Opinion
38786.
DECIDED JUNE 21, 1961. REHEARING DENIED JULY 25, 1961.
Action for damages. Fulton Superior Court. Before Judge Alverson.
Sam F. Lowe, Jr., Lennie F. Davis, for plaintiffs in error.
Hugh M. Dorsey, Jr., Jule W. Felton, Jr., contra.
1. Where a foreign railway company maintains a permanent office in a county in this State, having a general agent in charge thereof, and also a ticket agent, each having the power and authority to bind the company, as a carrier to transport passengers for hire, and where the general agent supervises eleven local employees of the defendant railway company, six of whom act as salesmen to solicit and obtain business for the company, such railway company is "doing business" within this State so as to be amenable to process in such county in an action for damages for personal injuries sustained by one while being transported on one of its trains as a passenger. Likewise this rule would apply to an action by a husband for loss of services of his wife who was injured while being transported by the foreign corporation as a passenger on one of its trains.
2. An action as described above is not such a burden on interstate commerce as to be prohibited by the commerce clause of the United States Constitution.
DECIDED JUNE 21, 1961 — REHEARING DENIED JULY 25, 1961.
Flora Mae Kirkland and Jack Kirkland filed separate suits for damages against the Atchison, Topeka Santa Fe Railway Co. in the Superior Court of Fulton County. The defendant filed a traverse of the entry of service and a plea to the jurisdiction in each case upon the ground that the defendant was not subject to suit in Georgia.
Thereafter, it was agreed by the parties that the issue made by such traverse of entry of service and plea to the jurisdiction in each suit be tried together and be submitted to the trial judge without intervention of a jury upon the basis of (1) a stipulation of fact by the parties, (2) the testimony of Frank B. Brenner and Jack H. Brackeen taken by deposition, and (3) an affidavit of Floyd Struppi, general counsel for the defendant railway company.
Briefly, the stipulation shows that both plaintiffs are residents of the State of Georgia; that the physician who attended Mrs. Kirkland is a resident of the State of Georgia; that the defendant is a corporation of Kansas and is not, and was not when the actions were brought, licensed by or qualified with the Secretary of State to do business in the State of Georgia; that the defendant does not maintain any office in the State of Georgia other than the one referred to in the deposition of Frank B. Brenner and has not conducted or carried on any business activity in this State except as described in the deposition of Frank B. Brenner; that the defendant pays ad valorem tax on the furniture and fixtures located in its office in Atlanta, Georgia, at an assessed value of $1,940; that the defendant does not pay any income tax to the State of Georgia, and does not make any return or pay any tax to the State of Georgia except ad valorem tax as above mentioned; that the nature and scope of all business carried on by the defendant in the State of Georgia is set out in the deposition of Frank B. Brenner; that Mrs. Kirkland, plaintiff, did not purchase her ticket in the State of Georgia for the trip referred to in the petition, but purchased the same in the State of California, and that the defendant does not own or operate, and has never operated, any railway lines in the State of Georgia.
The affidavit referred to above states that the accident referred to in the petition occurred in New Mexico at a place more than 1,750 miles from Atlanta, and that the proper defense of the cases on the trial thereof would require the attendance in Fulton Superior Court of approximately six witnesses who are the employees of the defendant, at an expense of $2,400; that the employee witnesses are directly engaged in interstate commerce in connection with the operation of interstate trains operated by the defendant, and the absence of the witnesses from their work assignments would cause serious inconvenience in the handling of interstate business of the defendant and would constitute a substantial burden on interstate commerce which would be largely avoided if the trial of the above cases be held in the State where the accident took place.
The pertinent testimony of Frank B. Brenner shows briefly: He has resided in Atlanta for a period of ten years, and during such time, he has been employed by the defendant railway company, holding the title of general agent. The defendant leases an office in a building located in Atlanta, and he is in charge of such office. His work is "to influence the movement of freight and passengers over the Atchison, Topeka Santa Fe Railway Company." He supervises an office force of eleven employees of the defendant company, six of whom are designated as salesmen. Such office is open each working day from 8 a. m. to 5 p. m., for the benefit of anyone who may desire transportation by the defendant railway company. He further testified that such tickets were sold at this office to any individual who desired to take a trip between two points on defendant's railway lines. The money received from the sale of such tickets by an agent in the Atlanta office was deposited in an account, in a local bank, by the defendant's agent, and later transmitted to the defendant railway company at one of its offices outside this State. The local agents also make reservations for accommodations on the defendant's trains for those who purchase such passenger tickets.
