Home › Case briefs › Civil Procedure

Riverside & Dan River Cotton Mills, Inc. v. Menefee

Supreme Court of North Carolina · Civil Procedure

Civil ProcedureService of ProcessPersonal Jurisdictionforeign corporationservice of summonsdirectorresident directorNorth Carolina plaintiff

Facts

The defendant was a Virginia corporation with no office, place of business, process agent, domestication, property, or business activity in North Carolina. The summons was served in North Carolina on T. B. Fitzgerald, a resident of North Carolina who was a director of the corporation but was not transacting corporate business and held no other office. The plaintiff was, at the time of his injury and before and since, a citizen and resident of North Carolina. The defendant also objected that the plaintiff's amended complaint against the Maryland Casualty Company was read before that company was later dismissed from the action.

Issue

Whether service of summons on a resident director of a foreign corporation is valid under North Carolina's service statute when the corporation has no property or business in the state, but the plaintiff is a resident of North Carolina. A secondary issue was whether reading allegations against the Maryland Casualty Company before that company was dismissed prejudiced the defendant.

Rule

Under Revisal 1905, section 440(1), the first clause identifies the persons upon whom process may be served for any corporation, including a director. As to foreign corporations, service on one of those designated persons is valid only if one of these restrictive conditions exists: the corporation has property in the state, the cause of action arose there, or the plaintiff resides in the state; otherwise, service is valid only if made personally within the state upon the corporation's president, treasurer, or secretary.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

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

Lena Ortiz, a resident of North Carolina, sued Blue Valley Foundry, a Virginia corporation, in a North Carolina court for injuries suffered in Tennessee. Blue Valley has no office, property, or business activity in North Carolina, and the summons was served in Asheville on Caleb Dunn, a North Carolina resident who is only a director of the corporation and performs no corporate work in the state.

If Blue Valley specially appears to challenge personal jurisdiction based on improper service, how should the court rule under the majority opinion's construction of the statute?

Explanation. The majority construed the statute to allow service on any person named in the first clause, including a director, as to a foreign corporation when any one of three conditions exists: the corporation has property in the state, the cause arose there, or the plaintiff resides there. Here, the plaintiff resides in North Carolina, so service on the resident director is valid even though the corporation has no property or business in the state and the director was not conducting corporate business.