Opinion
No. 35376.
June 14, 1943. Suggestion of Error Overruled September 27, 1943.
1. CORPORATIONS.
A foreign corporation's action in entering its appearance especially for purpose of moving to dismiss suit for want of jurisdiction did not operate as a personal "appearance" so as to subject it to territorial jurisdiction of court.
2. APPEAL AND ERROR.
Where judgment of dismissal is correct on any ground raised by defendant's plea, the judgment will be affirmed.
3. APPEAL AND ERROR.
In suit against foreign corporation, where corporation's plea raised question of want of territorial jurisdiction and want of venue and court determined that corporation was doing business in state but dismissed suit for want of venue, although corporation did not cross-appeal, question whether it was doing business in state could be considered.
4. APPEAL AND ERROR.
Appellate court may base its affirmance or reversal on a different legal theory or on different grounds than that on which it was decided by trial court provided question was before trial court under pleadings when its judgment was rendered.
5. CORPORATIONS.
To constitute "doing business" in a state, so as to render foreign corporation amenable to process of state court, the business must be of such nature as to warrant inference that corporation has subjected itself to local jurisdiction and is by its duly authorized officers or agents present within state where service of process is attempted.
6. CORPORATIONS.
Where foreign newspaper company maintained office in state in charge of reporter who prepared news articles for acceptance or rejection, independent contractor operated trucks bringing newspapers into state for delivery to local distributor, and company employed resident contact man to ascertain and recommend suitable person to become local distributors of papers subject to approval of company at office outside state, the company was not "doing business," and was not amenable to service of process, in state (Laws 1940, ch. 246, sec. 1).
7. CONSTITUTIONAL LAW.
Unless business of foreign corporation in state is of such nature as to warrant inference that it has subjected itself to local jurisdiction and is present within state through duly authorized officers or agents, it would violate the "due process of law" provision of constitution to subject foreign corporation to jurisdiction of state court (U.S. Const. Amend. 14, sec. 1).
ROBERDS and ANDERSON, JJ., dissenting.
Appeal from circuit court of Webster county, HON. JOHN F. ALLEN, Judge.
James Stone Sons, of Oxford, and A.F. McKeigney, of Eupora, for appellant.
William Dunlap, the district circulation manager of appellee, was such an agent of appellee as to support service of process upon appellee, regardless of the service of process upon the Secretary of State, so as to give the circuit court of Webster County, Mississippi, venue of this suit.
State ex rel. Kerr v. Superior Court for King County, 166 Wn. 41, 6 P.2d 368, appealed, dismissed and certiorari denied 286 U.S. 532, 52 S.Ct. 640, 76 L.Ed. 1273; Thompson v. Ford Motor Co. (S.C.), 21 S.E.2d 34.
The Secretary of State is, by virtue of Chapter 246 of the Laws of 1940, the agent for the service of process of appellee for the entire State of Mississippi, and not just for Hinds County and, consequently, the proper venue of this suit was and is in the circuit court of Webster County, Mississippi.
Sandford v. Dixie Const. Co., 157 Miss. 626, 128 So. 887; Memphis Steam Laundry-Cleaners, Inc., v. Lindsey, 192 Miss. 224, 5 So.2d 227; McIntyre v. United Five Cent Ten Cent Stores, Inc., 171 S.C. 273, 172 S.E. 220; Long v. General Pet. Corp. of California (Calif.), 54 P.2d 1147; Openbrier et al. v. General Mills, Inc., 340 Pa. 167, 16 A.2d 379; Canright v. General Finance Corporation, 33 F. Supp. 241, 123 F.2d 98; Carr v. Bates, 108 Va. 374, 61 S.E. 754; Carter v. Schank et al. (Tenn.), 114 S.W.2d 787.
See Bouchillon v. Jordan, 40 F. Supp. 354.
In conclusion, we say that William Dunlap was vested with wide authority, was such an agent of appellee as to support the service of process upon appellee and that, for this reason, the venue of this suit is Webster County. Regardless of the service upon William Dunlap we say that this action accrued in Webster County, that the Secretary of State was properly served in Hinds County upon process issued from the circuit court of Webster County; that the Secretary of State is the agent for the service of process of appellee for every county in the state and not just Hinds County; that consequently, by virtue of the service upon him and disregarding the service upon Dunlap, the proper venue of this suit is Webster County. We further say that to hold otherwise would discriminate against all other corporations, both domestic and foreign, situated as appellee is situated in this suit, and will nullify the language and the obvious purposes of Chapter 246 of the Laws of 1940.
Cowles Horton, of Grenada, and Fitzhugh, Murrah Fitzhugh, of Memphis, Tenn., for appellee.
It seems to be well settled that in an action in personam, as is the present case, the burden is upon the plaintiff to show jurisdiction of the person of the defendant, by affirmatively pleading and proving such jurisdiction.
Hurley v. Wells-Newton, 49 F.2d 914; Sparks v. England (C.C.A. 8), 113 F.2d 579; McNutt v. General Motors, 298 U.S. 178; KVOS, Inc., v. Associated Press, 299 U.S. 269.
It is our contention that both under the decisions of the Supreme Court of Mississippi and under the holdings of the Federal courts defendant was not doing such business in this state as to subject it to the jurisdiction of the Mississippi courts. If we are correct in this, the judgment of the trial court must be affirmed, regardless of the validity of service and of how the venue in this state was laid, for, under all the authorities, statutes providing for assumption of jurisdiction of foreign corporations must, to afford due process of law, be limited to corporations doing business in the state.