He further testified that the salesmen under his supervision solicit freight business in the Atlanta area on behalf of the defendant railway company; that no bills of lading are issued by the defendant railway company at the Atlanta office, because such are made out by the "originating carrier."
The salary checks for the defendant's employees in its Atlanta office are sent from the defendant's office in Topeka, Kansas. An account in a local bank is maintained for small incidental expenditures of the office force, and other expenses incurred in its Atlanta office are submitted by the general agent to its headquarters for a voucher. The rent for the Atlanta office is paid by check issued at one of the defendant's offices outside this State.
Jack H. Brackeen testified that he had been employed by the defendant approximately ten years and had worked in its Atlanta office twelve and one-half months as a "city ticket agent" under the supervision of Frank B. Brenner. His duties were to supervise the sale of passenger tickets over the defendant's railway system and to furnish the public generally with information such as pamphlets and folders concerning the defendant's railway service.
By one judgment the court sustained the defendant's traverse of entry of service and plea to the jurisdiction in each case. The plaintiffs filed a joint bill of exceptions in which they assign said judgment as error.
1. Where a foreign railway company has and maintains a general agent and also a ticket agent in a county in this State, each having the power and authority to bind the railway company, as a carrier, to transport passengers for hire, by selling and delivering passenger tickets and receiving the purchase money for such passenger tickets, and where the company maintains a permanent office in such county with a general agent in charge thereof who supervises eleven local employees of the defendant company, six of whom act as salesmen to constantly solicit and obtain business for the company, the company is "doing business" within this State so as to be amenable to process in such county in an action for damages by one for personal injuries alleged to have been sustained by reason of the negligence of the railway company while such person was being transported as a passenger on one of the defendant's trains. Reeves v. Southern Ry. Co., 121 Ga. 561 ( 49 S.E. 674, 70 LRA 513, 2 AC 207). This is particularly true when the action relates to the nature of the activity that the railway company carries on in this State, viz., sale of passenger tickets, and an action for damages by one who sustained injuries while being transported as a passenger of the defendant railway company, as in the instant case. See Louisiana c. Milling Co. v. Mente Co., 173 Ga. 1 ( 159 S.E. 497), cf. Southern Ry. Co. v. Parker, 194 Ga. 94 ( 21 S.E.2d 94); Louisville N. R. Co. v. Meredith, 194 Ga. 106 ( 21 S.E.2d 101); International Shoe Co. v. State of Washington, 326 U.S. 310 ( 66 SC 154, 90 LE 95); Zuber v. Pennsylvania R. Co., 82 F. Supp. 670, 677. The rule of law announced in Vicksburg c. Ry. v. DeBow, 148 Ga. 738 ( 98 S.E. 381), sets forth the guiding principles applicable to the present issues in the instant case, but the result reached varies because the facts in the instant case are vastly different from those in the DeBow case. (Compare the foregoing statement of facts in the instant case with the facts shown in the DeBow case.) Consequently, nothing held here is in conflict with Vicksburg c. Ry. v. DeBow, supra, because in the DeBow case, it affirmatively appears that the agent did not have the authority to bind the foreign corporation by contract, or otherwise, or to sell passenger tickets, while in the instant case, the uncontradicted facts show that the defendant's agents had the power and authority to obligate the defendant railway company by selling and delivering passenger tickets to the purchasers thereof, and did sell and deliver passenger tickets and receive the purchase price therefor, thereby obligating the defendant railway company to transport the holders of such tickets as its passengers. See Aiken v. Southern Ry. Co., 118 Ga. 118 ( 44 S.E. 828, 62 LRA 666, 98 ASR 107). Such contract is implied by law. Georgia, Carolina Northern Ry. Co. v. Brown, 120 Ga. 380 ( 47 S.E. 942). Not only do the local agents and employees sell tickets, but they make reservations for space on the defendant's trains for those entitled to transportation by reason of the purchase of such tickets. Though the Supreme Court in the DeBow case did not decide whether its decision would have been different if the facts had been substantially the same as the facts in Denver c. R. Co. v. Roller, 100 F. 738, we feel the language of the Supreme Court indicates that a different factual situation existed in the DeBow case that required a different result from the one reached in the Roller case. It is important to note that the facts in the Roller case are found exactly in the instant case, except that in the Roller case the contracts were bills of lading, while in the instant case, the obligations placed upon the company arise from the sale of passenger tickets. It is clear that in Georgia the mere solicitation of business by the agent or agents of a foreign corporation is not doing business to such extent as to make the foreign corporation amenable to process in this State ( Vicksburg c. Ry. v. DeBow, 148 Ga. 738, supra, but see International Shoe Co. v. State of Washington, supra), but in the instant case the defendant railway company carries on other activities so as to manifest the defendant's presence as doing business in this State. We are inclined to believe that the language used in the DeBow case clearly indicates that had the evidence disclosed facts such as appear in the instant case without dispute, the decision would have been the same as the conclusion we have reached.
