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eign persuasion enters into another state, and therein engages in
"Where a foreign corporation is not doing business in a state, and the president or any officer is not there transacting business for the corporation and representing it in the state, it cannot be said that the corporation is within. the state, so that service cap ka made upon it."
The palpable meaning of the court being, as will find further support by other authorities to which I shall allude, that the doing business within the state must be coupled with the further fact that there is an officer of the corporation therein also transacting such business for and representing such corporation. The two things must combine to render it legally possible to make service of summons in that state upon the corporation. It is always a matter for the federal courts to determine, says Thayer, Circuit Judge, in St. Louis Wire-Mill Co. v. Consolidated Barb-Wire Co. (C. C.) 32 Fed. 802, 804, "whether such corporation has transacted business to such an extent within the district, and has such a representative or agent therein, that jurisdiction to render a personal judgment against the corporation may be acquired by service on that agent.”
A single transaction of business within the state is not tantamount to doing or carrying on business therein. I quote from the headnote in Cooper Manufacturing Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 789, 28 L. Ed. 1137:
"A corporation organized under the laws of one state does not, by doing a single act of business in another state, with no purpose of doing any other acts there, come within the provisions of a statute of the latter forbidding foreign corporations to carry on business within it, except upon filing certificates showing their place or places of business, their agents, and other matters required by the statute."
To the same purpose is Commercial Bank v. Sherman, 28 Or. 573, 43 Pac. 658, 52 Am. St. Rep. 811. In the case of Good Hope Co. v. Railway Barb Fencing Co. (C. C.) 22 Fed. 635, it appears that the
“James 0. was not a re and, if it be made upon the company of any court
But, as c facturers' G Hazel, Distr
“The single this state, and the service of ant's principal the manufactu sold in this sta for the sale of this state. In spondence and This, however, the meaning of thorize the serv temporarily in corporation mus state or district, ager representin statute provides initted to transa
controversy. I on business wit
president of the defendant company came into the state where sued to adjust a controversy between the defendant and the plaintiff growing out of a purchase made by the former company. In determining the cause, the court says:
“In this case, the president of the defendant was here in his representative character, but the corporation had never been practically engaged in business here. It had made purchases here occasionally, but it could have made them by correspondence as well as by the presence of its agents here. If the purchases had been made by correspondence it could be as logically urged that the corporation was engaged in business here as it can be now. Instead of writing, its agent came here in person. As it has never kept an office here, or car. ried on any part of its business operations here, or been engaged in any business here, which required it to invoke the comity of the laws of the state, it was not 'found' here for the purpose of being sued."
See St. Louis Wire-M:11 Co. v. Consolidated Barb-Wire Co., supra.
I may say in this connection that, for the purpose of determining whether a defendant corporation is properly servable in the state where the action is begun, the law is the same now, in effect, as it was before the amendment; that is, as prescribed by section 739 of the Revised Statutes (U. S. Comp. St. 1901, p. 587). "The language of Swan, District Judge, in United States Graphite Co. v. Pacific Graphite Co. (C. C.) 68 Fed. 442, 444, is expressive of the same doctrine. This case, and the one I shall subsequently cite, were decided after the amendment of section 739. The court says:
“James O. Roundtree, the president of the defendant company in this cause, was not a resident agent of the corporation, for it had none such in Michigan; and, if it be conceded that, while temporarily here, at the time of the service made upon him, he was engaged in negotiations concerning the business of the company, this is not sufficient to subject the defendant to the jurisdiction of any court in this state by reason of service made upon him."
But, as covering the entire ground, Buffalo Glass Co. v. Manufacturers' Glass Co. (C. C.) 112 Fed. 273, is pertinent and conclusive. Hazel, District Judge, says:
"The single question is whether the said defendant is engaged in business in this state, and whether it is found here within the meaning of the statute for the service of process. Affidavits were presented, showing that the defendant's principal place of business is in Cleveland, Ohio; that it is engaged in the manufacture of glass; and that within the past year the defendant has sold in this state large quantities of glass, and has also entered into contracts for the sale of glass to various firms and corporations engaged in business in this state. In short, the defendant has solicited trade in New York by correspondence and by an agent, and sells its commodity to customers located here. This, however, the contracts of sale not being made in this state, is not, within the meaning of the federal judiciary acts, doing business in the state to authorize the service of process on an agent or officer of a foreign corporation temporarily in the state. To authorize such service of process, the foreign corporation must actually and substantially be engaged in business in this state or district, its business must have been transacted by some agent or man. ager representing such corporation, and it must also appear that the local statute provides for suit against such foreign corporation which has been permitted to transact business within the state."
