Opinion
No. 3709.
Decided March 2, 1948.
The question of whether a foreign corporation is doing business within this state and therefore liable in trustee process in the same manner as a domestic corporation (R.L., c. 280, s. 8) is one of federal law. The demands of due process are met if the activities of the foreign corporate agents are such as to make it reasonable and just to require the corporation to defend the suit in the state of their activities. The burden of proving that a foreign corporation is doing business in this state and therefore liable in trustee process is upon the plaintiff.
"ACTIONS on the case for personal injuries by Mabel Grace and for medical expenses and loss of consortium by Philip Grace against the Procter Gamble Company, a foreign corporation with a principal place of business in Cincinnati, County of Hamilton and State of Ohio. The Procter Gamble Distributing Company, also a foreign corporation, was summoned in both actions as trustee.
"No service was made on the defendant in either case. The Procter Gamble Distributing Company, Trustee, was served by giving in hand to D.C. Graham, representative, a true and attested copy of the writ against the Procter Gamble Company.
"Subsequently, on September 26, 1946, D.C. Graham as agent for the Procter Gamble Distributing Company, was subpoenaed to appear before a Justice of the Peace to testify regarding the disclosure of the Procter Gamble Distributing Company as trustee in two actions to be heard and tried between Mabel and Philip Grace and the Procter Gamble Company. The order required him to bring with him and produce all records, accounts, books and other documents of the Procter Gamble Distributing Company which would in any way show or relate to any goods, money or chattels in the hands and possession of the Procter Gamble Distributing Company on August 26, 1946, and since that time which were or might be due and owing from the Procter Gamble Distributing Company to the Procter Gamble Company.
"On October 18, 1946, the defendant, Procter Gamble Company, moved that the actions against it be dismissed for want of jurisdiction. On the same date, the Procter Gamble Distributing Company, Trustee, moved that it be discharged as Trustee in the action brought by Philip and Mabel Grace against the Procter Gamble Company inasmuch as it does not have any money, goods or chattels of the defendant in its hands or possession in the State of New Hampshire, or any rights or credits of the defendant by reason of contracts made or performed within the State.
"On November 1, 1946, the deposition of D.C. Graham was taken, at which time it was ascertained that he had no knowledge as to whether the Procter Gamble Distributing Company had any money, goods etc., of the Procter Gamble Company in its hands and possession. It was also ascertained that he had no records which would disclose such information.
"Thereafter the plaintiffs in both actions brought a petition asking that Graham as agent for the Trustee and the Trustee be ordered to produce the records, accounts, books, etc., in order that a proper inquiry might be made into the question of the chargeability of the Trustee.
"On June 20, 1947, the Court ordered that D.C. Graham as agent for the Trustee and the Trustee corporation be ordered to produce the records, accounts, books and other documents as called for in the subpoena on or before August 1, 1947, for the examination of the, plaintiffs for the purpose of determination of the chargeability of the Trustee. To this order the defendant, Procter Gamble Distributing Company, Trustee, excepted."
All questions of law raised thereby were reserved and transferred by Goodnow, C.J.
Sullivan, Dolan Wynot (Mr. Wynot orally), for plaintiffs.
Sheehan, Phinney Bass (Mr. Phinney orally), for defendant trustee.
The fundamental issue in this case is whether the Procter Gamble Distributing Company was "doing business within this state" and therefore "liable in the same manner as domestic corporations" in trustee process. R.L., c. 280, s. 8. "The question is one of federal law." See Campbell v. Corporation, 86 N.H. 310, 311, where this court regarded the federal decisions as controlling rather than convincing. Since the Campbell case, however, the legal fiction of corporate "presence" has been discarded as the test for determining jurisdiction over foreign corporations. While there are no substitute criteria "simply mechanical or quantitative," the demands of due process are met if the activities of the corporate agents are such as "to make it reasonable and just" to require the corporation to defend the suit in the state of their activities. International Shoe Co. v. Washington, 326 U.S. 310, 316, 319, 320. This decision ". . . indicates that the problem of jurisdiction over foreign corporations will hereafter be treated more realistically." 1945 Annual Survey of American Law 37; West Publishing Co. v. McColgan, 328 U.S. 823.
The chargeability of the trustee and the power of the court to make orders "as may be necessary and convenient to carry into effect" (R.L., c. 412, s. 47) trustee process, is dependent on whether the trustee was doing business in this state. The record discloses no such findings or ruling. While the question has been argued here, it is not clear from trustee's motion to be discharged that the question was argued before or considered by the Superior Court. Apparently the motion was considered as questioning only the power of the court to order the production of records outside the state. In accordance with our practice of having cases decided on their merits (Hackett v. Railroad, ante, 45), justice requires that the case be remanded. The plaintiff will have the burden of proving that the trustee was doing business in New Hampshire and may, in the discretion of the Superior Court, introduce additional evidence for that purpose and the trustee may introduce additional evidence to the contrary. The court will be guided in its findings and ruling by International Shoe Co. v. Washington, 326 U.S. 310.
If the Trial Court decides the question in the negative, the trustee will be discharged. If the court decides the question in the affirmative, its present order calling for the production of the trustee's records may stand. Davis v. Company, 79 N.H. 377.
Case discharged.
All concurred.