First Nat. Bank v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349; Item Co. v. Shipp et al., 140 Miss. 699, 106 So. 437; Smith et al. v. Seeburg Corporation, 192 Miss. 563, 6 So.2d 591; Banks Grocery Co. v. Kelley-Clarke Co., 146 Tenn. 579, 243 S.W. 879; Street Smith Publications, Inc., v. Spikes, 120 F.2d 895, certiorari denied 314 U.S. 653; Green v. Chicago, etc., Ry. Co., 205 U.S. 530, 27 S.Ct. 595, 596, 51 L.Ed. 916; Whitaker v. McFadden Publications, Inc., 105 F.2d 44; Layne v. Tribune Co., 71 F.2d 223; Neely v. Philadelphia Inquirer Co., 62 F.2d 873; Kriger v. Macfadden Publications, 38 F. Supp. 472; Cannon v. Time, Inc. (C.C.A. 4), 115 F.2d 423; Moorehead v. Curtis Publishing Co., 43 F. Supp. 67.
The character and extent of the business done must warrant the inference that the foreign corporation has subjected itself to the jurisdiction of the state. And the transaction sought to be sued upon must have arisen out of the activities of the foreign corporation in the state.
L. N.R. Co. v. Chatters, 279 U.S. 320; Cannon Mfg. Co. v. Cudahy Packing Co., 292 F. 169, 267 U.S. 333.
In order to be sued, the foreign corporation must be conducting a continuous course of business through authorized agents within the state. Mere casual or isolated transactions are wholly insufficient.
Hunan v. Northern Supply Corp., 262 F. 181; Sasnett v. Iowa St. Trav. Men's Ass'n., 90 F.2d 514, certiorari denied 302 U.S. 711; Hutchinson v. Chase Gilbert, 45 F.2d 139.
And the mere collection of news material in the state for use for subsequent publication outside the state is not doing a business within the state, even though the newspaper company maintains an office in the state for said news-gathering.
Layne v. Tribune Co., 71 F.2d 223, certiorari denied 292 U.S. 572; Neely v. Philadelphia Inquirer Co., supra.
The maintenance of an advertising agent or even a continued practice of advertising in the state, or the sending into the state of a traveling advertising agent does not amount to such a doing of business as subjects the corporation to local jurisdiction.
People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, Anno. Cas. 1918C, 537; Harrell v. Peters Cartridge Co., 36 Okla. 684, 129 P. 872.
The mere solicitation of business by agents of a foreign corporation, even if regularly pursued, does not constitute a doing of business in the state.
Roark v. Amer. Distilling Co., 97 F.2d 297; Cone v. New Britain Mach. Co. (C.C.A. 6), 20 F.2d 593, certiorari denied 275 U.S. 552.
Soliciting advertisements for a newspaper is not doing business.
Lauricella v. Evening News Co., 15 F. Supp. 671; Loeb v. Star Herald Co., 175 N.Y.S. 412, 187 App. Div. 175.
The cause of action herein, if any, did not accrue in Mississippi but accrued in Tennessee. Chapter 246 of the Acts of 1940 expressly confines its operation and jurisdiction to a "cause of action which has accrued or may accrue in this State." The cause of action, if any, in this case, arose, or accrued, the instant the edition of the newspaper containing the alleged libelous matter came off the press in Memphis, Tennessee, and was read by someone there.
Graham McNeil Co. v. Scarborough, 135 Miss. 59, 99 So. 502; Grenada Bank v. Petty, 174 Miss. 415, 424, 164 So. 316; Houston v. Pulitzer Pub. Co. (Mo.), 156 S.W. 1068; Julian v. Kansas City Star Co., 209 Mo. 102, 107 S.W. 496; Begley v. Miss. Valley Trust Co. (Mo.), 252 S.W. 84, 86, 87; Wolfson v. Syracuse Newspapers, Inc., 4 N.Y. Sup. 2d 640; United States v. Smith, 178 F. 227; Age-Herald Pub. Co. v. Huddleston (Ala.), 92 So. 193.
This suit cannot in any event be maintained in Webster County. The plaintiff, evidently feeling that only in Webster County would he receive, at the hands of a jury, the kind of treatment most conducive to his success, did not seek to avail himself of the transfer statute, but acquiesced in a dismissal of the suit, as far as that phase of the case was concerned. While it is our insistence that the suit should have been brought in Tennessee, as the cause of action arose only there, and defendant is not doing business in Mississippi, surely plaintiff cannot sue the Secretary of State, who resides in Hinds County, in Webster County.
Bouchillon v. Jordan, 40 F. Supp. 354.
But, in addition, we say that the Act of 1940 itself clearly shows the intent that suits thereunder shall be instituted only in Hinds County. The act expressly provides that all service of process thereunder shall be by the sheriff of Hinds County. The reference in the act to the "Court" to which the process is returnable, means, of course, circuit or chancery or other court in Hinds County. In this case, therefore, the suit, if maintainable at all in Mississippi which we deny, would have had to have been brought in Hinds County, the residence of the Secretary of State.
Laws of 1940, Ch. 246.
Service under the 1940 act is not permitted unless the injury complained of was connected with work done in Mississippi.
Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560; Power Mfg. Co. v. Saunders, 274 U.S. 490, 47 S.Ct. 678.
The Act of 1940 is invalid if construed as plaintiff contends it should be.
Neither Bays Lamb nor Williams Dunlap are agents for valid service on defendant.
Saxony Mills v. Wagner Co., 94 Miss. 233, 47 So. 899; Item Co. v. Shipp, 140 Miss. 699, 106 So. 437; Lauricella et al. v. Evening News, 15 F. Supp. 671; Loeb v. Star-Herald Co., 175 N YS. 412, 113 A.L.R. 170; Dughan v. Weekly Trade Newspaper Co. (N.J.), 16 A.2d 612; Mulhearn v. Press Pub. Co. (N.J.), 20 A. 760; Cincinnati Times-Star v. France (Ky.), 61 S.W. 18; Evansville Courier Co. v. United Press, 74 F. 918.
James Stone Sons, of Oxford, and A.F. McKeigney, of Eupora, for appellant, in rebuttal.
