The language, however, was not to be taken literally, as was soon to appear. The Judiciary Act was amended,1 by omitting the phrase "or in which he shall be found," and adding a sentence limiting jurisdiction, in cases depending on diversity of citizenship, to suits brought "in the district of residence of either the plaintiff or the defendant." In other cases, suit could be brought only where the defendant was an inhabitant. In Shaw v. Quincy Mining Company,2 the court held that a corporation was an "inhabitant," within the meaning of this law, only in the state of incorporation. And in Southern Pacific Company v. Denton,3 the same meaning was ascribed to the term "residence," so that a citizen resident in the eastern district of Texas could not sue in the western district a Kentucky corporation which was there engaged in business. These decisions closed the federal courts to suits against corporations of other states with the exception of suits brought by a citizen in the state in which he was a resident, against a foreign corporation doing business there. In In re Hohorst, the section of the act was held inapplicable to a suit against a corporation of a foreign country, which could not from its nature be a resident in any state. To these two instances, the doctrine of Ex Parte Schollenberger still applied, that state legislation, and the consent of the corporation, could "bring about a state of facts" which would vest the courts with jurisdiction.

The ground was completely cut from under this theory of jurisdiction in the remarkable case of Barrow Steamship Company v. Kane.5 The suit here was against an English corporation, with offices in New York. The plaintiff was a citizen of New Jersey, and the cause of action arose in the British port of Londonderry. Under these circumstances the New York Code did not permit suit against foreign cor

1 Acts of March 3, 1887, ch. 373, § 1; Acts of August 13, 1888, ch. 866.

porations.1 Nevertheless a unanimous court upheld the jurisdiction of a federal court, sitting in New York.

For the decision itself, many respectable precedents could be found. In England, in the case of Newby v. Von Oppen,2 Lord Blackburn had sustained a suit against a foreign company which had an office in England, although no statute in terms authorized it. The general laws as to service of process on corporations were deemed sufficient. We have seen that long before, New Hampshire and Vermont had reached the same result, and other states had followed. More immediately in point, Judge Lowell had sustained the jurisdiction of the federal court, in Massachusetts, although under state decisions foreign corporations were liable only to foreign attachment.5 But these cases were not predicated on the theory of the nonexistence of a corporation beyond state limits, to which the Supreme Court was committed. Now the Supreme Court had reaffirmed its traditional doctrine with emphasis only six years before, and it did not even now repudiate it. Yet on any other theory than that of the actual presence of the corporation, the decision is incomprehensible. To produce the "state of facts" necessary to give the court jurisdiction over an absent corporation, two things were in Ex Parte Schollenberger considered necessary: a state statute, and the consent of the corporation. Here the state statute did not authorize the suit; and to imagine that a foreign corporation which does business in a state whose laws forbid such suits, thereby manifests an actual consent to service in the federal courts, is to exhibit no very keen understanding of business psychology. The consent is obviously a mere fiction.

1 Code, § 1780.

2 L. R. 7 Q. B. 293 (1872).

3 Supra, 82.

4 City Fire Insurance Company v. Carrugi, 41 Ga. 660 (1871). See Perpetual Insurance Company v. Cohen, 9 Mo. 416 (1845).

'Hayden v. Androscoggin Mills, 1 Fed. 93 (1879).

Shaw v. Quincy Mining Company, 145 U. S. 444 (1891).

In other respects, also, the Supreme Court has refused to abide by the consequences of this theory of implied consent. If a human individual consents to be bound by service on an agent, his consent, at least while it continues, validates any judgment so obtained.1 It would obviously be absurd to consider a judgment a taking of property without due process, if the defendant consented. Now the ablest champions of the consent theory have justified it on the ground that doing business in the state was an expression of a real consent to service in the mode prescribed in the statute. The point has been most clearly made by Professor Beale: 2

Since consent is given by acts, not by mere thoughts or words, this implied consent is as real as consent expressed by spoken or written words. Not the words themselves but the act of speaking or writing them, is the legal consent; and the act of doing business in acceptance of a conditional offer is equally an act of consent to the terms of the offer thus accepted.

