Power Manufacturing Co. v. Saunders
Power Manufacturing Co. v. Saunders
Opinion of the Court
delivered the opinion of the Court. ■
This was an action to recover for a personal injury sustained by the plaintiff while in the defendant’s employ. The plaintiff was a citizen and resident of Ohio, and the defendant was a corporation of that State. Besides'its activities in Ohio, the defendant maintained a warehouse at Stuttgart, Arkansas, where it did a local business. The plaintiff received his injury in that'warehouse'. The defendant had complied with the conditions on which Arkansas permits foreign corporations to do a local business within her limits, and as part of its complian'ce had named Stuttgart as its place of business in the State and designated an agent residing there on whom process against it might be served. See Crawford & Moses Digest .1921, § 1826. It did no business and had no office, officer or agent elsewhere in the State. Stuttgart is in Arkansas County and is its county seat.
. The action was brought in Saline County, Arkansas, service of the summons being made on the defendant’s designated agent at Stuttgart. The plaintiff obtained a judgment, which the Supreme Court of the State affirmed, 169 Ark. 748; and the defendant brought the case here on writ .of error.
The Arkansas statutes require actions of this character, if against a domestic corporation, to be brought in a county where it has a place of business or in which its chief officer resides, and, if against a natural person, in
Another statute (§ 1174) permits both foreign corporations and persons residing out of the State to be sued-in any county in which they have property, or debts owing to them. Attachment and garnishment proceedings and some others may be had under it. But it concededly is without application liere and may be put aside. The defendant neither had any property nor owned any debts in the county where it was sued.
By a timely motion to dismiss, the defendant objected to being sued in Saline County and assailed the validity of the statutes, in so far as they permit a foreign corporation to be sued in a county where it does no business and has no office, officer, or agent, on the ground that they are unreasonably discriminatory and arbitrary, and therefore in conflict with the equal protection clause of the Fourteenth Amendment to the Constitution of the United States. The court of first instance upheld the validity of the statutes and accordingly overruled the motion; and the Supreme Court approved that ruling.
. Thus the. statutes were applied as permitting the defendant;-a foreign corporation doing business in one county, to be sued in another -county, where it did no business and had no office, officer or agent* on. a cause of action which arose in the former. Other counties lay between the two, making the distance from the defendant’s place of business .to the place of suit 75 miles by railroad and a few miles less by public roads. This of course tended to increase materially the burden otherwise incident to presenting a defense.
It is conceded that the statutes neither permit a domestic' corporation to be sued in a county in which it
We think it very plain that the statutes discriminate against foreign corporations and in favor of domestic corporations and individuals, and that the discrimination is not theoretical merely; but real and substantial.
The clause in the Fourteenth Amendment forbidding a State to deny to any person within its jurisdiction the equal protection of the laws is a pledge of the protection of equal laws, Truax v. Corrigan, 257 U. S. 312, 333; Atchison, Topeka & Santa Fe Ry. Co. v. Vosburg, 238 U. S. 56, 59, and extends as well to corporate as to natural persons, Smyth v. Ames, 169 U. S. 466, 522; Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, 165 U. S. 150, 154; Santa Clara County v. Southern Pacific R. R. Co., 118 U. S. 394, 396: It does not prevent a State from adjusting its legislation to differences in situation or forbid classification in that connection; but it does require that the classification be not arbitrary but based on a real and substantial difference having a reasonable relation to the subject of the particular legislation. Truax v. Corrigan, supra, p, 337; Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, supra, 155; Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78; Ft. Smith Light & Power Co. v. Board of Improvement, ante, p. 387.
