Howard v. Chesapeake & Ohio Railway Co. , 11 App. D.C. 300 ( 1897 )

Mr. Justice Shepard

delivered the opinion of the Court:

The judgment appealed from can not be sustained upon the ground that the court below had no jurisdiction over the defendant, because it was a foreign corporation. The marshal’s return of service upon C. EL Chapin, agent of the defendant in the District of Columbia, follows the statute providing for the service of process upon foreign corporations (R. S. D. C., Sec. 790), and makes a prima jade case of “doing business in the District” as well as of the agency of the party so served. The defendant’s pleas raised the only points in respect of the jurisdiction of the court that could operate in a case like this, namely, that the court had not acquired jurisdiction of the foreign corporation because it was not doing business in the District of Columbia at the time of the service of the writ; and the party served as its agent therein was not such an agent as to give jurisdiction through that service. Having jurisdiction of the subject-matter of the suit, the court could unquestionably render a binding judgment against the defendant, though a foreign corporation, upon service had in compliance with the provisions of the statute and founded on the existence of the conditions therein prescribed, or upon its general appearance, by competent authority, to defend the action. Goldey v. Morning News, 156 U. S. 518.

Section 790, supra, was intended merely to remedy an existing mischief by providing a simple and effectual way through which a foreign corporation doing business in the District of Columbia might be brought “before the court” and compelled to answTer. It does not undertake to limit the general jurisdiction of the courts of the District, and can not be construed as preventing their jurisdiction from attaching in any case where a foreign corporation might, like a natural person resident elsewhere, appear by competent authority and answer the cause of action.

The remarks made in Ambler v. Archer, 1 App. D. C. 94, 106, in respect of the jurisdiction of causes of action against foreign corporations must be taken in application to the’ facts of that case. As stated in the opinion; that case “ involved the question of the liability of a foreign corporation to be sued and called to account in the courts of tjiis District for and in respect of all their corporate transactions occurring in other jurisdictions.” Id., p. 99. It has been generally held, and for reasons that are obvious, that no courtQwill take jurisdiction to exercise visitatorial power over a foreign corporation, or to regulate its internal affairs. Clark on Corp. 639; Taylor Corp., Sec. 392.

The defendant had the right to appear specially, as it did in the first instance, and controvert the jurisdiction; and none of its rights were thereby waived. Goldey v. Morning News, 156 U. S. 518, 525. Consequently, when its pleas were stricken out and judgment by default rendered, it could have appealed and tested the soundness of that ruling. But instead of adopting that course, it moved the court to set aside the default, and that motion was granted upon condition that it should plead the general issue. The acceptance of the condition worked an abandonment of the pleas attacking the jurisdiction and the validity of the service of the writ, and had the court erred in striking them out, the defendant would be estopped to question the soundness of the ruling. Railroad Co. v. Brown, 17 Wall. 445, 450.

Moreover, conceding the view of the operation of the statute aforesaid contended for by the appellee, the jurisdiction of the court was, nevertheless, complete. Defendant had for years maintained an office in the District, where, represented by a resident agent, it was engaged in business. Disregarding the lease made by the defendant to the Newport News and Mississippi Valley Company, which will' be discussed later, that office and agency remained unchanged at the time of the appointment of the receiver by the courts of Virginia and West Virginia. The decrees of those courts could not operate a transfer of the property of the defendant in the District of Columbia, and the receiver appointed by them had no authority that must be respected here. Booth v. Clark, 17 How. 322; see also Brigham v. Ludington, 12 Blatch. 237, 242; Day v. Postal Tel. Co., 66 Md. 354, 360; T. & P. R. Co. v. Gay, 86 Tex. 571, 597; Filkins v. Nunnemacher, 81 Wis. 91; Farmers' and Merchants’ Ins. Co. v. Needles, 52 Mo. 17.