There is no cross-appeal and no cross-assignments of error filed in this case and the only thing to be decided by this court are the assignments of error filed by appellant. Appellee cannot here raise the question of whether or not it is doing business in Mississippi and the question of whether or not the cause of action accrued in Mississippi because it has taken no cross-appeal and has filed no cross-assignments of error.
Yazoo M.V.R. Co. v. Adams, 81 Miss. 90, 32 So. 937; Carr et al. v. Miller, 162 Miss. 760, 139 So. 851; Rickets v. Rickets, 152 Miss. 792, 119 So. 194; Aetna Life Ins. Co. v. Thomas, 166 Miss. 53, 144 So. 50, 146 So. 134; Smith v. Lundy, 175 Miss. 485, 167 So. 631; Stephenson v. Louisiana Oil Refining Co., 180 Miss. 410, 177 So. 912; Nickey et al. v. State, 167 Miss. 650, 147 So. 324; Dixon v. Breland, 192 Miss. 335, 6 So.2d 122; Bridgeman v. Bridgeman, 192 Miss. 800, 6 So.2d 608; Taylor, Powell Wilson et al. v. Parker, 193 Miss. 514, 10 So.2d 192, 193; Rules of Supreme Court 6 (2).
Appellee is greatly in error in asserting that the burden of proof on its pleas was on appellant. Upon a plea to the jurisdiction or in abatement as in the case of other affirmative pleas, the burden of proof is, as a general rule, on defendant, and this even though the plea is verified.
1 C.J. 603.
A plea to the jurisdiction is an affirmative plea, as it is only by asserting an affirmative position that the plea can prevail.
49 C.J. 228, Sec. 270.
See also Porter v. Still, 63 Miss. 357; Harris v. Sims, 155 Miss. 207, 124 So. 325.
Regardless of this, the record clearly shows that appellee was doing business in Mississippi, and that the cause of action did accrue in Webter County, Mississippi.
None of the newspaper and magazine cases cited by appellee are analogous to the case at bar. Without taking them up in detail, the court will see that from every one of them there was nothing to show that they were maintaining offices in the state where sued for the purpose of gathering news for sale and distribution in that state. In the cases where they had offices and gathered news it was for the purpose of publishing and selling such news in another state. In none of the cases cited by appellee is the fact of the extent of circulation of the publication in the state where the publishing corporation was sued shown. In our case it is shown by the record that 29 percent of the circulation of the Memphis Commercial Appeal was in the State of Mississippi.
See Acton v. Washington Times Co., 9 F. Supp. 74; Connecticut Mutual Life Ins. Co. v. Spratley, 172 U.S. 602, 43 L.Ed. 569; Pennsylvania Lumberman's Mutual Fire Ins. Co. v. Meyer, 197 U.S. 407, 49 L.Ed. 810; International Text-Book Co. v. Pigg, 217 U.S. 91, 54 L.Ed. 678; St. Louis S.W.R. Co. v. Alexander, 227 U.S. 218, 33 S.Ct. 245, 57 L.Ed. 486; Washington-Virginia Ry. Co. v. Real Estate Trust Co. of Philadelphia, 238 U.S. 185, 59 L.Ed. 1262; International Harvester Co. v. Kentucky, 234 U.S. 579, 34 S.Ct. 944 58 L.Ed. 1479; Interstate Amusement Co. v. Albert, 239 U.S. 560, 60 L.Ed. 439; General Railway Signal Co. v. Virginia, 246 U.S. 500, 62 L.Ed. 854; Hoopeston Canning Co. v. Cullen et al., 63 S.Ct. 602, 87 L.Ed. 568.
The rule with regard to whether or not a foreign corporation is doing business within a state shows that more pragmatic attention is continually being applied and that the tendency is growing to hold, if possible, that the corporation is subject to suit within the state wherein it is sued. This seems to be true in the courts of the United States and in the courts of law of all the states.
Stone, Chairman, v. York Ice Machinery Corporation, 193 Miss. 638, 10 So.2d 380; Stone, Chairman, v. General Contract Purchase Corporation, 193 Miss. 301, 7 So.2d 806; Stone, Chairman, v. General Electric Contracts Corporation, 193 Miss. 317, 7 So.2d 811.
If appellee is not doing business in Mississippi then it is never possible for a foreign corporation whose main publication office for a newspaper is out of the State of Mississippi even if 95 percent of its circulation is in the State of Mississippi. We do not believe that this is the policy of our state.
This cause of action is bound to have arisen in Mississippi. Of course a cause of action accrues where a party has the right to sue. This is fundamental. The claim of appellee that the cause of action in this cause arose in Tennessee is supported by only a very small minority of the cases. It will be noted that he cites cases from only three jurisdictions in support of his contention that any cause of action arose only in Tennessee. The confusion in the minority group apparently is brought about by a confusion in the minds of those courts between two different meanings of the words "publish" and "publication." This is pointed out in the dissenting opinion of Age-Herald Publishing Co. v. Huddleston, 207 Ala. 40, 92 So. 193, 37 A.L.R. 898, 908.
The majority rule is that cause of action for libel arises anywhere where the newspaper is circulated. So far as we have been able to find this is the overwhelming majority group and it is founded not only on law but on simple common sense.
33 Am. Jur. 208, Sec. 227; 37 C.J. 18, Sec. 320.
See Clinton v. Croswell (N.Y.), 2 Caines 244, 2 Am. Dec. 235; Commonwealth v. Blanding (Mass.), 3 Pickering 304, 15 Am. Dec. 214; Haskell v. Bailey, 63 F. 873; Bailey v. Chapman, 15 Tex. Civ. App. 240, 38 S.W. 544; Louisville Press Co. v. Tennelly, 105 Ky. 365, 49 S.W. 15; Cincinnati Times Star Co. v. France, 22 Ky. L. Rep. 1666, 61 S.W. 18; Vitola v. Bee Pub. Co., 66 App. Div. 582, 73 N.Y.S. 273; Tingley v. Times-Mirror Co., 144 Cal. 205, 77 P. 918; State ex rel. v. District Court, etc., 129 Okla. 210, 264 P. 154; Buck v. James McClatchy Publishing Co., Inc. (Cal.App.), 287 P. 364; Bell Publishing Co. v. Garrett Engineering Co. (Tex.), 146 S.W.2d 301; Acton v. Washington Times Co., supra.
