Summary
holding that a domesticated foreign corporation remains a "resident of the state of its original incorporation" for jurisdictional purposes
Summary of this case from Lathem v. State Farm Mut. Auto. Ins. Co.Opinion
No. 32935.
December 13, 1937. Suggestion of Error overruled March 7, 1938.
CORPORATIONS.
A foreign corporation domesticated in Mississippi under statute remains a resident of state of original incorporation for all jurisdictional purposes, state and federal, and is subject to attachment in Mississippi courts as a "nonresident," since, for purpose of removing to federal court an action brought in state of domestication, a domesticated foreign corporation is a nonresident (Code 1930, sections 4160-4162).
APPEAL from the chancery court of Hinds county. HON. V.J. STRICKER, Chancellor.
W.B. Fontaine, of Jackson, for appellant.
Appellee failed to comply with the statutes pertaining to foreign corporations becoming domesticated.
One of the grounds set up in the answer to the motion was that Magee Truck Lines, Inc., the appellee, had failed to comply with the provisions of Section 4140 and there is attached to the answer the certificate of the secretary of state that the appellee had not filed a written power of attorney designating him or some resident agent for the service of process. It was contended in the lower court, and is contended here, that under the wording and provision of Section 4140, that the filing of the written power of attorney with the secretary of state designating an agent for the service of process was a condition precedent to the appellee becoming domesticated.
The language of the statute is as strong as can be put and Section 4140 says: "shall file such written power of attorney before it shall be domesticated." The appellee failed to do this and has not complied with the provisions of Article 1 of Chapter 100 of the Code of 1930 and therefore cannot be heard to claim the privileges of a domestic corporation.
17 Fletcher Cyclopedia Corporations, Perm. Ed., sec. 8513; People v. Hawkins, 106 Mich. 479, 64 N.W. 736; State v. Chicago, M. St. P. Ry., 80 Iowa 586, 46 N.W. 741; Green v. Robinson, 5 How. 80; Deans v. McLendon, 30 Miss. 343; Bohn v. Lowery, 77 Miss. 424, 27 So. 604; Quartette Music Co. v. Haygood, 108 Miss. 755, 67 So. 211; Brien v. Williamson, 7 How. 14.
Appellee was still subject to attachment and garnishment even though domesticated.
Section 4165, Code of 1930; 17 Fletcher's Cyclopedia Corporations, Perm. Ed., sec. 8304.
As a general rule, if the legislative act does not purport to create a new corporation, but declares that for certain purposes the foreign corporation shall be deemed to be a domestic corporation, it will be regarded as simply an enabling act regulating the right of the foreign corporation to do business in the state, and not an act of domestication, and the foreign corporation remains a corporation of the state under whose laws it was created.
Blue Ridge Power Co. v. Southern Ry., 115 S.E. 306; Jennings v. Idaho R.L. P. Co., L.R.A. 1915 D 115, 26 Idaho 703, 146 P. 101; Boyer v. Northern P.R. Co., 8 Idaho 74, 70 L.R.A. 691, 66 P. 826; N.Y.L. Ins. Co. v. Pike, 51 Col. 238, 117 P. 899; Cook on Corporations (7 Ed.), sec. 1; Waechter v. Atchison, T. S.F.R. Co., 10 Cal.App. 70, 101 P. 41.
In Drake on Attachments, 7th ed., sec. 80, the proposition is stated as follows: "The foreign character of a corporation is not to be determined by the place where its business is transacted, or where the corporators reside, but by the place where its charter was granted. With reference to inhabitancy, it is considered an inhabitant of the state in which it was incorporated."
Southern R. Co. v. Allison, 47 L.Ed. 1078, 190 U.S. 326, 23 S.Ct. 713.
Section 4165 of the Code of 1930 provides that corporations which exist by virtue of the laws of another state are subject to attachment and garnishment the same as an individual non-resident.
Magna Oil Ref. Co. v. White Star Ref. Co., 280 F. 52; Foy Shamwell v. Georgia-Alabama Power Co., 298 F. 643; Louisville, etc., Ry. v. Louisville Trust Co., 174 U.S. 562, 19 S.Ct. 821, 43 L.Ed. 1081; C.W. Dev. Co., Ltd. v. Lewis, 142 Miss. 428, 107 So. 557; 1 Fletcher Cyc. Corp., page 862; Peterman C. S. Co. v. Blumenfeld, 156 Miss. 55, 125 So. 548; Elec. Co. v. Elec. Storage Battery Co., 167 Miss. 842, 147 So. 773; Clark v. L. N.R. Co., 158 Miss. 287, 130 So. 302; Pennsylvania R.R. Co. v. St. Louis, etc., R.R. Co., 30 L.Ed. 84, 118 U.S. 290, 6 S.Ct. 1094.
From the foregoing authorities from this court and other courts is to be found the legal principle that domestication of a foreign corporation does not of itself exempt a foreign corporation from attachment and garnishment on the ground of non-residence.
Section 4165 of the Code of 1930 especially provides for the attachment of corporations which exist under the laws of another state on the ground of non-residence the same as an individual non-resident. The appellee in this case exists under and by virtue of the laws of the State of Tennessee and it is so alleged in the bill of complaint and established or admitted. Therefore, the appellant exists by virtue of the laws of the State of Tennessee and under Section 4165 is subject to attachment on the ground of non-residence and cannot claim to be exempt therefrom.
N.O.J. G.N.R. Co. v. Wallace, 50 Miss. 244; C.W. Dev. Co. v. Lewis, 142 Miss. 428.
To exempt appellee from attachment and garnishment on the ground of non-residence would be unconstitutional and void.