What has been said above must be confined to the point actually ruled, which is that the decree of the Virginia court had no effect as such within the District of Columbia, and could not itself operate a transfer of the property of the defendant situated therein. There may probably be cases in which the courts of the District would, upon application and for good cause, recognize the receiver appointed by the court of a State and permit him to become a party to litigation affecting the estate or fund or interests that might be under his management; but that question will not now be decided.

Notwithstanding, then, the appointment of the receiver, the defendant remained in existence as a corporation, not only here, but in the State of its creation also; and although it may have admitted the Virginia receiver into the occupation of its office in the District, it does not follow necessarily that it abandoned its property, ceased its corporate business entirely, discharged its former agent and left the District. The mere employment of the defendant’s general agent by the receiver did not of itself operate his discharge from its representation. There is nothing irreconcilable in his service of both the defendant and the receiver; and there was nothing to prevent them from co-operating, if they saw proper, in the management of the business. R. Co. v. Brown, 17 Wall. 445, 450; P. R. Co. v. Jones, 155 U. S. 333, 350.

2. In respect of the plea of limitation, we are of the opinion that the amended declaration, though filed more than three years after the accrual of the cause of action, did not open the case to that bar. The possession of a valid ticket over defendant’s lines of railway entitled Laura P. Howard, as holder thereof, no matter from whom purchased, to all the rights of a passenger and charged the defendant with all the ordinary duties of a common carrier. Sleeper v. Pa. R. Co., 100 Pa. St. 259. For the breach of the contract, or the failure of the duty assumed thereunder, the plaintiffs cohld declare in the form of assumpsit or in tort. We do not think it necessary to follow counsel in their critical examination of the precise nature of the form of the action as disclosed by the terms of the original and amended declarations, both of which are fairly set out in the statement of the case. It is sufficient to say that the original is in assumpsit, and that the amendment seems not to depart substantially from it. The rule in respect of amendments that prevails in our practice is both liberal and just. Magruder v. Belt, 7 App. D. C. 303, 312; Morris v. Wheat, ante, p. 201. And when an amendment shall have been made, the question whether the action has been thereby opened to the bar of limitations depends upon matter of substance. Morris v. Wheat, supra. Whether the cause of action remains the same should be the test, and the mere change from the form of action in assumpsit to one in tort would be immaterial. Smith v. Bellows, 77 Pa. St. 441.

3.. Another contention in support of the judgment is that the release under seal executed by Laura P. Howard to the Newport News and Mississippi Valley Co. was a complete bar to the action, and of itself required an instruction to the jury to find for the defendant. The ground is that under the statute defining the separate property of married women and their right of contracting and suing in respect thereof without joining the husband (R. S. D. C., Sec. 727), the right of action in this case became the separate property of the wife, and could be discharged by her separate act. No instruction was asked by either party in respect of 'this point, and it seems to have been completely ignored. It may be here remarked that even in the view of the wife’s right contended for by the defendant, the husband had an independent right to recover such special damages as he may have sustained by reason of the injury to his wife. Metropolitan Railroad Co. v. Snashall, 8 App. D. C. 435. It- is not necessary to consider whether this right of property in a cause of action for personal injury accruing in another State must be determined by the law of the forum, of the domicile of the injured party, or of the place of the contract and injury. There being no proof of the laws of Kentucky or Indiana as regards the property rights of married women, the presumption must be indulged either that the rule of the common law or that in force in the District of Columbia prevails in both those States. If it be the rule of the common law, clearly, the wife could not release the claim for damages. If it be the rule prevailing in the District, we are constrained to adopt the same conclusion. It seems to have been the general opinion of the profession that the statute did not embrace a right of action for personal injuries, and hence it was the universal rule, so far as we can now learn, to bring such suits, after the date of the act as before, in the names of both husband and wife. The question at last came before the Supreme Court of the District, in general term, in 1890, and after full consideration it was held that such a right of action was not the separate statutory property of the wife. Snashall v. Metropolitan Railroad Co., 19 D. C. 407, 411. The soundness of that decision seems not to have been questioned until the argument of this case. It has become a rule of property to as great an extent as is possible in respect of property of such peculiar character, and whilst not altogether satisfied with the reasoning by which the conclusion was reached, we think it proper to follow it in a case coming directly within it. What the rights of the wife might be under certain circumstances, as against tlie husband, will not now be inquired of; but may be regarded as open for consideration when a proper case may be presented. Nor is it material to ipquire whether, under the allegations of the declaration, the husband is not estopped to deny that the claim in suit is the separate property of the wife through his gift of the same to her; for if the right was not her separate property under the statute, she could not make a contract effective, at least, at. law, without his joining with her. Rathbone v. Hamilton, 4 App. D. C. 475, 485, 488.