If this were not the rule and if the rule contended for by appellee should be adopted by this court then any newspaper published in Memphis, Birmingham, and New Orleans, by a foreign corporation, can libel any citizen of Mississippi and such citizen would be compelled to go to Tennessee, Alabama, or Louisiana to file a suit for such libel. This is not true in case of libel published in a newspaper operated by a domestic publishing company. It is quite probable that the newspapers of Memphis, Birmingham, and New Orleans have larger circulations in Mississippi than all of the domestic daily newspapers in the state. They sell their newspapers in Mississippi and circulate them in Mississippi, certainly for a profit. Why should these foreign newspapers be given such special favorable treatment, as asked for by appellee, and superior to the treatment given to our domestic daily newspapers? In justice and common sense there is no reason.
As to the contention of appellee that in no event the suit could be maintained in Webster County, it is evident that the case of Bouchillon v. Jordan, 40 F. Supp. 354, does not have any application to the case at bar. In that case the court held that Chapter 246 of the Laws of 1940 had no application to the case decided.
And the reason Chapter 246 provides that the service of process shall be made by the sheriff of Hinds County is because the act expects and intends that suits brought under it will be brought in the counties where they accrue. Otherwise, the provision with reference to service of process by the sheriff of Hinds County would be unnecessary because if the suit had to be brought in Hinds County the sheriff of that county would be the official who would serve the process anyway.
Power Mfg. Co. v. Saunders, 274 U.S. 490, 47 S.Ct. 678, 71 L.Ed. 1175, has no application whatever to the facts of the case at bar. This has been pointed out by Mr. Justice GRIFFITH in Sandford v. Dixie Const. Co., 157 Miss. 626, 128 So. 887, at pages 631 and 632 of 157 Miss.
We think clearly Chapter 246 of the Laws of 1940 is constitutional.
Cincinnati St. R. Co. v. Snell, 193 U.S. 30, 24 S.Ct. 319, 48 L.Ed. 604; Kane v. New Jersey, 242 U.S. 160, 37 S.Ct. 30, 61 L.Ed. 222; Pennsylvania Fire Ins. Co. v. Gold Issue Mining Milling Co., 243 U.S. 93, 37 S.Ct. 344, 61 L.Ed. 610; Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091; Bainbridge v. Merchants Miner's Transportation Co., 287 U.S. 278, 53 S.Ct. 159, 77 L.Ed. 302.
William Dunlap was such an agent of appellee as to support service of process upon appellee.
Regardless of this, this suit could be filed in the circuit court of Webster County, Mississippi, and service of process could be had upon the Secretary of State in Hinds County, Mississippi, and the circuit court of Webster County, Mississippi, had venue of the suit.
Argued orally by Phil Stone, for appellant, and by Cowles Horton and Millsaps Fitzhugh, for appellee.
This suit is brought by the appellant, Ned Lee, a resident citizen of Webster County, Mississippi, against the appellee, Memphis Publishing Company, a Delaware corporation, publisher of the Commercial Appeal, a daily newspaper, printed and published at Memphis, Tennessee, in an action for damages growing out of the publication and circulation of an alleged defamatory and libelous article sent to it for publication of and concerning him. The suit was instituted in the circuit court of Webster County and process was attempted to be had upon the said foreign corporation by serving the same upon two local citizens, Bays Land and William Dunlap, and also upon Walker Wood, Secretary of State at Jackson, Mississippi, pursuant to Chapter 246, Laws of Mississippi of 1940, which provides, among other things, that all civil actions for recovery of damages brought against a nonresident of the State of Mississippi may be commenced in any county in which the action accrued, and that service of process may be had in any county of the State where the defendant, or any of them, may be found. Neither of the two local residents in Webster County were charged with wrong doing, nor made defendant, and it appears from the proof introduced under a plea to the jurisdiction of the court that the said Bays Land was an independent contractor who operated a truck or trucks in bringing the newspapers from Memphis into Mississippi for delivery to one J.F. Wofford, a local distributor, who purchased at the wholesale price such a number of the copies of the Commercial Appeal as he deemed necessary to meet his requirements as such distributor, and who was obligated to pay such wholesale price therefor and to resell them on his own account to news boys, news stands and individual purchasers in the Town of Eupora in that county, using every reasonable effort to increase the number of retail purchasers of the paper in said town; that the said William Dunlap was employed by the defendant at a salary of $35 per week as a contact man to ascertain and recommend suitable persons to become local distributors of the paper, subject to the approval of the Memphis Office in Tennessee, accept applications in that behalf and performance bonds from such persons for approval at the office aforesaid, in the territory east of the I.C.R.R. Company and comprising more than one-half of the State of Mississippi, and he testified that as such employee he was the supervisor of such local distributors, but without authority or discretion to make any contract or to otherwise obligate his said employer in the premises; and it was also shown that the defendant maintains a news office at the Edwards Hotel at Jackson, Mississippi, on the door of which a sign is printed, reading: "The Commercial Appeal — Mississippi Office — News — Circulation — Advertising," where Kenneth Toler is in charge as a reporter for the Commercial Appeal, who prepares and sends to the Memphis Office news articles for acceptance or rejection there, and whose office rent and salary are paid by the defendant, but who was shown not to be engaged in selling newspapers, soliciting advertisements therefor or vested with any authority to act for the defendant in the negotiation of any contract or other business transaction. That such advertising carried by the defendant in its newspaper from Mississippi was wholly unsolicited items sent in by individuals who desired such service.
