Crain and Denbo, Inc. v. Harris & Harris Const. Co. ( 1959 )

108 S.E.2d 122 (1959) 250 N.C. 106

CRAIN AND DENBO, INC.
v.
HARRIS & HARRIS CONSTRUCTION COMPANY, Inc., and Aetna Insurance Company.

No. 305.

Supreme Court of North Carolina.

April 15, 1959.

Fletcher & Lake by I. Beverly Lake, Raleigh, for Aetna Ins. Co., appellant.

No appearance for Harris & Harris Const. Co., Inc., appellant.

Taylor, Allen & Warren by L. C. Warren, Jr., Goldsboro, and E. C. Brooks, Jr., Durham, for Crain and Denbo, Inc., appellee.

PARKER, Justice.

The Aetna Insurance Company has three assignments of error. The first two are to Judge Paul's conclusions of law Numbers One and Two, and the third is to the entry of the order. Harris & Harris Construction Company, Inc., filed no brief in this Court, but it has three similar assignments of error in the Record.

Neither of the defendants has any exception to Judge Paul's findings of fact. A reading of the Record shows that they are supported by competent evidence, and there seems to be no controversy in respect to their correctness.

Judge Paul in his order did not pass upon the question as to whether or not Wayne County is a proper venue for the trial of this action.

The jurisdiction of the Superior Court of Wayne County is not challenged. The Superior Court is one court having state-wide jurisdiction. Lovegrove v. Lovegrove, 237 N.C. 307, 74 S.E.2d 723; Rhyne v. Lipscombe, 122 N.C. 650, 29 S.E. 57.

The sole question presented for decision of this appeal by the Aetna Insurance Company is this: Does the Aetna Insurance Company have the right to have this action removed to the Superior Court of Wake County for trial?

The point here is one of venue. "The venue of civil actions is a matter for legislative regulation, and is not governed by the rules of the common law. Interstate Cooperage Co. v. Eureka L. Co., 151 N.C. [455], 456, 66 S.E. 434. It deals with procedure and is not jurisdictional, in the absence of statutory provisions to that effect." Latham v. Latham, 178 N.C. 12, 100 S.E. 131.

N.C.G.S. § 58-150 prescribes the conditions for a foreign insurance company to be admitted and authorized to do business in North Carolina. Judge Paul found as a fact that the Aetna Insurance Company has complied with the provisions of this statute, and was, at all times relevant to this action, admitted and authorized to do business in the State, which business included, among other things, the execution of indemnity bonds as surety. The Aetna Insurance Company contends that having complied with the requirements of N.C.G. S. § 58-150, and having, pursuant to this statute, designated the North Carolina Commissioner of Insurance as its agent for service of process, it thereby fixed Wake County as its residence in North Carolina for purposes of venue.

When the Aetna Insurance Company, pursuant to N.C.G.S. § 58-150(3), designated the State Commissioner of Insurance its true and lawful attorney upon whom all lawful processes in any action against it may be served, it created "a passive agency" for the service of lawful process alone, and the statute gives no authority to the Commissioner even to accept service of process for the Aetna Insurance Company. Hodges v. New Hampshire Fire Insurance Co., 232 N.C. 475, 61 S.E.2d 372. N.C.G.S. § 58-150(3) provides residents of this State a simple procedure to be followed in obtaining service of lawful process upon foreign insurance companies doing business here, and nothing more. There cannot be read into the clear language of N.C.G.S. § 58-150(3) the contention of the Aetna Insurance Company, that when it designated the State Commissioner of Insurance its agent for service of process, it thereby fixed Wake County as its residence in North Carolina for purposes of venue. If the General Assembly had so intended, as contended by the Aetna Insurance Company, it would have incorporated language to that effect in the statute.

However, when the Aetna Insurance Company complied with the provisions of N.C.G.S. § 58-150, it acquired the right to sue and be sued in the State courts under the rules and statutes, which apply to domestic corporations. Noland Co. v. Laxton Construction Co., 244 N.C. 50, 92 S.E.2d 398; Hill v. Atlantic Greyhound Corp., 229 N.C. 728, 51 S.E.2d 183; Nutt Corp. v. Southern R. R., 214 N.C. 19, 197 S.E. 534; Occidental Insurance Co. v. Lawrence, 204 N.C. 707, 169 S.E. 636; Smith-Douglass Co. v. Honeycutt, 204 N.C. 219, 167 S.E. 810. For purposes of venue, it is generally held that domesticated foreign corporations are residents of the state in which they have been domesticated. Annotation 126 A.L.R. 1510.

Provisions in our statutes "referring to suits in behalf of or against domestic corporations and foreign corporations which have submitted to domestication must be read in pari materia, subject to the limitation that domestication does not deprive the Federal courts of their jurisdiction in respect to foreign corporations." Noland Co. v. Laxton Construction Co., supra [244 N.C. 50, 92 S.E.2d 400].

The Aetna Insurance Company states in its brief: "G.S. [§] 1-80, dealing with the venue of suits against foreign corporations likewise has no application to this case. The defendant, Aetna Insurance Company, has been domesticated in North Carolina since 1901. It is, therefore, treated as a domestic corporation for purposes of venue."