4. The decision of these preliminary questions against the contention of the appellee brings us to the consideration of the points upon which the case was actually made to turn by the learned justice who presided at the trial and. directed the verdict.

(1) We are of the opinion that the evidence of H. W. Fuller respecting the contents of the ticket was rightly admitted. It is true that the absence of the ticket itself was not directly accounted for, but no objection was made on that ground. The witness was general passenger agent at the time the ticket was printed, and, whilst he had not seen that particular ticket, he was able to testify to its contents from his recollection^of the forms of ticket then in use, all of which had been prep are3~nnder h1s~direction. ^Thepemcm whosold the unused part of thetickettoTHrs. Howard produced a memorandum entry of the sale showing that the ticket was of a printed form designated as 758c. The witness Fuller produced a single trip ticket from Washington to Louisville, of that form, and then testified that the “round trip” tickets had the same designation, but with the additional term “ex.,” signifying excursion or round trip, and that their conditions were identical in all respects save one relating exclusively to the use of the return coupon. That condition has no bearing whatever upon the. case. In this state] of the evidence it was not improper to permit the witness to refer to the single trip ticket in order to refresh his memory of the piecise words printed on the excursion ticket which, with its return coupon only, Mrs. Howard had purchased and used.

(2) The ticket upon its face declared that the defendant, in selling it, assumed no responsibility beyond its own line, and acted as agent only ^reconnecting lines. In the absence of a special contract to the contrary, the selling carrier’s duty is completely discharged by safe carriage to the end of its own line where a connecting carrier may be ready to continue the transportation on the designated route. P. R. Co. v. Jones, 155 U. S. 333, 339. And in so far as the duty of the defendant is to be controlled by the terms of the contract in this case, it remained unchanged. The original purchaser was bound by these conditions, and plaintiff, holding under him, could have no better right. Therefore, if the testimony shows that the defendant and the corporation which owned the line between Lexington and Big Sandy wrnre engaged in the operation of their own lines respectively, without partnership or agreement for joint •operation beyond that of receiving and forwarding passengers upon such tickets, with separate coupbns for each line, the defendant incurred no liability to the plaintiff, and the instruction to the jury would have to be sustained. P. R. Co. v. Jones, 155 U. S. 333.