The said Chapter 246, Laws of 1940, supra, provides that: "Any non-resident, . . . or any corporation not qualified under the constitution and laws of this state as to doing business herein, who shall do any business or perform any character of work or service in this state, shall, by the doing of such business or the performing of such work or services, be deemed to have appointed the secretary of state, or his successor, or successors in office, to be the true and lawful attorney or agent of such nonresident, upon whom process may be served in any action, accrued or accruing from the doing of such business or the performing of such work or service, or as an incident thereto by any such non-resident, or his, their or its agent, servant or employee. The doing of such business or the engaging in any such work or service in this state shall be deemed a signification of such non-resident's agreement, and equivalent to an appointment by, such non-resident of the secretary of state of the state of Mississippi, or his successor or successors in office, to be the true and lawful attorney or agent of such non-resident upon whom may be served all lawful process in any action or proceeding against any such non-resident for any cause of action which has accrued or may accrue in this state." Section 1.
The defendant entered its appearance especially for the purpose of moving to dismiss the suit for want of jurisdiction, which action on its part did not operate as a personal appearance so as to subject it to the territorial jurisdiction of the court, as was held in the case of First National Bank of St. Louis v. Mississippi Cottonseed Products Company, 171 Miss. 282, 157 So. 349. By its plea, the defendant raised (1) the question of want of territorial jurisdiction of the courts of Mississippi on the ground that it was not doing business in the state, and (2) the want of venue of the suit in Webster County, in the event that it should be held that service of process upon the Secretary of State under the foregoing statute could render it subject to suit in this State. The trial court was of the opinion that the defendant was doing business in Mississippi but that the venue of the suit is in Hinds County where the Secretary of State resides, and in the absence of a motion by the plaintiff to transfer the suit the same was dismissed, and the plaintiff appeals.
It is urged by the appellant that the only question to be considered by this court is that of venue. That the defendant has not filed a cross-appeal from the decision of the trial court in holding that the said Memphis Publishing Company was doing business in this state, and that said defendant is therefore bound by the judgment of the trial court on that issue. We are unable to agree with this contention for the reason that if the judgment of dismissal was correct on any ground raised by the plea, the same will be affirmed; Yazoo M.V.R. Company v. Adams, 81 Miss. 90, 32 So. 937; Carr et al. v. Miller, 162 Miss. 760, 139 So. 851; 4 C.J. 662; 5 C.J.S., Appeal and Error, sec. 1464, holding that the appellate court may base its affirmance or reversal on a different legal theory or on different grounds than that upon which it was decided by the trial court, provided the question was before such court under the pleadings when its judgment was rendered.
We therefore proceed to a decision of the question of whether or not the defendant is doing business in this state so as to be amenable to the process of its courts, since an adjudication of that issue in the negative will render unnecessary a consideration of any other question involved.
The general rule deducible from the decisions of the Supreme Court of the United States on this question is that to constitute a foreign corporation doing business in a particular jurisdiction, the business must be of such nature and character as to warrant the inference that the corporation has subjected itself to the local jurisdiction, and is by its duly authorized officers or agents present within the state where the service of process is attempted. Philadelphia, etc., R. Company v. McKiddin, 243 U.S. 264, 37 S.Ct. 280, 61 L.Ed. 710; St. Louis S.W.R. Company v. Alexander, 227 U.S. 218, 33 S.Ct. 245, 57 L.Ed. 486, Ann. Cas. 1915B, 77; People's Tobacco Company v. American Tobacco Company, 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587, Ann. Cas. 1918C, 537; and Green v. Chicago, etc., R. Company, 205 U.S. 530, 27 S.Ct. 595, 596, 51 L.Ed. 916. In the case of Green v. Chicago, etc., R. Company, supra, where the railroad company's line extended from Chicago westward and where it maintained an office in Pennsylvania where a district freight and passenger agent and several other employees who solicited passenger and freight business were employed, it was held that while it was "obvious that the defendant was doing [in Pennsylvania] a considerable business of a certain kind" it was nothing more than that of solicitation and that the railroad company was not doing business in Pennsylvania in such sense as to render it amenable to the process of the courts in that state.
Our own court held in the case of Item Company, Ltd., v. Shipp et al., 140 Miss. 699, 106 So. 437, that the Item Company, Ltd., a publisher of a New Orleans newspaper, was not doing business in this state, so as to require the filing of a copy of its charter under Chapter 92, Laws of 1916, and wherein it was shown that the defendant Shipp, a local distributor of the newspaper at Hattiesburg, Mississippi, purchased from the Item Company, Ltd., such number of copies of the paper as he deemed necessary for his requirements as such local distributor and was obligated to pay for the papers whether he sold them or not, and when he sold them, whether he collected for them or not, and in which case the publishing company also had a traveling representative who visited the various towns in this state and solicited additional subscribers for the paper, turning the list over to the local distributors in each case, and occasionally made sales of such newspaper. The local distributor Shipp and the sureties on his performance bond were sued for a balance alleged to be due on his account and the defense was that the plaintiff was doing business in this state without having obtained a license therefor and therefore could not maintain the suit. This court held otherwise, and we are of the opinion that the decision is authority in support of the contention that the defendant in the case at bar is not doing business in Mississippi insofar as Bays Land and William Dunlap, the local residents in Webster County, are concerned. Compare Williams v. Bruce's Juices, D.C., 35 F. Supp. 847.
This brings us to the question of whether or not the maintenance of the Jackson Office under the supervision of Kenneth Toler under the circumstances hereinbefore mentioned should serve to distinguish the present case from that of Item Company, Ltd., v. Shipp et al., supra, the New Orleans newspaper not having maintained an office in this state in that case.