Hill v. Atlantic Greyhound Corp., supra [229 N.C. 728, 51 S.E.2d 184], was a transitory action, as this instant case is a transitory action, heard on a motion to remove the action to Forsyth County for trial. Plaintiff was a non-resident of North Carolina. Defendant is a foreign corporation duly domesticated in this State, with its principal place of business in this State, in Winston-Salem, North Carolina. The Court said: "The plaintiff contends that, inasmuch as defendant is a foreign corporation, venue in this cause is controlled by G.S. § 1-80. The defendant insists that for the purpose of suing and being sued the defendant is in effect a domestic corporation and the proper venue for the trial of this cause is the county of its residence. G.S. §§ 1-79, 1-82. The contention of the defendant must prevail. * * * Since the plaintiff is a nonresident and the defendant, for the purposes of this action, is a resident of Forsyth County, G.S. § 1-82 is controlling and Forsyth County is the proper venue for the trial of this cause." When the Hill case was decided N.C.G.S. § 1-79 read: "For the purpose of suing and being sued the principal place of business of a domestic corporation is its residence."

The General Assembly in 1951 Session Laws, Chapter 837, amended G.S. § 1-79 to read as follows: "For the purpose of suing and being sued the principal office of a domestic corporation, as shown by its certificate of incorporation pursuant to G.S. 55-2, is its residence." In Howle v. Twin States Express, Inc., 1953, 237 N.C. 667, 75 S.E.2d 732, 736, the Court said: "And the words `principal place of business', as so used in the statute, G.S. § 1-79, are regarded as synonymous with the words `principal office' as used in the statute G.S. § 55-2 requiring the location of the principal office in this State to be set forth in the certificate of incorporation by which the corporation is formed."

This Court said in Noland Co. v. Laxton Construction Co., 1956, supra [244 N.C. 50, 92 S.E.2d 400]: "The location of the principal office and place of business of a corporation is a fact. The instrument a foreign domesticated corporation is required to file in the office of the Secretary of State, G.S. § 55-118, is merely notice of that fact. It is not required for the benefit of the corporation but for the information of the public. And it does not, in and of itself, fix the location of the place of business of the corporation which files the same." The Noland case does not involve a foreign insurance company.

G.S. § 1-79, as rewritten by the 1957 General Assembly, now reads: "For the purpose of suing and being sued, the residence of a domestic corporation is as follows: (1) Where the registered office of the corporation is located. (2) If the corporation having been formed prior to July 1, 1957 does not have a registered office in this State, but does have a principal office in this State, its residence is in the county where such principal office is said to be located by its certificate of incorporation, or amendment thereto, or legislative charter."

G.S. § 58-150 does not require a foreign insurance corporation desiring to be admitted and authorized to do business in North Carolina to file a statement in the office of the Commissioner of Insurance setting forth its "principal place of business" or "principal office" or "a registered office."

N.C.G.S. § 1-82 reads in part: "In all other cases the action must be tried in the county in which the plaintiffs or the defendants, or any of them, reside at its commencement."

In North Carolina Joint Stock Land Bank v. Kerr, 206 N.C. 610, 175 S.E. 102, 104, the plaintiff was a corporation organized and doing business under the laws of the United States, with its principal office in the City of Durham, Durham County, North Carolina. The defendants were citizens of the State, and residents of Sampson County. The Court said: "Durham county is the proper venue for the trial of the action." Citing C.S. 469, now N.C.G.S. § 1-82, and cases.

This is said in 13 Am.Jur., Corporations, Section 148: "In the absence of express statutory provision fixing the locality of the residence of a corporation for particular purposes within the state by which it was created, the general rule is that its residence is where its principal office or place of business is."

Judge Paul's findings of fact show that the Aetna Insurance Company has no registered or principal office located in Wake County. Therefore, it is not entitled as a matter of right to have this action removed for trial to Wake County by virtue of N.C.G.S. § 1-79.

Judge Paul's further findings of fact show that the Aetna Insurance Company maintains in Charlotte, Mecklenburg County, North Carolina, a supervisory office, that this office supervises all of the local and special agents and adjusters of the company throughout North Carolina, including offices located in Winston-Salem and Raleigh, North Carolina, and that Earl K. Whitney, who lives in Mecklenburg County, is manager of this office, and secretary of the company in North Carolina. This finding of fact, not excepted to by the Aetna Insurance Company and supported by competent evidence, shows that the Aetna Insurance Company, for purposes of venue, is not a resident of Wake County, within the purview of N.C.G.S. § 1-82.

Occidental Insurance Co. v. Lawrence, supra, is easily distinguishable. In that case the plaintiff, a foreign insurance company, was duly domesticated in North Carolina, with its head office and principal place of business in the City of Raleigh, Wake County, North Carolina. All of its records are kept in its head office and principal place of business in Raleigh, which is the place of business of all the offices of the company. Its by-laws provide that the principal and head office shall be in Raleigh, and that meetings of stockholders, directors and the executive committee shall be held in the principal and head office.

The Aetna Insurance Company is not entitled as a matter of right to remove this action for trial to the Superior Court of Wake County, and its assignments of error are overruled.

Harris & Harris Construction Company, Inc. is a North Carolina corporation, and has its principal office in Durham County, North Carolina. It is not entitled as a matter of right to remove this action for trial to the Superior Court of Wake County, and its assignments of error appearing in the Record are overruled. N.C.G.S. §§ 1-79 to 1-82.

The order entered by Judge Paul is

Affirmed.