U.S. Supreme Court St. Mary's Franco-American Petroleum Co. v. West Virginia, 203 U.S. 183 (1906)
St. Mary's Franco-American Petroleum Co. v. West Virginia
Submitted November 5, 1906
Decided December 3, 1906
203 U.S. 183
ERROR TO THE SUPREME COURT OF APPEALS
OF THE STATE OF WEST VIRGINIA
A state has power to regulate its own creations and, a fortiori, foreign corporations permitted to transact business within its borders. The act of West Virginia putting all nonresident domestic corporations having their places of business and works outside the state, and all foreign corporations coming into the state, on the same footing in respect to service of process, and making the state auditor their attorney in fact to accept process, is a reasonable classification and not unconstitutional as denying equal protection of the laws, because that provision does not apply to all corporations, nor does it deprive such corporations, without due process of law, of their liberty of contract, nor does the requirement that they pay such auditor an annual fee of ten dollars for services as such attorney amount to a taking of property without due process of law.
This is a writ of error to review a judgment of the Supreme Court of Appeals of West Virginia awarding a peremptory writ of mandamus, commanding the St. Mary's Franco-American Petroleum Company, by power of attorney, duly executed, acknowledged, and filed in the office of the auditor for the State of West Virginia,
"to appoint said auditor and his successors in office, attorney in fact to accept service of process and notice in this state for said St. Mary's Franco-American Petroleum
Company, and by the same instrument to declare its consent that service of any process or notice in this state on said attorney in fact or his acceptance thereof indorsed thereon, shall be equivalent for all purposes to, and shall be and constitute, due and legal service upon the said St. Mary's Franco-American Petroleum Company, and that the petitioner recover from the respondent her costs about the prosecution of her petition in this Court in this behalf expended."
It was agreed by the parties that no rule to show cause need be issued on the petition for mandamus, nor any alternative writ, but that the petition might stand as such writ, and the case be determined on demurrer thereto, which was filed.
The petition, among other things, averred that the St. Mary's Company was
"a nonresident domestic corporation organized, chartered, existing, and carrying on its corporate business under and by virtue of the laws of the State of West Virginia, but having its principle office and place of business and chief works in the City of Lima, in the State of Ohio;"
that the corporation
"was organized, and now exists by virtue of a charter issued to it by the secretary of State of the State of West Virginia on the 18th day of January, 1902;"
"on the 17th day of February, 1902, the said defendant corporation, by power of attorney, duly and legally executed, filed, and recorded, appointed one Wm. M. O. Dawson, a resident of the County of Kanawha in the State of West Virginia, to accept service on behalf of said corporation, and as a person upon whom service may be had of any process or notice, and to make returns of its property for taxation."
At the time the company was incorporated, sec. 8 of chapter 53 of the state code read:
"Where the legislature has the right to alter or repeal the charter or certificate of incorporation heretofore granted to any joint stock company, or to alter or repeal any law relating to such company, nothing contained in this chapter shall be construed to surrender or impair such right. And the right is hereby reserved to the legislature to alter any charter or
certificate of incorporation hereafter granted to a joint stock company, and to alter or repeal any law applicable to such company. But in no case shall such alteration or repeal affect the right of the creditors of the company to have its assets applied to the discharge of its liabilities, or of its stockholders to have the surplus, if any, which may remain after discharging its liabilities and the expenses of winding up its affairs distributed among themselves in proportion to their respective interests."
And sec. 24 of chap. 54:
"Every such corporation having its principal office or place of business in this state shall, within thirty days after organization, by power of attorney duly executed, appoint some person residing in the county in this state wherein its business is conducted, to accept service on behalf of said corporation, and upon whom service may be had of any process or notice, and to make such return for and on behalf of said corporation to the assessor of the county or district wherein its business is carried on, as is required by the forty-first section of the twenty-ninth chapter of the Code. Every such corporation having its principal office or place of business outside this state shall, within thirty days after organizing, by power of attorney duly executed, appoint some person residing in this state to accept service on behalf of said corporation, and upon whom service may be had of any process or notice, and to make return of its property in this state for taxation as aforesaid. The said power of attorney shall be recorded in the office of the clerk of the county court of the county in which the attorney resides, and filed and recorded in the office of the Secretary of State, and the admission to record of such power of attorney shall be deemed evidence of compliance with the requirements of this section. Corporations heretofore organized may comply with said requirements at any time within three months after the passage of this act. Any corporation failing to comply with said requirements within six months after the passage of this act shall forfeit not less than two hundred nor more
than five hundred dollars, and shall, moreover, during the continuance of such failure, be deemed a nonresident of this state, and its property, real and personal, shall be liable to attachment in like manner as the property of nonresident defendants; any corporation failing so to comply within twelve months after the passage of this act shall, by reason of such failure, forfeit its charter to the state, and the provisions of section eight, chapter twenty, Acts eighteen hundred and eighty-five, relative to notice and publication, shall apply thereto."