In the case of Layne v. Tribune Company, 63 App. D.C. 213, 71 F.2d 223, decided by the Court of Appeals of the District of Columbia, and wherein certiorari was denied in 293 U.S. 572, 55 S.Ct. 83, 79 L.Ed. 670, it was held that where the defendant, Tribune Company, an Illinois corporation, engaged in publishing the Chicago Daily Tribune and the Chicago Sunday Tribune at Chicago, Illinois, was not doing business in the District of Columbia, although its papers were circulated extensively throughout the country, and certainly in the City of Washington, where process was served on Arthur S. Henning, an employee of defendant company, in charge of the collection of news items in the City of Washington, and the forwarding of them to the Tribune Office in Chicago. In that case, the defendant company not only maintained an office in Washington, in charge of Henning, but there were three other reporters and two telegraph operators employed in that office. The defendant maintained a leased telegraph wire between Washington and Chicago, its home office. The news articles were examined at Chicago and used or discarded by the defendant and supplied to other newspapers. It was also shown that the defendant maintained a telephone in the Washington Office, and "Henning had authority to purchase supplies for the office; employ, when business required, additional telegraph operators; all of which items were put in his expense account, which was paid from the Chicago office. Henning's and the other employees' salaries were paid directly from the Chicago office. The rent and furnishings of the office in Washington were paid for directly from the Chicago office. It also appeared that defendant company made no contracts of any nature in the District of Columbia, and no money was received by any of the employees here for contracts entered into by defendant, or for the sale of defendant's papers here, or for advertising. No employee of defendant was authorized to enter into any contract with any other corporation outside of the state of Illinois. On this statement of facts, the court below held that defendant company was not doing business in the District of Columbia within the terms of the statute and could not be held subject to service of process here. We think the decision of the court was right. . . . Green v. Chicago, B. Q.R. Co., 205 U.S. 530, 27 S.Ct. 595, 51 L.Ed. 916, and supported by St. Louis Southwestern Ry. Co. v. Alexander, 227 U.S. 218, 227, 33 S.Ct. 245, 57 L.Ed. 486, Ann. Cas. 1915B, 77; International Harvester Co. v. Kentucky, 234 U.S. 579, 583, 34 S.Ct. 944, 58 L.Ed. 1479; Philadelphia Reading Ry. Co. v. McKibbin, 243 U.S. 264, 37 S.Ct. 280, 61 L.Ed. 710."
We are unable to distinguish the facts in the case at bar insofar as the maintenance of the Jackson Office in charge of Kenneth Toler is concerned from the facts in the case of Layne v. Tribune Company, supra. In that case, Title 24, Section 373 of the District Code 1929, among other things provided: "In actions against foreign corporations doing business in the District all process may be served on the agent of such corporation or person conducting its business, or, in case he is absent and can not be found, by leaving a copy at the principal place of business in the District, or, if there be no such place of business, by leaving the same at the place of business or residence of such agent in said District, and such service shall be effectual to bring the corporation before the court," — a statute designed to subject a foreign corporation doing business in the District of Columbia to suit, and in accordance with the same purposes sought to be accomplished by Chapter 246, Laws of Mississippi 1940, supra, even though the two statutes are different from that involved in the case of Item Company, Ltd., v. Shipp et al., supra.
It was also held in the case of Lauricella v. Evening News Pub. Co. (D.C.), 15 F. Supp. 671, that a newspaper located in a foreign state, maintaining advertising salesman and staff within state to solicit orders for display advertising subject to approval of manager at home office at which all bills were handled, where salesman could neither employ, discharge, nor fix compensation of his staff, was not "doing business" within state so as to authorize service of summons upon salesman. See also Cannon v. Time, Inc. (4 Cir.), 115 F.2d 423; Merrimon v. Martindale-Hubbell, Inc. (D.C.), 36 F. Supp. 182.
We have carefully examined the decisions relied upon by the appellant, and we find that none of them hold the contrary to the decision in Layne v. Tribune Company, supra, under similar facts and circumstances. The case more nearly in point to the contrary is that of Acton v. Washington Times Co. (D.C. Md.), 9 F. Supp. 74, 76. In that case, the alleged libel was by one of the defendant's reporters located in the State of Maryland, and the District Court in that case followed the decisions of the state court in construing a Maryland statute in that behalf. It was held that since one of the functions of a newspaper is that of gathering news "If a foreign corporation sees fit to perform any one of these functions in a given jurisdiction, it necessarily follows that such performance raises the inference that the corporation is present and doing business within that jurisdiction." In response to that suggestion, it may be noted that in the case of Green v. Chicago, etc., Railroad Co., supra, the railroad company had its agent in Pennsylvania soliciting freight and passenger business, which is business essential to be obtained in the operation of a railroad, but it was held that the railroad company was not subject to the jurisdiction of the courts of Pennsylvania on the ground that it was performing one of its essential functions in that state. At any rate, this decision of the Federal District Court, even though deemed persuasive, is not in our opinion controlling as against the other decisions hereinbefore cited.
Perfect candor constrains us to say that one's first reaction is adverse to the contention that the Commercial Appeal, with a daily circulation of approximately forty thousand copies of its papers in this state, is not doing business here, but after an examination of the reported cases and a consideration of the legal principles involved, we must hold that such contention is well taken, and that the defendant is not amenable to the service of process in this state; and that it would violate due process of law contrary to Section 1 of Article XIV of the Constitution of the United States to subject it to the jurisdiction of our courts unless its business here is of such nature and character as to warrant the inference that it has subjected itself to the local jurisdiction and is present within the state through duly authorized officers or agents within the sense of doing business as defined by the decisions in the Federal Supreme Court in its application of that constitutional provision.
The judgment of the court below in dismissing the suit must therefore be affirmed without regard to the fact that the judgment of dismissal was based on a different ground than that upon which we have reached our conclusion.
Affirmed.