For our decision it is not necessary to decide any technical distinction between a contract and a ticket. It is only necessary to say that the delivery of a ticket to a purchaser and the receipt of the purchase money therefor, obligates a carrier to transport the purchaser of the ticket if specified, or the bearer of such ticket as a passenger if the name of the purchaser is not specified, hence, the obligations of a contract occur, though there may be a different person as a passenger from the person who purchased the ticket.
The facts in Green v. Chicago c. Ry. Co., 205 U.S. 530 ( 27 SC 595, 51 LE 916), were practically the same as in the DeBow case, and the Georgia Supreme Court, in the latter case, cited the Green case, approvingly, as a leading authority; however, the United States Supreme Court distinguished the facts of the Green case upon the same basis as here made concerning the DeBow case. International Harvester v. Commonwealth of Kentucky, 234 U.S. 579 ( 34 SC 944, 58 LE 1479).
"The true test of jurisdiction is not residence or nonresidence of the plaintiff, or the place where the cause of action originated, but whether the defendant can be found and served in the jurisdiction where the cause of action is asserted. A corporation can be found in any jurisdiction where it transacts business through agents located in that jurisdiction; . . ." Reeves v. Southern Ry. Co., 121 Ga. 561, supra. See also Safford v. Scottish American Mortgage Co., 98 Ga. 785 ( 27 S.E. 208). As stated in Vicksburg c. Ry. v. DeBow, 148 Ga. 738, supra, at page 743: "We are clearly of the opinion that our statute [providing for service on a foreign corporation, Code § 22-1101] makes it necessary that the foreign corporation be `doing business' in this State, before a valid personal judgment can be rendered against it in an action commenced by the service of process upon its agent located or resident within the State. As we conceive it, it is at all events the duty of the court to so construe the statute, because . . . the question is at last one of due process of law under the Constitution." As stated by a headnote in the same case: "It is essential to the legal rendition of a personal judgment against a foreign corporation, otherwise than by its voluntary appearance, that the corporation be doing business within the State."
Much has been written in lengthy and learned opinions concerning this question. However, we are of the opinion that the permanent, constant activities in Georgia by the defendant railway company, as shown by the undisputed evidence in the instant case, is such that the railway company is "doing business" in this State to the extent that it is subject to suits by the plaintiffs. Reeves v. Southern Ry. Co., 121 Ga. 561, supra; St. Louis S.W. Ry. Co. v. Alexander, 227 U.S. 218 ( 33 SC 245, 57 LE 486); International Harvester v. State of Kentucky, 234 U.S. 579, supra; International Shoe Co. v. State of Washington, 326 U.S. 310, supra. See also Scholnik v. National Airlines, 219 F.2d 115.
2. The defendant contends that to allow the plaintiffs' suits to be maintained in Georgia would place an undue burden on interstate commerce. See 104 A.L.R. 1077. We think this contention is without merit. There is a sufficient relationship between the nature of the activities carried on in Georgia by the agents of the company and the substance of the plaintiffs' suits. International Shoe Co. v. Washington, 326 U.S. 310, supra; Zuber v. Pennsylvania R. Co., 82 F. Supp. 670, supra; Louisiana c. Milling Co. v. Mente Co., 173 Ga. 1, supra; Louisville N. R. Co. v. Meredith, 194 Ga. 106, supra; 34 Columbia Law Review 1135; 34 Michigan Law Review 979; 45 Harvard Law Review 1263.
