State v. Petroleum Co. , 58 W. Va. 108 ( 1905 )

Brannon, President:

By chapter 39, Acts 1905, the state auditor was constituted the attorney in fact for every foreign corporation doing business in this State, and for every non-resident domestic corporation, and every such corporation is required, by power of attorney duly executed by it, to appoint the auditor its attorney in fact to accept service of process and notice in this State for it, and by the same instrument to declare its consent that service of any process or notice in this State on said attorney, or his accepting shall be equivalent to and shall be, due and legal service upon the corporation. The act requires the corporation to pay yearly ten dollars to the auditor for acting, to be turned into the treasury by him! The defendant refusing to execute such power of attorney, the State asks a mandamus to compel it to d'o so. The corporation asserts that no duty rests upon it by reason of said act, because it is unconstitutional. The corporation says that the act denies it freedom of contract, freedom of choice of its agent, compels it to pay money, deprives it of property without due process of law, contrary to both the the State and Federal Constitutions. We cannot concede this. We shall not discuss the general power of a state over corporations taking charters under it, or foreign corporations coming to the state by its grace to do business in it. It might be plausibly said that a foreign corporation, or a non-resident domestic corporation, having no office or officers in the state, the state, under power to regulate corporations, and particularly to see to it that judicial process to answer suits by proper means be made available, has the power assumed in the statute. It is a duty, and must be a legitimate power, that the state render effective the jurisdiction of its courts against corporations accepting its charter and doing business in the State, or chartered by another state and doing business in the state, but having, perhaps, no officer to be readily found in the State. We can see how often the service of process, without which court procedure would be ineffectual and not due process, may be delayed, or be inconvenient, or be frustrated; and we can see how the State must have wide power in such case to secure service of the process of its courts, so its legislation do not deprive the just right of the corporation. It ought to answer suitors in the courts. If the State deprives the corporation of an essential right, its action would not be held good; but what right does this act take away? If the auditor were clothed with discretion to do an act harmful to the corporation, complaint might be justly made; but the auditor does nothing but accept service, a mere ministerial act. He does not confess judgment, nor does he do any discretionary act. Doubtless, if he fail to warn his corporation of the suit, he would be liable on his bond, just as to any person for failure to perform a legal duty. Before the act of 1905, the Code required a corporation to appoint such attorney. This act changes this so far as to make the auditor such attorney, thus taking from it the choice of person, sometimes a valuable right, but in this instance not so. But whether but for section 8, chapter 53, Code, this act would be valid, we need not, do not say. That section reads thus: “Where the legislature has the right to alter or repeal the charter or certificate of inrorporation heretofore granted to any joint stock company, or to alter or repeal any law relating to such company-nothing contained in this chapter shall be construed to surrender or impair such right. And the right is hereby reserved to the legislature to alter any charter or certificate of incorporation hereafter granted to a joint stock company, and to alter or repeal any law applicable to such company. ’ ’ When the defendant obtained its charter that section was in force, and this charter is subject to it. Under such a reservation of right, either to amend a charter, or to change the law regulating it, there is no limit to legislative power. It even includes right of repeal. In this instance the State has simply amended the law as to the appointment of an agent; has only made a public officer, attorney, so that there be one particular person, at a fixed place, always to be found, and known to all to be the attorney, dispensing with the inconvenience and uncertainty of ascertaining persons for service. 7 Am. & Eng. Ecy, L. (2d ed), 671; Citizens Bank v. Owensboro, 173 U. S. 636, and other cases cited in Brannon’s 14th Amendment, 365. When a charter issues under such law, the State has this right of amendment of the law in force before the charter; it is a condition of the charter as fully as if that right were in words in the charter. The law inserts or reads it into the charter. 10 Cyc. 1087; Cross v. Railroad, 35 W. Va. p. 177. If the corporation do not see proper to conform to it, it must discontinue business, as the legislature can not force it to do business under the change. Yeaton v. Bank, 21 Grat. 593. It cannot be said that the 14th amendment is violated because the act discriminates, requiring certain corporations, and not others, to appoint the auditor. As to domestic corporations haying offices and officers in the State, on whom service of process can be.had there is not need of such a statute; but as to those not so situated, there is need. The classification is based on the reason of their being differently circumstanced, and this justifies such discriminating classification. Copper Co. v. Scherr, 50 W. Va. 533; McGoun v. Illinois, 170 U. S. 283. As to the exaction of ten dollars for the service of the' auditor. If his appointment is valid, this feature cannot render the statute invalid as taking property without due process. The auditor is paid by the State, and the State by its officer, renders valuable service to the corporation. South Carolina instituted a commission for regulation of railroads, and required the company to pay salaries of its members, on the theory that the State had power of regulation and the service redounded to the benefit of the railroad company. The act was held not to violate ‘the 14th amendment either as taking property without Sue process of law, or as denying the company the equal protection of the law. Charlotte Co. v. Gibbes, 142 U. S. 386. To the same effect People v. Budd, 145 U. S. 175. That feature of the act providing that the corporation shall not be required to pay any fee to any one who may have been before appointed such attorney, was mentioned in oral argument as violating the Constitution in impairing the obligation of a contract. That does not arise in this case. It is a matter between different persons. Further, that is a provision separable from the clause requiring the corporation to appoint the auditor, and if unconstitutional, would not touch or infect that provision. 26 Am. & Eng. Ene. L., 2d ed., 570.

Writ Awao'ded.