It is, to say the least, taxing the credulity of the ordinary mind to say that the Commercial Appeal is not "doing any business," or performing "any character of work or service" in Mississippi. It has what are called distributors in the various vicinities of the state, a part of whose contractual duties is to "Use every reasonable effort to retain all purchasers and to increase the number of purchasers of The Commercial Appeal in the above town"; to sell and deliver the paper promptly to purchasers, newsboys and news-stands "at the regular rates" fixed by the paper; to furnish to the paper a complete list of such newsboys and news-stands, with their addresses, with dates to which subscriptions have been paid. These distributors execute bonds "to well and truly perform each and every provision of the above agreement." It also has located in the State District Circulation Managers. The one in this record covers all the territory in the state east of the Illinois Central Railroad except a small "corner" in the northeastern part thereof. He is paid a salary by the paper. It is his duty to go about his territory and supervise the distributors. He recommends the employment and discharge of the distributors. His recommendation has never been rejected. He sees to it that the bonds of the distributors have sufficient sureties, in numbers and financial worth. The paper maintains and pays the rent of an office in Jackson, on which is printed the words "The Commercial Appeal — Mississippi Office — News — Circulation — Advertising." In this office, it keeps a paid employee whose duty it is to gather state-wide news for the paper, and who analyzes and reports this news, with informative comments and conclusions thereon, for publication in the paper. Presumably and necessarily there are local news-gatherers throughout the state. It transports into the state, by bus, trucks and trains, and distributes to subscribers, some forty thousand daily papers. This is almost thirty percent of its total circulation. These not only carry the news and such articles as are usual in a large newspaper but also advertisements of the residents of this state. It receives from Mississippi nearly one-third of its total subscription revenue. Candor compels me to say that the majority holding appears to be supported by the greater number of adjudicated cases, but to say that the Commercial Appeal, under these circumstances, is not doing business or performing any character of work or service in Mississippi is, in my view, to become lost in the tangled brambles of legal refinement.
Publication of a newspaper is a unique business. Its sole, ultimate object is to sell papers. That is its life-blood. Without patrons, it has no purpose and no means of existence from operation of the business. It gathers and sells news. It sells space for advertisements. The whole plan and effort are directed to procuring subscribers. Every act in this record is a link in that plan. Speaking of the functions of a newspaper, it is said in Acton v. Washington Times Company (D.C. Md.), 9 F. Supp. 74, 76: "They are are follows: First, the function of gathering news; second, the function of obtaining advertisers and subscribers as a source of revenue with which to edit, print, and sell in newspaper form both the news and the advertisements obtained; and, third, the actual printing and circulation of the newspapers for sale." The Commercial Appeal is performing in Mississippi each and all such functions save the actual printing of the paper.
The cases bearing upon this question are legion. They cannot be dealt with in detail, nor even listed, within the bounds of an opinion of reasonable length. From them, however, I think the following is a fair summary of the principles announced therein bearing on the question under consideration:
1. No rule can be announced applicable to all cases. The courts have not tried to announce such rule. Each case must depend upon its own facts and circumstances, all considered, in the light of the purpose and language of the statute involved, and the general principles governing the jurisdictional authority of the state over such corporations.
2. The object to which the question is directed will influence the conclusion. The question of the right to subject a foreign corporation to jurisdiction of the courts in the state through service of process is different from the power to impose conditions, restrictions and regulations upon the right of the corporation to engage in activities in the state, and both are different from the right and power to tax such foreign corporation. The standards are not the same, and the quality, character, and quantity of the business conducted within the state by a foreign corporation may be sufficient to subject it to the jurisdiction and process of the courts, and yet not subject it to a statute prescribing conditions for doing business within the state.
3. Whether the transactions of the corporation within the state are in furtherance of its charter, functions and purposes, and whether they are of a continuing character, or whether such acts are isolated from the usual business of the corporation and temporary or sporadic, are very important considerations in determining whether it is doing business within that state. Many cases turn upon the character rather than the amount of business done.
4. While mere soliciting and obtaining orders within a state, by the agent of a foreign corporation, for goods to be shipped into the state to the purchasers, does not ordinarily amount to doing business within the state so as to render the foreign corporation amenable to service of process therein, yet, on the other hand, such acts have been held in many cases to constitute doing business in the state, viewed in the light of the facts and the issues involved, where such transaction is part of the regular business of the corporation, and indicates a purpose to carry on a substantial part of its dealings in that state.
5. Much weight is attached to the maintenance of an agency or office in the state. While perhaps a majority of the cases hold that a foreign corporation which merely solicits orders for its goods within a state, to be accepted or rejected by the home office, the goods to be shipped to the purchasers in that state from another state, is not doing business in the local state for the purpose of service of process therein, although the corporation or its agent maintains an office within the local state for the agent's accommodation, they all hold that very little additional activity on the part of the local agent is required in order to subject the corporation to service of process in the local state. And, it has been held that a foreign corporation is doing business in the state by maintaining therein an office and a selling agent who takes orders for its goods and merely sends them to the home office with directions for shipment. Anno. L.R.A. 1916E, et seq.
The foregoing rules are deduced from, and the field will be found to be covered by, the cases and discussions appearing in 23 Am. Jur., pages 333 to 343, and pages 378 to 389, and footnotes; and annotations in Vol. 2, page 307; Vol. 11, page 320; Vol. 22, page 552; Vol. 30, page 1154, all in American and English Annotated Cases; Ann. Cas. 1918C, page 539; 46 A.L.R. 570; 60 A.L.R. 1030; 95 A.L.R. 1480; 101 A.L.R. 126, and 19 Fed. Digest, Corporations, key 642, beginning at p. 914.