No doubt there are subjects as to which corporations admissibly may be classified separately from individuals and accorded different treatment, and also subjects as to
Here the separate classification of foreign corporations is in respect of the venue or place of bringing transitory actions. The statutes mean foreign corporations doing business within the State by her permission, and therefore having a fixed place of business therein and a resident agent on whom process may be served. We speak only of them. So far as their situation has any pertinence to the venue of transitory actions it is not distinguishable from that of domestic corporations and individuals. Certainly there is no substantial difference. The. opinion of the state court does not point to any relevant distinction, nor have counsel suggested any. Of course the restricted venue as to domestic corporations and individuals is prompted by considerations of convenience and economy; but these considerations have equal application to foreign corporations. So far as the plaintiffs in such actions are affected, it is apparent that there is no more reason for a statewide venue when the action is against a foreign corporation than when it is against a domestic corporation or a natural person. So we conclude that the special classification and discriminatory treatment of foreign corporations are without reasonable basis and essentially arbitrary.
' .The state court put its decision on the ground that venue is a question, of procedure which the State may determine; and counsel for plaintiff advance the further ground that the defendant impliedly assented to the venue provisions by seeking and obtaining permission to do business within the State, the provisions being then
It of course rests with the State to prescribe the venue of actions brought in her courts. But the exercise of this power, as of all others, must be in keeping with the limitations which the Constitution of the United States places on state action. Procedural statutes are not excepted, but must fall like others when in conflict with those limitations. This is illustrated in a recent case where a statute of Arizona forbidding the granting of injunctions in certain situations was held to be in conflict with the equal protection clause of the Fourteenth Amendment and invalid, notwithstanding a contention that it was merely a procedural provision excluding a-particular remedy in equity but leaving remedies at law open, Truax v. Corrigan, supra, pp. 322, 330. Further illustration is found in a still later case where a Wisconsin statute subjecting foreign corporations to a burdensome procedural requirement not laid on other litigants was pronounced invalid under the same constitutional provision, Kentucky Finance Corporation v. Paramount Auto Exchange Corporation, 262 U. S. 544. And on turning to state decisions we find direct rulings that venue provisions must conform to the equal protection clause and are invalid where they discriminate arbitrarily against either individuals or corporations, Grocers’ Fruit Growing Union v. Kern County Land Co., 150 Cal. 466, 474-475; McClung v. Pulitizer Publishing Co., 279 Mo. 370.
The case of Cincinnati Street Ry. Co. v. Snell, 193 U. S. 30, is cited as if venue provisions were there held to be beyond the reach of the equal protection clause. But this is a strained and inadmissible interpretation. That was an action by an individual against a corporation .which was begun, conformably to a general statutory requirement, in the county where the defendant had its principal office and was engaged in business. Another stai
The contention advanced by counsel for the plaintiff that the defendant impliedly assented to the venue pro
We accordingly reach the conclusion that the defendant’s objection before stated to the validity of the venue provisions was well taken and should have been sustained under the equal protection clause of the Fourteenth Amendment.
Judgment reversed.
Dissenting Opinion
dissenting.
In order to enter into most of the relations of life people have to give up .some of their Constitutional rights. If a man makes a contract he gives up the Constitutional right that previously he had to be free from the hamper that he puts upon himself. Some rights, no- doubt, a person is not allowed to renounce, but very many he may. So we must go further than merely to point to the Fourteenth Amendment. I see nothing in it to prevent a foreign corporation agreeing with the State that it will be subject to the general law of torts and will submit to a transitory action wherever it may be sued. That the
Apart from the contract of the corporation there seems to me a ground for discrimination that ought to be respected when it has satisfied the State. A statute has to be drawn with reference to what is usual and probable. A foreign corporation merely doing business in the State and having its works elsewhere will be more or less inconvenienced by being sued anywhere away from its headquarters, but the difference to it between one county and another is likely to be less than it will be to a corporation having its headquarters in the State. So I repeat that in my opinion the plaintiff in error cannot complain if the State holds it. liable to a transitory action wherever it may be served and sued, as it would have been liable at common law.
Reference
- Full Case Name
- Power Manufacturing Company v. Saunders
- Cited By
- 234 cases
- Status
- Published