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James-Dickinson Farm Mortgage Co. v. Harry

Supreme Court of the United States · 1927 · Civil Procedure

Civil ProcedurePersonal JurisdictionState-Created Causes of ActionConstitutional Limits on State Civil Liabilitypersonal jurisdictionforeign corporationservice of processexecutive officer

Facts

Mrs. Harry, an Illinois citizen, sued Dickinson, a Texas citizen, and the James-Dickinson Farm Mortgage Company, a Missouri corporation, for false representations inducing her to buy Texas land. The corporation was served in Illinois by serving Dickinson as its president while he was only temporarily in Illinois on company business, and the pleadings admitted that the corporation had no residence, place of business, or business operations in Illinois. The evidence showed that false statements were made to purchasers during a winter sales trip to Texas, that Dickinson was present, heard the false statements, took a direct part in sales then made, and later personally induced the plaintiff to accelerate payments on purchase notes. The declaration asserted both common-law fraud and liability under a Texas statute covering fraudulent real-estate transactions.

Issue

Whether Illinois courts could exercise jurisdiction over the Missouri corporation based solely on service on its executive officer temporarily present in Illinois, and whether the Texas fraud statute, as applied, violated the Due Process or Equal Protection Clauses or was unenforceable in Illinois as a penal law.

Rule

Jurisdiction over a corporation of one state cannot be acquired in another state or district in which it has no place of business and is not found merely by serving process on an executive officer temporarily there, even if he is there on company business. A state may constitutionally broaden civil fraud liability, treat proof of one fact as presumptive evidence of another where there is a rational connection, and shift burdens of proof; and a statute authorizing exemplary damages payable to the injured party is not a penal law barred from enforcement in another jurisdiction.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Prairie Lantern Finance, a corporation incorporated and headquartered in Missouri, has no office, employees, or ongoing operations in Illinois. Its president, Nolan Pierce, travels to Chicago for a two-day meeting with prospective customers, and while there he is personally served in an Illinois suit naming the corporation as defendant.

Is the Illinois court likely to have personal jurisdiction over Prairie Lantern Finance on these facts?

Explanation. The controlling rule is that jurisdiction over a corporation of one state cannot be acquired in another state where it has no place of business and is not found merely by serving an executive officer temporarily present there, even if he is there on company business. The claim's location does not alter that rule in the majority opinion.