As to an attempted definition, it is said in 23 Am. Jur., Section 361, page 337: ". . . as a general proposition upon which most of the authorities agree in principle, subject to such modifications as may be necessary in view of the particular issue or of the terms of the statute involved, it is recognized that a foreign corporation is `doing,' `transacting,' `engaging in,' or `carrying on' business in the state when, and ordinarily only when, it has entered the state by its agents and is there engaged in carrying on and transacting through them some substantial part of its ordinary or customary business, usually continuous in the sense that it may be distinguished from merely casual, sporadic, or occasional transactions and isolated acts." In Restatement of the Law, Conflict of Laws, Section 167, page 244, this definition is given: "Doing business is doing a series of similar acts for the purpose of thereby realizing pecuniary benefit, or otherwise accomplishing an object, or doing a single act for such purpose with the intention of thereby initiating a series of such acts." Applying these rules and these definitions to all of the facts of this case, I think it may be accurately said that logic and reason force the conclusion that the Commercial Appeal is doing business, or performing work or service in Mississippi.
I think also that the following cases support or sustain that conclusion: Acton v. Wahington Time Company, (D.C. Md.), 9 F. Supp. 74; Black v. Vermont Marble Company, 1 Cal.App. 718, 82 P. 1060; Neyens v. Worthington, 150 Mich. 580, 114 N.W. 404, 18 L.R.A. (N.S.), 142; Milburn Wagon Company v. Com., 139 Ky. 330, 104 S.W. 323; Thomas Mfg. Company v. Knapp, 101 Minn. 432, 112 N.W. 989; Chicago Mill Company v. Sims, 197 Mo. 507, 95 S.W. 344; International Text-Book Company v. Pigg, 76 Kan. 328, 91 P. 74; International Text Book Company v. Lynch, 81 Vt. 101, 69 A. 541; International Harvester Company v. Kentucky, 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479; American Asphalt Roofing Corp. v. Shankland et al., 205 Iowa, 862, 219 N.W. 28, 60 A.L.R. 986; Tauza v. Susquehanna Coal Company, 220 N.Y. 259, 115 N.E. 915; Cochran Box Mfg. Company v. Monroe Binder Board Co., 232 N.Y. 503, 134 N.E. 547; Glynn v. Hyde-Murphy Company, 113 Misc. 329, 184 N.Y.S. 462; Heer Company v. Rose Brothers Company, 120 Misc. 723, 200 N.Y.S. 397; Bogert Hopper v. Wilder Mfg. Co., 197 App. Div. 773, 189 N.Y.S. 444; Winslow v. Domestic Engineering Co. (D.C.), 20 F. Supp. 576; Harbich v. Hamilton-Brown Shoe Company (D.C.), 1 F. Supp. 63; Clements v. MacFadden Publications (D.C. Tex.), 28 F. Supp. 274. A number of these cases lay stress upon the fact that the foreign corporation maintains a place of business in the local state, with the name and nature of its business appearing thereon.
The able majority opinion cites the case of Item Company, Ltd., v. Shipp et al., 140 Miss. 699, 106 So. 437. That case may be distinguished from the one at bar in these respects:
1. That suit involved Chapter 92, Laws 1916 (Section 4164, Code of 1930), requiring corporations "now or hereafter doing business in this state" to file their charters in Mississippi. Chapter 246, Laws 1940, now under consideration, uses the words "who shall do any business or perform any character of work or service in this state." It is readily seen that Chapter 246 is broader and more comprehensive in its language than Chapter 92.
2. The wording of Chapter 246 shows that it was designed to enable a resident to sue in a case where a foreign corporation had not complied with Chapter 92. It says "Any non-resident . . . or any corporation not qualified . . . as to doing business herein." If such non-resident is qualified by filing its charter to do business in this State, Chapter 246 is not needed.
3. The object of Chapter 246 is to enable residents of this state to assert in court such rights as they may have resulting from activities in this state of foreign corporations; whereas, in the Shipp case, the residents were undertaking to prevent establishment against them through the courts of Mississippi of an apparent contractual obligation.
4. In the Shipp case, the non-resident maintained no office in Mississippi. As stated above, the courts attach great importance to this fact. Here, appellant maintains an office in Jackson, pays all rent and expenses, on which appears "The Commercial Appeal — Mississippi Office — News — Circulation — Advertising," with a paid agent located therein and in charge thereof, and who there gathers local and state-wide news, which, with his comments and conclusions, the paper publishes, sells and distributes throughout the state.
It is not a question in this case whether either Dunlap or Lamb has authority to receive process. The statute constitutes the Secretary of State its agent, with full authority for process, if appellant is performing any act within the state covered by said Chapter 246, and he was served with process herein.
Corporations can only act through agents. They have no physical being to be present in person in the state. Whatever transactions take place in this state must be through agents.
The law should be interpreted in a practical way to afford opportunity for the administration of equal and exact justice so far as human beings can do so under reasonable interpretation of the statutes. This case illustrates that. The article here did not call the name of Mr. Lee. Its application to him could only be known in and about Webster County, Mississippi, by those familiar with local conditions and who knew or had heard of his activities about the matter published. If he has suffered damage, it is with the people who know him. Under the holding in this case, and that of Forman v. Mississippi Publishers Corp., 195 Miss. 90, 14 So.2d 344, this day handed down, Mr. Lee can bring and maintain his action only at Memphis, Tennessee, where, very likely, he is not known at all, or, if so, to a very limited extent. In such case, he must not only incur all of the expense of attending trials and prosecuting his case at that distance, but he is dependent for the presence of witnesses at the trial upon their willingness to volunteer and undergo the inconvenience and consume the time of what is likely to be protracted litigation in another state. He has no way to force them to go, and if they go voluntarily, that apparent interest in his behalf would greatly weaken their testimony before the jury. Again, as a practical illustration, suppose a Chicago or New York paper, engaging in the same activities as is appellant in Mississippi, should publish the vilest kind of libel against a citizen on this state — under these holdings, the libeled citizen must sue in Chicago or New York. This, in practical effect, is to deny the citizen a remedy for his wrongful injury, regardless of how grievous it may be. Such result must needs be declared by the courts, of course, regardless of the hardship and injustice, if the status of the law so requires, but that result, in my opinion, does not follow under the statute and circumstances of this case.
Anderson, J., joins in this opinion.