Courts have held that in determining whether a suit places an undue burden upon interstate commerce, the court shall not balance the convenience to the plaintiff and the inconvenience caused the foreign defendant by reason of having to defend a suit at a forum remote from where the cause of action arose, such as the expense and inconvenience of transporting employee witnesses to the trial. Denver Rio Grande Western R. Co. v. Terte, 284 U.S. 284 ( 52 SC 172, 76 LE 295); Davis v. Farmers Co-operative Equity Co., 262 U.S. 312 ( 43 SC 556, 67 LE 996). It is to be noted in passing that our procedural law adequately provides for such circumstances. Testimony may be taken by deposition with a minimum of interference and inconvenience and used at the trial. The facts in the instant case show that in all probability it will be necessary to use depositions wherever the proper forum is selected. See Perham Fruit Corp. v. Cullard White Star, 84 F. Supp. 354. Usually it is inconvenient for any party or witness to attend a trial, no matter where the court is located, but the ancient right of a plaintiff to choose and select the forum in which to try his case should not be unduly restricted except where the facts and circumstances show an indisputable and undue burden upon interstate commerce. Cressey v. Erie R. Co., 278 Mass. 284 ( 180 N.E. 160). See also Pere Marquette Ry. Co. v. Tifton Produce Co., 48 Ga. App. 286 ( 172 S.E. 727); 45 Harvard Law Review 1263. In the instant case the plaintiffs are residents of Georgia, and the stipulation shows that the plaintiffs were residents "at all times referred to in the petitions," which includes the time the injuries complained of occurred. As pointed out in International Milling Co. v. Columbia Transportation Co., 292 U.S. 511 ( 54 SC 797, 78 LE 1396), "residence, however, even though not controlling, is a fact of high significance." See also Davis v. Farmers Co-operative Equity Co., 262 U.S. 312, supra; cf. Michigan Central R. Co. v. Mix, 278 U.S. 492 ( 49 SC 207, 73 LE 470). Certain language used in Zuber v. Pennsylvania R. Co., 82 F. Supp. 670, supra, seems to support a proposition as a principle of law that unless a plaintiff goes further than to show his residence in order to maintain an action against a foreign corporation, the action will be an undue and unlawful burden on interstate commerce. While this opinion discusses many other legal principles involved in this appeal, we feel this proposition is unsound. Because this contention having been asserted by the defendant in its pleas to the jurisdiction, the burden, as a matter of law, was on the defendant to show that to allow the plaintiffs' suits to be tried in this State would constitute an undue burden on interstate commerce. Code § 81-501. The facts disclosed by the record are undisputed, and the only question remaining is one of law as to whether such facts are sufficient to show an undue burden on interstate commerce so as to oust the Superior Court of Fulton County, Georgia, of jurisdiction to try the cases. The facts, as they appear in the record, show, as a matter of law, that the plaintiffs' suits are not an undue burden on interstate commerce. In the instant case there is more than the mere residence of the plaintiffs, and the mere solicitation by the agents of the defendant upon which to predicate the right of this State to assert jurisdiction over the nonresident defendant. There are systematic and constant activities by the defendant through its agents in this State which are as much an integral part of carrying on its business as the actual operation of its trains; its agents not only sell and deliver tickets to its customers, but they make reservations for such customers. Though Frank B. Brenner, general agent of the defendant, testified that his authority did not encompass the power to issue bills of lading, it is clear from his deposition that the employees under his supervision actively solicit freight business from the local carriers, whereby such freight, which is initially transported by a local carrier, would be routed over the defendant's roads, and, in such event, the bills of lading would be issued by the local carrier. Though we do not base this opinion upon this fact, we think it is important as a circumstance in light of the International Shoe Co. case, 326 U.S. 310, supra, when deciding the question of whether the action is a burden on interstate commerce.
Assuming, of course, the plaintiff has a cause of action, and the defendant corporation is present within the State so as to be amenable to process.
By reason of the facts that (1) the plaintiffs are residents of this State, (2) the defendant has and does carry on extensive activities which constitute doing business within this State whereby it is amenable to process, and (3) the nature of its activities is related to the subject matter of these suits, we conclude that to maintain these suits in Georgia will not constitute an undue burden upon interstate commerce. Western Smelting Refining Co. v. Pennsylvania R. Co., 81 F. Supp. 494; Perham Fruit Corp. v. Cullard White Star, 84 F. Supp. 354, supra; International Milling Co. v. Columbia Transportation Co., 292 U.S. 511, supra; International Shoe Co. v. State of Washington, 326 U.S. 310, supra. In the language of International Milling Co. v. Columbia Transportation Co., supra, "such suit may be a burden, but oppressive and unreasonable it is not."
The trial court, sitting without the intervention of a jury, erred in sustaining the defendant's plea to the jurisdiction and the traverse of service filed by the defendant in each case.
Judgment reversed. Townsend, P. J., Carlisle and Jordan, JJ., concur.