These cases cover quite fully the conditions presented by the present controversy. It is clear that the defendant company was not carrying on business within the state of Oregon. The contract upon which the
action is based was entered into and executed in the state of Idaho, between parties neither of whom was a resident or citizen of this state, so far as the record shows. Subsequently Jones, who was purchasing the ore, came to Portland, and there negotiated the assignment of the contract to the plaintiff. True, the secretary of the defendant company requested that Jones make the assignment, and was cognizant, no doubt, of the fact that the transaction was about to take place, and, in order to aid him in closing it up, he sent to Portland a draft upon Jones for the amount of the consideration for the sale of ore to be advanced, and the plaintiff, on taking over the assignment, honored the draft and paid the consideration. But that transaction cannot be considered as doing business in this state. The transaction was single, and the defendant had no such officer or agent representing it here as could be said to be carrying on the business of the company in this state, and undoubtedly no service made upon Jones could avail to bring the defendant into court.
The next feature upon which it is sought to maintain that the defendant was servable here with summons is that the secretary of the company came to Portland on business connected with the company. That business was to attend the taking of certain depositions, in a cause pending between the same parties to this suit, and to subserve the interests of the defendant company at such examination. But this cannot be considered as doing business here, any more than if the defendant had waived the matter of jurisdiction, and come into this court to make a defense to the present suit. This also is only a single transaction within itself, and it has nothing to do with the ordinary business of the company. Such a transaction lacks all the features of what is legally denominated doing business with a view of carrying on the business for which the corporation was organized and incorporated. Nor is the situation aided by the fact that while here Kleinschmidt presented two claims to the president of the plaintiff corporation for settlement and collection. Such was not the ordinary business of the defendant company, in which it was engaged anywhere, and could not suffice to render it amenable to the jurisdiction of the Circuit Court in this district. Upon the whole, I conclude that the defendant was not servable in this state in the manner in which service was attempted to be made.
As respects the second question, the appearance of the defendant is special, and for the one purpose; that is, to quash the service of summons. A careful reading of the motion, which is set out in the statement, will show that it was not the intention of the pleader to question the jurisdiction of the court, because the action was not brought in the state where the defendant was incorporated and resides. It may be true that, if objection be taken to a proceeding upon one ground only, it will constitute a waiver of other grounds not insisted upon; and it is legally true also that, where there is a general appearance, there is a waiver of all jurisdictional questions as to the person. But in this case the defendant has specified so particularly and so pertinently the ground upon which it relies for quashing the service that there can be no question as to the true purpose of the motion; and,
It is this ords and re that, prior circuit cour trespass on same covena claiming sin
having appeared specially, for the purpose of the motion only, there is no waiver of jurisdiction.
For the reasons here assigned, the motion to quash the service of summons will be allowed, and such will be the order of the court.
KUHN V. FAIRMONT COAL CO.
(Circuit Court, N. D. West Virginia. April 16, 1907.) COUBTS-FEDERAL CourtS-FOLLOWING STATE DECISION-RULES OF PROPERTY.
Where the bighest court of a state decided that a deed to coal underlying certain land did not contain an implied covenant obligating the grantee to sustain the surface, such decision became a rule of property, which would be followed by the federal courts as to land located in such state when called on to determine the effect of a similar deed.
[Ed. Note. For cases in point, see Cent. Dig. vol. 13, Courts, $$ 958, 959.
Conclusiveness of judgment between federal and state courts, see note to Kansas City, Ft. S. & M. R. Co. v. Morgan, 21 C. C. A. 478; Union &
Planters' Bank v. City of Memphis, 49 C. C. A. 463.1
DAYTON, District Judge. Barton W. Kuhn, a citizen of Ohio, has brought this original action of trespass on the case against the Fairmont Coal Company, a West Virginia corporation, alleging himself to be the owner of a certain tract of land in Marion county, this state, containing 91 acres, the coal underlying which he on November 1, 1899, sold and conveyed to Johnson N Camden, "with right to enter upon and under said land, and to mine, excavate, and remove all of said coal, and remove upon and under the said land the coal from and under adjacent, coterminous, and neighboring lands, and also the right to enter upon and under the tract and make all necessary structures, roads, ways, excavations, airshafts, drains, drainways, and openings necessary or convenient for the mining and removal of the said coal and the coal from coterminous and neighboring lands to market"; that this right to the coal, by various conveyances, has vested in the defendant, Fairmont Coal Company, which has so mined it and removed the supporting pillars as to cause the surface to break, crack, rend, and sink so as to damage the value thereof, for farming and other purposes, to the extent of $10,000. To this declaration the defendant company has appeared, craved oyer of the deed set forth in the declaration, and, when read to it, has demurred and alleged that such declaration presents in law no cause of action against it.
