, supra, which appears to us entirely sound.

Since the foregoing was written, the cause was again considered, with the result that the original opinion by Mr. Justice BOULDIN was withdrawn and the opinion by Mr. Justice FOSTER was substituted therefor, which now becomes the opinion of the court.

This latter opinion rests the result of reversal upon an entirely different theory, which I have carefully considered. But I am persuaded such result is reached by overturning the long established interpretation of our statute, as disclosed in numerous decisions. In Ford Motor Co. v. Hall Auto Co.,226 Ala. 385, 147 So. 603, 605, is the following expression, which we think will in substance be found in all of our decisions on the subject, from the earliest to the present time, to wit: "Whether the corporation was doing business within the state, and whether the person served was an authorized agent, are questions vital to the jurisdiction of the court."

And in Lewis v. International Ins. Co., 198 Ala. 411,73 So. 629, and Cowikee Mills v. Georgia-Alabama Power Co., 216 Ala. 221,113 So. 4, 6, the court took the pains to point out the difference in the statute as applicable to insurance companies involved in the Lewis Case, and the statute in reference to corporations generally involved in the Cowikee Mills Case. The former has language upon which the consent of the corporation to suit notwithstanding its withdrawal may be rested. But the latter statute has no such language, and the inadequacy of such statutes was referred to by the Supreme Court of the United States in Mutual Reserve Fund Life Ass'n v. Phelps,190 U.S. 147, 158, 23 S.Ct. 707, 47 L.Ed. 987, quotations from which may be found set out in the Cowikee Mills Case.

The present prevailing opinion now interprets this latter statute as to corporations generally as having the same effect as the statute in reference to insurance companies, and in effect obliterates all distinction between the two. But we have too long adhered to the construction as given in the Ford Case, supra, and the statute re-enacted without substantial change. And I think it may be safely said that the bench and bar of this state have accepted this as the settled construction of this statute.

In St. Mary's Oil Engine Co. v. Jackson Ice Fuel Co.,224 Ala. 152, 138 So. 834, 839, the writer of the opinion carefully pointed out the proof tending to show that the agent served with process was at that time engaged in business for defendant corporation, saying: "And he was engaged in and about the duties of his agency when served; that this service on said Hucke was authorized by the statute, and this service in connection with the fact that the defendant was doing business in Alabama constituted due process of law."

With so settled a construction of our statute, resort to other jurisdictions for construction of statutes of varying language is entirely unnecessary. Many of the cases noted in 45 A.L.R. p. 1447, will be found to have reference to statutes with language of similar import to that of our own concerning insurance companies, and are therefore not here in point. And we think it clear that the exception referred to in the Gaboury Case, supra, bore relation to such character of statute, as the citation of Mutual Reserve Fund Life Ass'n v. Phelps, supra, indicated.

But after all, as said in Frazier v. Steel Tube Co., 101 W. Va. 327, 132 S.E. 723, 725, 45 A.L.R. 1442, the question "must depend upon a reasonable construction of the statute permitting foreign corporations to do business in the state and providing for service of process upon them." And the uniform construction of our statute, as found in all of our decisions, should not in my opinion at this late day be departed from.

The writer of the opinion in Cowikee Mills Case, supra (also the writer here), after making note of the provisions of the statute as to insurance companies, pointed out that no such provisions are found in our statute as to corporations generally, and added the following suggestion: "This may present a matter worthy of the consideration of the lawmaking body, but we are here concerned only with the statute as written." These observations are equally applicable now. The suggestion of any change in the statute passed without any legislative recognition of the matter, and the material distinction between the two statutes remains unaltered.

As indicated in the Cowikee Case, supra, I may confess a sympathy with the purpose of the majority, but I am firmly persuaded it is a matter for legislative consideration, and not the courts. The court is only concerned with the statute as written and as previously interpreted. But I forego further comment.

I think the judgment should stand affirmed, and respectfully dissent.

THOMAS, J., concurs in these views.