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courts, and not the interpretation of a state statute, but the court appears to have been of the opinion that the decision in the Green Case extended to both situations. Further, as to the extent of the Green Case in respect of this contention, reference may be made to the opinion of Noyes, Ch, J., in Sleicher v. Pullman Co. (1909; C. C.) 170 Fed. 365, and the opinion in Bristol v. Brent (1910) 38 Utah, 58, 110 Pac. 356, cited supra, III. a.

Service of process upon a “general passenger agent" of a foreign railway corporation engaged only in soliciting business within the state was held in McGuire v. Great Northern R. Co. (1907; C. C.) 155 Fed. 230, not to confer jurisdiction upon a Federal circuit court within the rule of the decisions of the Supreme Court of the United States, that a corporation of one state may be legally served with summons or notice of suit in another state only when the corporation is doing business in that state, and such service to be valid must be made in that state upon an agent who represents the company in business there.

The facts, among others, that a foreign railway company neither owning nor operating any line within the state was a member of a "freight soliciting bureau," which was an arrangement solely for the purpose of soliciting interstate business to move over the lines of connecting carriers outside of the state over a certain route, and these railroad companies employed a freight solicitor, as a joint agent to solicit freight over their lines, whose only duties and authority were limited and confined to the solicitation in Philadelphia of interstate freight to be moved or transported over the lines outside of the state of Pennsylvania, and wholly between. states other than Pennsylvania, were held in Earle v. Chesapeake & O. R. Co. (1904; C. C.) 127 Fed. 235, not to show that the railroad company was "doing business" within Pennsylvania so as to render it amenable to service of process there within the rule that the due process clause of the 14th Amendment requires a showing that a foreign corporation is doing business within a state to subject it to suit

there; at least, this was the theory of the cases referred to by the court as requiring a showing of "doing business.'

Under the commerce clause.

A Minnesota statute providing that "any foreign corporation having an agent in this state, for the solicitation of freight and passenger traffic or either thereof over its lines outside of this state, may be served with summons by delivering a copy thereof to such agent," was construed by the supreme court of the state to compel every foreign interstate carrier to submit to suit there as a condition of maintaining a soliciting agent within the state, and jurisdiction was not limited to suits arising out of business transacted within Minnesota. And it appears that whatever the nature of the cause of action and wherever it may have arisen, and although the plaintiff was not and never had been a resident of the state, the statute was held to confer jurisdiction. See cases cited supra, III. a. The Federal Supreme Court held this statute, as so construed, invalid, under the commerce clause of the Federal Constitution, as imposing upon interstate commerce a serious and unreasonable burden. Davis v. Farmers Co-op. Equity Co. (1923) 262 U. S. 312, 67 L. ed. 996, 43 Sup. Ct. Rep.,556.

In Davis v. Farmers Co-op. Equity Co. (U. S.) supra, the court pointed to the following facts as showing the unreasonableness of the burden upon interstate carriers of having to answer suits in states remote from the places where their lines are operated, upon causes of action there arising: The claims against interstate carriers for personal injuries and for loss and damage of freight are very numerous; the amounts demanded are large; in many cases carriers deem it imperative or advisable to leave the determination of their liabilities to the courts; litigation in states and jurisdictions remote from that in which the cause of action arose entails absence of employees from their customary occupations, and this greatly impairs efficiency in operation, and causes, directly and indirectly, heavy expense to the carrier. This burden, as stated by

the court, is a heavy one, and the resulting obstruction to commerce serious. (A footnote appended to the opinion of this case shows that the situation in some states was indeed becoming serious.)

Mr. Justice Brandeis, speaking for the court in Davis v. Farmers Co-op. Equity Co. (U. S.) supra, pointed out that the fact the business carried on by the corporation is entirely interstate in character does not render the corporation immune from the ordinary process of courts of a state (a proposition established by International Harvester Co. v. Kentucky (1914) 234 U. S. 579, 58 L. ed. 1479, 34 Sup. Ct. Rep. 944, a case not within the scope of the present annotation), a fact which appears to have been overlooked in some cases.

In the case above, the court intimated that the Minnesota statute might be valid although applied to suits in which the cause of action arose without the state, if the transaction out of which it arose had been entered upon within the state, or if the plaintiff was, when it arose, a resident of the state. The question as to the effect upon jurisdiction of the fact that the cause of action arose without the state, and that the plaintiff is a nonresident, is covered in an annotation in 30 A.L.R. 255 [Writ and Process, § 36].

Though the court had no occasion to consider in Davis v. Farmers Co-op. Equity Co. (U. S.) supra, whether the Minnesota statute there considered violated the 14th Amendment, as authorizing a denial of due process of law, Mr. Justice Brandeis said that the case at bar presented facts, while not identical, very similar to those in Missouri, K. & T. R. Co. v. Reynolds (1921) 255 U. S. 565, 65 L. ed. 788, 41 Sup. Ct. Rep. 446, and St. Louis Southwestern R. Co. v. Alexander (1913) 227 U. S. 218, 57 L. ed. 486, 33 Sup. Ct. Rep. 245, Ann. Cas. 1915B, 77, the court stating that in both cases the only constitutional objection asserted was violation of the due process clause.

The Davis Case (U. S.) supra, was held controlling in Gamble-Robinson Co. v. Pennsylvania R. Co. (1923) 157

Minn. 306, 196 N. W. 266, and Rosenblet v. Pere Marquette R. Co. (1925) 162 Minn. 55, 202 N. W. 56, wherein it was decided that the statute was wholly void.