According to this theory, the consent thus expressed is necessarily a continuous one, momentarily renewed as long as business within the state is continued; and it embraces any mode of service, so long as it is embodied in the laws of the state. If the method of service is arbitrary, and contrary to accepted notions of due process, the corporation cannot complain, for at the very moment of service, it is manifesting its consent thereto. It is, so to speak, in the position of a bare licensee, and must take the legal premises as it finds them or keep out. But this is not the doctrine of the Supreme Court. It was definitely established in Mutual Life Insurance Company v. Spratley,3 that in addition to the constitutional requisite that the corporation be doing business in the state, it was essential that service be upon an agent sufficiently representative in character that "the law would

1 Montgomery, Jones and Company v. Liebenthal [1898], 1 Q. B. 487 (C. A.). • Foreign Corporations, § 266.

imply, from his appointment and authority, the power to receive service of process." The court strongly implied that service on " any agent" of the corporation, as authorized in the statute, would not be sufficient. In a more recent case the rule is stated more carefully:

The law of the state may designate an agent upon whom service may be made, if he be one sustaining such relation to the company that the state may designate him for that purpose, exercising legislative power within the lawful bounds of due process.1

This rule seems clearly applicable to statutes appointing a state official, in no way connected with the foreign corporation, statutory agent to receive process on its behalf. If the statute makes proper provision for notifying the corporation, it is undoubtedly constitutional.2 But in several states the statutory agent is under no duty to give such notice. An emphatic dictum of the Louisiana Supreme Court, and three decisions in the federal district courts, have held such a statute contrary to due process. There is also a California decision that service under a similar statute operates only in rem, to bind property within the jurisdiction, and is subject to the strict rules governing constructive service. It seems likely that this rule will prevail in the Supreme Court."

The Supreme Court has recently countenanced a further limitation on the theory of implied consent, which illustrates strikingly the fictitious character of the consent on which the 1 Commercial Mutual Accident Company v. Davis, 213 U. S. 245 (1909). 2 See Mutual Reserve Association v. Phelps, 190 U. S. 147 (1902).

Gouner v. Missouri Valley Company, 123 La. 964, 49 So. 657 (1909).

Southern Railway Company v. Simon, 184 Fed. 959 (1910); affirmed on another ground in Supreme Court, 236 U. S. 115 (1915). See post, 93. King Tonopah Mining Company v. Lynch, 232 Fed. 485 (1916). Knapp v. Bullock Tractor Company, 242 Fed. 541 (1917).

'Holiness Church v. Metropolitan Church Association, 107 Pac. 633 (Cal. App. 1910). See also, accord with respect to domestic corporations, Pinney v. Providence Loan Company, 106 Wis. 396, 82 N. W. 308. Cf. State v. Petroleum Company, 58 W. Va. 108, 51 S. E. 465 (1905).

• The point was left open in Simon v. Southern Railway Company, 236 U. S. 115 (1915).

court's jurisdiction is thought to rest. If an individual voluntarily appointed an agent with general power to accept service clearly this would authorize service on any cause of action. The same should be true of a corporation, provided, again, the consent were real. If, now, doing business in the state is a real consent to the conditions prescribed in the state statute, "implied" and "actual" consent would be coextensive. Yet it has been for some time the doctrine of the Supreme Court that " implied " or " statutory "consent to service on a public official designated in the state law does not extend to causes of action arising out of business done outside the state. Old Wayne Mutual Life Insurance Company v. McDonough,1 established that a judgment obtained by this mode of service, on a life insurance policy contracted for in another state, was not entitled to full faith and credit; and in Simon v. Southern Railroad Company, such a judgment was held contrary to the due process clause, and its enforcement within the state which rendered it was enjoined. The reasoning of the court is most clearly set forth in the latter case:

Subject to exceptions, not material here, every State has the undoubted right to provide for service of process upon any foreign corporations doing business therein; to require such companies to name agents upon whom service may be made; and also to provide that in case of the company's failure to appoint such agents, service, in proper cases, may be made upon an officer designated by law. Mutual Reserve Association v. Phelps, 190 U. S. 147; Mutual Life Insurance Company". Spratley, 172 U. S. 603. But this power to designate by statute the officer upon whom service in suits against foreign corporations may be made relates to business and transactions within the jurisdiction of the state enacting the law. Otherwise, claims on contracts wherever made, and suits for torts wherever committed, might by virtue of such compulsory statute be drawn to the jurisdiction of any state in which the foreign corporation might at any time be carrying on business. The manifest inconvenience and hardship aris204 U. S. 8 (1906). 236 U. S. 115 (1915).

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