(3) From that testimony, given exclusively by defendant’s witnesses and set out in full in the preliminary statement, it appears that the road upon which the accident occurred had been built by the Elizabethtown, Lexington and Big Sandy Railroad Company under a charter from the State of Kentucky, and is wholly within that Stale. That charter authorized it to make contracts with other corporations for the operation of its railway. The Chesapeake and Ohio Railway Company, under charter from the State of Virginia, built and. operated a railway from Newport Newrs to Huntington and Big Sandy, connecting with the line of the Elizabethtown, Lexington and Big Sandy Railway Company. Collis P. Huntington, who was the principal stockholder and. the controlling spirit of each corporation, conceived a plan to bring under one management the foregoing railway lines and others into one great line of transportation from the Atlantic to the Pacific.. Beginning in 1882, trains were run over the two lines aforesaid by the name of the Chesapeake & Ohio-route, “under an arrangement by which it was practically a continuous system.” “ The properties were then operated together by one general manager, Mr. C. W. Smith, under the verbal directions of Mr. C. P. Huntington.” The terms of this “arrangement” are not given; but it appears that the defendant’s officers maintained the railway of the Kentucky corporation and kept an account of all receipts and disbursements on account of the latter. From the terms of the “arrangement” as stated, and the nature of the proceedings thereunder, we think it clear that the defendant became responsible for the safe carriage of passengers over the railway of the Kentucky corporation. P. R. Co. v. Jones, 155 U. S. 333; Sun Ins. Co. v. Kountz Line, 122 U. S. 583. The condition of a contract, therefore, confining defendant’s liability to its own line must necessarily be limited in its operation to such other connecting lines only as may have remained under their own separate and independent management. This .“arrangement” or contract for the operation of one line by the other was to extend to the latter part of the year 1887, or about one year later than the date of the injury'to Mrs. Howard. It follows, therefore, that if nothing had occurred in the meantime to change the arrangement aforesaid, the condition of the ticket would not prevent recovery in this action if the injuries received by Mrs. Howard were caused by the carrier’s negligence.

(4) The chief point of defendant’s contention is that the arrangement had come to an end prior to the accident, in so far as defendant was concerned, by the lease of its line to the Newport News and Mississippi Valley Company. The evidence in support of this contention shows that in January and June, 1886, respectively, the defendant and the Elizabethtown, Lexington and Big Sandy Railway Company had entered into contracts with the Newport News and Mississippi Valley Company for the lease of their lines for 250 years, upon an annual rental of $5,000. Collis P. Huntington signed the defendant’s lease for each company as president. Though not president of the Kentucky corporation, he controlled it absolutely. This was all done in execution of his plan for a great Atlantic and Pacific railway system. Referring to the arrangement aforesaid, under which the defendant operated the two lines of railway, the witness said: “ The organization of the Newport News and Mississippi Valley Company terminated the contract, I suppose, by force of the arrangement then made. It was terminated in the same manner it was made by direction of Mr. Huntington; Mr. Huntington directed Mr. Smith to operate the properties, as I have indicated, and upon the formation of the Newport News and Mississippi Valley Company and the execution of the leases, he directed the operation of the line to be had in accordance with these leases.” This general lessee corporation was incorporated by the Legislature of the State of Connecticut, March 27, 1884, under the name of the Southern Pacific Company, which was changed by an amendatory act, March 10, 1885, to that of the Newport News and Mississippi Valley Company. This act of incorporation is not set out in the record, and it does not appear what express powers it was authorized to exercise outside the limits of that State. One clause is given, however, which expressly forbids the power to “ make joint stock with, own, hold or operate any railroad in the State of Connecticut.”