United States Constitution, sec. 1, Art. XIV; Mississippi Constitution of 1890, Sections 14, 24 and 90; Barbour v. Paige Hotel Co., 2 App. Cas. D.C. 174; Jennings v. Idaho R.L. P. Co., L.R.A. 1915D 115, 26 Idaho 703, 146 P. 101; Power Mfg. Co. v. Saunders, 71 L.Ed. 1165, 274 U.S. 490; Bayside Fish Flour Co. v. Gentry, 80 L.Ed. 772, 297 U.S. 422; Liggett Co. v. Baldrige, 73 L.Ed. 204, 278 U.S. 105; Gulf, C. S.F.R. Co. v. Ellis, 41 L.Ed. 666, 165 U.S. 150, 17 S.Ct. 255; Fountain Park Co. v. Hensler, 155 N.E. 465, 50 A.L.R. 1518; Barbier v. Connolly, 28 L.Ed. 923, 113 U.S. 27, 5 S.Ct. 357; Hing v. Crowley, 28 L.Ed. 1145, 113 U.S. 703, 5 S.Ct. 730; Minneapolis St. L.R. Co. v. Beckwith, 32 L.Ed. 585, 129 U.S. 26, 9 S.Ct. 207; Goodrich v. Thompson, 118 So. 60; Chicago, etc., R. Co. v. Moss Co., 60 Miss. 641; Adams v. Standard Oil Co., 53 So. 692, 97 Miss. 879; Lowry v. City of Clarksdale, 122 So. 195, 154 Miss. 155; Toombs v. Sharkey, 106 So. 273, 140 Miss. 676; 25 R.C.L. 815, sec. 66; Pullman v. Lawrence, 22 So. 53, 74 Miss. 782.
Robertson Robertson, of Jackson, for appellee.
Appellee has complied with all the statutes of Mississippi pertaining to the domestication of corporations, and is, therefore, a domesticated corporation under said laws.
Mississippi recognizes and permits to do business within its borders three general classes of corporations, organized for pecuniary gain, as follows: 1. Corporations organized in the state, and under its laws; 2. Domesticated corporations; 3. Foreign corporations which remain foreign corporations, but which are licensed to do business in this state.
Sections 4162 and 4163, Code of 1930.
We maintain that appellee is a domesticated corporation and is in the second classification above.
Ewing v. Warren, 144 Miss. 233, 109 So. 601.
Appellant recognized that appellee was and is a domesticated and not a non-resident corporation because it did not have a copy of its process mailed to appellee at the Memphis address, which mailing would have been required to complete the process under Section 4167 of the Code if appellee had not been a domesticated corporation.
Appellee, being a domesticated corporation, was not subject to attachment and garnishment in chancery as a non-resident corporation.
17 Fletcher Cyclopedia Corp., Perm. Add., sec. 8304; 14A C.J. 1231.
Could a corporation organized under the laws of this state be attached or garnished in chancery without bond; It could not. Then, could a corporation entitled to all the rights and privileges of similar corporations incorporated under the laws of this state be attached and garnished in chancery without bond? The appellant's answer to this question is "yes." Our answer is "no." We confidently believe that this court will, like the lower court, answer it as we have.
14A C.J. 1231; Jennings v. Idaho R.L. P. Co., L.R.A. 1915D 115, 26 Idaho 703, 146 P. 101; Pennsylvania R.R. Co. v. St. Louis, etc., R.R. Co., 30 L.Ed. 84, 118 U.S. 290, 6 S.Ct. 1094.
The exemption of appellee from attachment and garnishment because it is a domesticated corporation is not violative of the state or federal constitution.
There is no special privilege contended for by the appellee because of its compliance with Mississippi law that an individual might not enjoy by removing to the state. If an individual came here, as appellee did, he would not be liable to attachment as a non-resident. We earnestly insist that to exempt all domesticated corporations from attachment as non-residents is perfectly just and reasonable.
Argued orally by W.B. Fontaine for appellant and by Stokes V. Robertson for appellee.
The sole question for decision in this case is whether a corporation chartered, organized, and domiciled in another state, but which has been domesticated in this state by full compliance with sections 4160-4162, Code 1930, is subject to attachment in the courts of this state as a nonresident.
The precise question has not been directly decided in this state, or in any other state having domestication statutes of exactly the same provisions as contained in ours, so far as cited by counsel or which we, on our part, have been able to find. But we think the difficulty can be solved upon two considerations.
Whatever may be the full import of the domestication statutes, we think it may be safely said that they do not operate to make two separate and distinct corporations. The foreign corporation domesticated here still remains one corporation, and it must, therefore, have its domiciliary residence in one state and not in both. Thus, it seems the more reasonable to ascribe that residence to the original state which above others has visitorial and supervisory powers over it, as well as the final authority to dissolve it.
Under the ruling of the Supreme Court of the United States in Southern Ry. Co. v. Allison, 190 U.S. 326, 23 S.Ct. 713, 47 L.Ed. 1078, and others of like import, it is definitely established that a domesticated foreign corporation may remove to the federal court an action brought in the state of the domestication on the ground that it is a resident of the state of its original incorporation. If, then, we were to hold that a domesticated foreign corporation could not be attached in this state as a nonresident because domesticated under our statutes, the result would be that in a case involving less than $3,000, the corporation could have an attachment dismissed on the ground that it is a resident in this state, and in another case pending in the same court, and on the same docket, but involving more than $3,000 the corporation could remove it to the federal court on the allegation and ground that it is a nonresident of this state. Certainly, it cannot be a resident in one case and a nonresident in another; and since its status as a nonresident in removal cases is established beyond our control, we must, in the interest of procedural consistency, hold that for all jurisdictional purposes, state and federal, the domesticated corporation remains still a resident of the state of its original incorporation, and in consequence a nonresident of this state and subject to attachment as such.
Reversed and remanded.