On the 22d day of February, 1905, the Legislature of West Virginia passed an act, chap. 39 of the Acts of 1905, which is as follows:
"SEC. 1. The auditor of this state shall be, and he is hereby constituted, the attorney in fact for and on behalf of every foreign corporation doing business in this state, and of every nonresident domestic corporation. Every such corporation shall, by power of attorney, duly executed, acknowledged, and filed in the auditor's office of this state, appoint said auditor and his successors in office attorney in fact to accept service of process and notice in this state for such corporations, and by the same instrument it shall declare its consent that service of any process or notice in this state on said attorney in fact or his acceptance thereof indorsed thereon, shall be equivalent for all purposes to, and shall be and constitute, due and legal service upon said corporation."
"SEC. 2. Such foreign or nonresident domestic corporation shall at the time of taking out its charter, or procuring its authority to do business in this state, as the case may be, pay to the auditor as its said attorney ten dollars for his services as such for the then current year ending on the 30th day of April next ensuing, and on or before the first day of May, for each year, such corporation shall pay to said auditor the like sum of ten dollars for his services as such attorney. And all such corporations as have heretofore taken out charters, or procured authority to do business in this state, shall, for the fiscal year
commencing on the first day of May, 1905, pay the sum of ten dollars to the auditor as the fee for such attorney to receive service of process, and annually thereafter a like sum, and such corporation shall not be required to pay any fee to the person who may have been heretofore appointed its attorney to receive service of process. All moneys received by the auditor under this chapter shall belong to the state, and be by him immediately paid into the state treasury. The auditor shall keep in a well bound book in his office a true and accurate account of all moneys so received and paid over to him."
"SEC. 3. The post office address of such corporation shall be filed with the power of attorney, and there shall be filed with the auditor from time to time statements of any changes of address of said corporation. Immediately after being served with or accepting any such process or notice, the auditor shall make and file with said power of attorney a copy of such process or notice, with a note thereon indorsed of the time of service or acceptance, as the case may be, and transmit such process or notice by registered mail to such corporation at the address last furnished as aforesaid. But no such process or notice shall be served on the auditor or accepted by him less than ten days before the return thereof."
"SEC. 4. In addition to the auditor, any such company may designate any other person in this state as its attorney in fact upon whom service of process or notice may be made or who may accept such service. And, when such local attorney is appointed, process in any suit or proceeding may be served on him to the same effect as if the same were served on the auditor."
"SEC. 5. Failure to pay the attorney's fee as hereinbefore required shall have all the force and effect, and subject such corporation to the same penalties and forfeitures, as are or may be prescribed by law for failure to pay the license tax required to be paid by such corporation."
"SEC. 6. Any corporation failing to comply with the provisions
of this act insofar as it relates to the appointment of the auditor as its statutory attorney, within ninety days from its incorporation, shall forfeit $100 as a penalty for such failure, and upon failure to pay such penalty, the charter of such corporation shall thereby be forfeited and void."
The company refused to comply with the act, and, thereupon, this proceeding was instituted.
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
It is argued that the Act of February 22, 1905, is invalid under the Fourteenth Amendment in that it deprives the company of liberty of contract and property without due process of law, and denies it the equal protection of the laws. But in view of repeated decisions of this Court, the contention is without merit. The state had the clear right to regulate its own creations, and a fortiori, foreign corporations permitted to transact business within its borders.
In this instance, it put all nonresident domestic corporations, which elected to have their places of business and works outside of the state, and all foreign corporations coming into the state, on the same footing in respect of the service of process, and the law operated on all these alike.
Such a classification was reasonable, and not open to constitutional objection. Orient Insurance Company v. Daggs, 172 U. S. 557 , 172 U. S. 563 ; Waters-Pierce Oil Company v. Texas, 177 U. S. 43 ; Central Loan and Trust Company v. Campbell, 173 U. S. 84 ; National Council. v. State Council, 203 U. S. 151 ; Northwestern National Life Insurance Company v. Riggs, post, p. 203 U. S. 243 ; Brannon on Fourteenth Amendment, Chap. 16.
It is true that the prior law left it to the corporation to appoint an attorney to represent it, and that the Act of February, 1905, changed this so as to make the auditor such attorney, but this, at the most, was no more than an amendment as to the appointment of an agent, and when the St. Mary's Company accepted its charter, it did so subject to the right of amendment. And we agree with the state court that the
requirement of the payment of ten dollars to the auditor for the use of the state does not amount to a taking of property without due process, or an unjust discrimination. Charlotte Railroad v. Gibbes, 142 U. S. 386 ; People v. Squire, 145 U. S. 175 . If the act is valid, that is.
The objections going to the expediency or the hardships and injustice of the act, and its alleged inconsistency with the state constitution and laws, are matters with which we have nothing to do on this writ of error, and the question whether the provision that the corporation shall not be required to pay any fee to anyone theretofore appointed an attorney is invalid or not requires no consideration on this record.