Virtually banished from the State of its creation, this corporation came to the State of Virginia, and apparently without permission of the legislature of that State, leased and undertook to operate the railway and exorcise the franchises of the defendant. It is unnecessary to cite authorities to the point that the defendant, a grosi-public corporation of the State of Virginia could not, without the express consent of* that commonwealth, escape the performance of its duties and obligations'by a voluntary surrender of its road to a so-called lessee: Whilst the lessee might become liable for an injury done in the operation of the railway, the lessor would not be exempt by reason of its retirement therefrom. Two things mjist concur to give full legal operation to a lease by one such corporation to another, namely, the permission of the State through power expressly conferred upon each. St. Louis, etc., R. Co. v. T. H. & I. R. Co., 145 U. S. 393, 402. There is nothing in the record to show that the State of Virginia ever authorized the lease by defendant of its railway. Nor does it appear that the existence of the Newport News and Mississippi Valley Company had ever been recognized by that State, or the State of Kentucky, much less the power conferred upon it to lease and operate a railwray therein. If it had been proved that the defendant had the general power to lease its road that seems to have been conferred upon the Elizabethtown, Lexington and Big Sandy Bailway Company, and that the Newrport News and Mississippi Valley Company had the general power under its charter to lease and operate railways anywhere outside of the limits ■ of Connecticut, we could not regard this lease as exempting the defendant from liability. Notwithstanding the independent existence of our States, their mutual relations and interests and the general welfare of the Union demand that in respect of the recognition of the legislative and judicial acts of one by the others, the widest and most liberal principles of comity should prevail. There is no proper room for the exercise of a selfish or jealous spirit. But the limit is reached when one seeks to act in respect of matters peculiarly within the power of another, or in opposition to its fixed policy. Consequently, by operation of the spirit of comity, the bona fide corporations of one State have been permitted to enter the others, to maintain offices, to transact business and to maintain their rights in the courts where their business and objects have not been immoral or opposed to sound and well-defined public policy. But comity has never been stretched so far by any State as to permit the corporation of another State to exercise an extraordinary power or franchise within its boundaries, without its own express grant. And for the same reason, the courts of a State will not recognize a contract by which a foreign corporation, without express sanction of their own legislature, takes upon itself the performance of duties and powers of a public nature which have been conferred upon corporations created by the State itself for those purposes. Moreover, there is another well founded limitation upon the exercise of comity in such cases. A foreign corporation should not be recognized or tolerated in'the exercise of extraordinary powers or in carrying on business that are expressly forbidden it in the State of its creation. This general doctrine has been enounced in a well considered case by the Supreme Court of Kansas that commands our approval. Land Grant Ry. & T. Co. v. Board, Coms. Coffee Co., 6 Kans. 245; see also 6 Thomp. Corp., Sec. 7896; 2 Morawetz Corp., Sec. 965a; Wharton, Confl."Laws, Sec. 3906. Though not fully stated in the record, the charter of the lessee company show7? enough to bring it within exception to the rule of comity above stated. Discredited by its own creating legislature, specially forbidden the exercise of these very powers in its own State, and practically expelled therefrom, are other States, in the language of the Supreme Court of Kansas, “bound by any kind of courtesy or comity, or friendship or kindness, to treat this corporation better than its own creator has done ?” We think not. Had this corporation been recognized in the exercise of these powers by the Court of Appeals of Virginia, we would feel bound to follow its decision and give effect to the lease within the limits of that State; but in the absence of such a decision we will give effect to our own opinion. That the probability of such a decision by the courts of the States directly interested wgs apprehended by the controller of these corporations, is apparent from the evidence of the witness heretofore freely quoted from, who had been the general solicitor in Virginia for both the lessor and lessee. He says: “The Newport News and Mississippi Valley Company had organized and taken a number of leases from the foregoing companies when a question arose as to the provisions of the original act, which provided that the Newport News and Mississippi Valley Company should not have the power 1 to make joint stock with, own, hold or operate any railroad in the State of Connecticut.’ The amendment of April 27, 1887, added these words: ‘ Unless such railroad shall be held, owned or operated within said State in conformity with the provisions of the general laws of the State.’ ” It is not necessary to consider the effect of this amendment, because it took effect long after the accrual of plaintiff’s cause of action. The same apprehension, we may add, seems to have inspired the terms of the release obtained from Mrs. Howard, which discharged not only the said lessee by name, but also its “ lessors or predecessor companies.”

5. Having occupied so much space with a statement of the evidence upon which the case w'as submitted in Oorder that it might be fully and fairly presented, and having dwelt at some length upon the questions that required consideration and decision, we will pretermit, as unimportant as well as unnecessary, in view of the foregoing conclusions, the consideration of the general question of liability irrespective of the invalidity of the lease.

Being of the opinion, for the reasons above given, that it was error to direct a verdict for the defendant, the judgment will be reversed, with costs to the appellants, and the cause remanded with direction to set aside the verdict and grant a new trial. It is so ordered.

Reversed and remanded.