Toledo Computing Scale Co. v. Miller

Mr. Justice Robb

delivered the opinion of the Court:

The purpose of the second paragraph of sec. 1537 of the Code [31 Stat. at L. 1119, chap. 851], to which reference has been made, was obviously for the protection of residents of this District, and to enable the courts of this jurisdiction to pass upon questions “growing out of contracts entered into or to be performed, in whole or in part,” here; in other words, Congress intended that if a foreign corporation should transact business here, it should be subject, as to that business, to the jurisdiction of the local courts, and not require the other parties to its contracts to go to Ohio or New Jersey for redress. The intent of Congress being plain, we should not permit that intent to be frustrated by indirectness. We therefore should regard the substance, and not be too much controlled by the form, of the things done. It is reasonable and fair that if a foreign corporation is permitted to transact business with the residents of this District, it shall be subject to the jurisdiction of the courts of the District in the determination of controversies growing out of that business, whenever, in the langauge of the statute, it has “any officer or agent or employee” here.

Appellant relies upon Green v. Chicago, B. & Q. R. Co. 205 U. S. 530 , 51 L. ed. 916, 27 Sup. Ct. Rep. 595. In that case the defendant was an Iowa corporation, and the eastern terminus of its railroad was at Chicago. Its business was the carriage of freight and passengers. As incidental and collateral to that business, it employed an agent and maintained an office for him at Philadelphia. This agent solicited and procured passengers and freight to be transported over the defendant’s line, but he sold no tickets and received no payments for transportation of freight. It was held that in substance the business shown to have been done by this agent was “nothing more than that of solicitation,” which did not “constitute 'doing-business’ in the sense that liability to service is incurred.” The difference between that case and the present is apparent. See *241 Ferguson Contracting Co. v. Coal & C. R. Co. 33 App. D. C. 159. Here the business solicited by the local agent of the defendant was not incidental and collateral, but had direct relation to the general business of the company, which was to sell scales it had manufactured. This distinction is apparent in the other cases cited by appellant. Thus in Boardman v. S. S. McClure Co. 123 Fed. 614 , it was held that a New York publishing corporation, whose only business within the State of Minnesota, where the service was made, was to circulate its periodicals by mail, and to send employees into the State for the purpose of soliciting advertising, was not doing business within the latter State. The court suggested that it would be necessary to make service upon some agent who was transacting some reasonable portion of the business of the corporation within the State. In that case, it will be observed, the statute differed from ours.

The appellant was engaged in the manufacture and sale of scales, the one feature being as important as the other. For the purpose of reaching residents of this District, it authorized the person upon whom service was made to represent it here. Grant that he had no power to make a binding contract on behalf of his principal, he did have authority to negotiate a tentative contract, and, upon the acceptance of that contract, the goods were sent here. Its local representative, as is apparent from the circumstances detailed, looked after its local interests; in other words, he was its “sales agent,” and was charged with the duty of representing it in matters growing out of those sales. He was much more than a mere solicitor, and the contracts viúcli lid vdgbti&tod m part to do performed deie.

Sec. 1537, as previously pointed out, is in two paragraphs. The first paragraph relates to service upon foreign corporations “doing business” in the District. The second prescribes the method of service “when a foreign corporation shall transact business” here without having any place of business or resident agent in the District. That Congress had some purpose in mind in the enactment of the second paragraph must be assumed. What was that purpose? As originally enacted, the paragraph did not contain the word “employee.” That was *242 added by the act of 1907 [34 Stat. at L. 874, chap. 445], and furnishes further evidence of the intent of Congress to circumvent efforts on the part of foreign corporations to evade local responsibility growing out of contracts entered into, or to be in whole or in part performed here. It is not necessary in the present case to determine whether a single transaction comes within the purview of this paragraph, for the reason that the record shows a well-defined policy and practice by appellant in respect to sales of its commodity here. Its representatives, as above suggested, were much more than mere solicitors whose responsibility ended when they brought appellant and prospective purchasers together. They not only negotiated sales, but, we are convinced, looked after deliveries, collections, and complaints. Looking to the substance of the particular transaction under investigation, we are fully satisfied that the person upon whom service was made was an agent of appellant within the meaning of this paragraph of sec. 1537.

The judgment is therefore affirmed with costs. Affirmed.