It is this demurrer that I am to pass upon. It seems from the records and reports of the Supreme Court of Appeals of West Virginia that, prior to the institution of this suit, one Leander Griffin in the circuit court of Harrison county, this state, instituted a like action of trespass on the case, upon a contract or deed containing precisely the same covenants as to the removal of the coal that are presented here, claiming similar damages for injury to the overlying surface. This
"The courts of the est court of a state in of that state; also w statutes or not, have be to rules of evidence in law of the state, and lished by repeated decis
action was heard by the state court, and it was by the judge thereof decided that, under the grant of the deed to the company of all the coal underlying the land and the right to remove the same, there was no implied reservation that the grantee must leave enough coal to support the overlying surface, and that no cause of action therefore existed in the plaintiff owner of such surface for damages done it by the mining out of the coal. To this judgment of the lower court a writ of error was sued out to the Supreme Court of Appeals of the state, where the question was most elaborately considered after argument twice had, upon the original and rehearing, and that court, with but one dissenting voice, affirmed the holding of the lower court. Three very elaborate and able opinions are filed, two in affirmance and one for dissent, which cover some 50 pages—53 S. E. 24–75 (59 W. Va. 480, 2 L. R. A. [N. S.] 1115)—and in which the authorities, pro and con, are given and fully discussed.
The first question for me to determine is whether I should follow the construction of this contract thus given by the court of last resort of the state; for, if it is my duty so to do, under that construction, the plaintiff here will have no cause of action, and the demurrer must be sustained. It cannot be gainsaid that by the deed in controversy the plaintiff parted with his title to the coal underlying his land, and that, through this deed and subsequent conveyances, title to the same has become vested in the defendant company. This coal in its natural state is as much real estate as is the surface. This decision of the Supreme Court of Appeals of the state in the Griffith Case, containing precisely the same words of grant and covenant, must therefore be held to be one relating to the property right and title of the parties to real estate in West Virginia, and to establish the local law as to real estate so held. Without attempting to discuss the broad question of just when and to what extent federal courts will follow the decisions of state courts, which question has given rise to so much and to a considerable extent diverse opinion, it is sufficient to say that it is now settled beyond peradventure that the federal courts will in all actions at law follow and be governed by such decisions of the state courts of last resort which relate to and define the property rights and title to real estate within the confines of such states. In Jackson v. Chew, 12 Wheat. 153, 167 (6 L. Ed. 583), it is said:
"It has been urged, however, at the bar that this court applies this principle only to state constructions of their own statutes. It is true that many of the cases in which this court has deemed itself bound to conform to state decisions have arisen on the construction of statutes; but the same rule has been extended to other cases; and there can be no good reason assigned why it should not be, when it is applying settled rules of real property. This court adopts the state decisions because they settle the law applicable to the case; and the reasons assigned for this course apply as well to rules of construction growing out of the common law as the statute law of the state when applied to the title to lands. And such a course is indispensable, in order to preserve uniformity; otherwise, the peculiar Constitution of the judicial tribunals of the states and of the United States would be productive of the greatest mischief and confusion."
In Bucher v. Cheshire R. R. Co., 125 U. S. 555, 8 Sup. Ct. 974, 31 L. Ed. 795, the Supreme Court has held:
At page 583 of 12 in the opinion in th property” referred t transfer, or sale of possession thereto. 168; Van Rensselaer v. Pridgeon, 4 Wall Wall. 723, 18 L. Ed. 683 ; Walker v. Com send v. Todd, 91 U. 24 L. Ed. 192; Bar Peters v. Bain, 133 dolph's Ex'r v. Quic Ed. 200; De Vaughs 41 L. Ed. 827; Tract 251, 19 L. Ed. 462.
But, in addition to sively settled by the Fed. 178, 32 C. c.
Circuit Court of App
"The decisions of the mining leases therein e followed by the federal
No better case, it dom of this rule so u at bar. Suppose thi state court, but, on case, the right, title, coal held by it under ly dependent upon t such vendor remaine by the decisions of th the unrestricted righ regardless of damag he became a nonresi the company's right, forceable implied lia be safely done with
fortune, not to say a of decision a necessit whether federal courts judgment of the state striking illustration of preme Court appears