But the case was distinguished in Maverick Mills v. Davis (1923; D. C.) 294 Fed. 404, supra, III. a.

It was also distinguished and explained by Mr. Justice Brandeis in Missouri ex rel. St. Louis, B. & M. R. Co. v. Taylor (1924) 266 U. S. 200, 69 L. ed. 247, 42 A.L.R. 1232, 45 Sup. Ct. Rep. 47, a case not within the scope of this annotation.

In several recent cases heretofore cited in this subdivision the courts reserved the question whether the rule in Davis v. Farmers Co-op. Equity Co. (U. S.) supra, was applicable. Among such cases, reference may be made to Basham v. Missouri P. R. Co. (1924) 201 Ky. 807, 258 S. W. 690.

IV. Summary.

As a result of the cases heretofore cited in this annotation, it may be stated without fear of contradiction that if the statutes are broad enough, while a foreign railway corporation. which is engaged solely in soliciting business within the state for its lines without the state, and not making contracts of shipment within the state, or doing other local business, is not subject to service of process within the state, since it is not doing business within the state within the requirement of the due process clause of the 14th Amendment (Green v. Chicago, B. & Q. R. Co. (U. S.) and other cases cited supra, III. b), if the soliciting agency goes beyond those things necessarily appertaining to the business of a soliciting agency, such as the issuing of bills of lading, settling claims, etc., it is doing business. there and is amenable to the process of the courts (St. Louis Southwestern R. Co. v. Alexander (U. S.) and other cases cited supra, III. a) unless to subject the corporation to suit in a particular case works an unreasonable burden upon interstate commerce (Davis v. Farmers Co-op. Equity Co. (U. S.) and other cases cited under the caption, "Under the commerce clause," supra, III. b). J. P. T.

W. D. FERRELL

V.

RUFE DOAK et al., Appts.

Tennessee Supreme Court - July 18, 1925.

(152 Tenn. 88, 275 S. W. 29.)

Towns, § 17-establishment of manufacturing plant.

The establishment by a municipal corporation of a plant suitable for manufacturing purposes, to be leased for private use, with an incidental increase of the population and taxable property within the municipality and increase of use of the municipal light and power plants, is not within a constitutional provision empowering the general assembly to authorize incorporated towns to impose taxes for corporate purposes only. [See annotation on this question beginning on page 609.]

APPEAL by defendants from a decree of the Chancery Court for Wilson County (Stout, Ch.) holding unconstitutional an act empowering the issuance of bonds for the promotion of industrial enterprises in a suit brought to enjoin defendants from calling an election submitting the question of the issuance of such bonds. Affirmed.

The facts are stated in the opinion of the court.
Messrs. L. H. Walker and William
Green for appellants.

Mr. A. A. Adams, Jr., for appellee. Mr. Louis Chambers for intervening petitioners.

Messrs. Thomas H. Malone and O. K. Holladay, amici curiæ:

The purchase of land or building of houses to be leased or sold to industrial enterprises, as an inducement to locate in a municipality, is a proper corporate purpose, and the legislature may lawfully confer such powers on the municipalities of this state, and authorize taxation in this behalf.

Jones v. Portland, 245 U. S. 217, 62 L. ed. 252, L.R.A.1918C, 765, 38 Sup. Ct. Rep. 112, Ann. Cas. 1918E, 660; Green v. Frazier, 253 U. S. 233, 64 L. ed. 878, 40 Sup. Ct. Rep. 499; Memphis v. Memphis Gayoso Gas Co. 9 Heisk. 531; State ex rel. Thompson v. Memphis, 147 Tenn. 658, 27 L.R.A. 1257, 251 S. W. 46; Nohl v. Board of Education, 27 N. M. 232, 16 A.L.R. 1085, 199 Pac. 373; Hill v. Roberts, 142 Tenn. 215, 217 S. W. 826; Holton v. Camilla, 134 Ga. 560, 31 L.R.A.(N.S.) 116, 68 S. E. 472, 20 Ann. Cas. 199; Shenandoah Lime Co. v. Governor, 115 Va. 865, 80 S. E. 753, Ann. Cas. 1915C, 973; State v. Nelson County, 1 N. D. 88, 8 L.R.A. 283, 26 Am. St. Rep. 609, 45 N. W. 33; State ex rel. Cryderman v. Wienrich, 54 Mont. 390, 170 Pac. 942; State ex

rel. Lyon v. State Warehouse Commission, 92 S. C. 81, 75 S. E. 392; State ex rel. Lyman v. Stewart, 58 Mont. 1, 190 Pac. 129; Capen v. Portland, 112 Or. 14, 35 A.L.R. 589, 228 Pac. 105; State ex rel. State Reclamation Bd. v. Clausen (State ex rel. Chase v. Clausen) 110 Wash. 525, 14 A.L.R. 1133, 188 Pac. 538; Wheelon v. South Dakota Land Settlement Bd. 43 S. D. 551, 14 A.L.R. 1145, 181 N. W. 359; Laughlin v. Portland, 111 Me. 486, 51 L.R.A. (N.S.) 1143, 90 Atl. 318, Ann. Cas. 1916C, 734.

Chambliss, J., delivered the opinion of the court:

This appeal is from a decree holding unconstitutional chapter 189 of the Private Acts of 1925, empowering the town of Lebanon to issue bonds to be used in the promotion of industrial enterprises to be located within its borders. The bill sought to enjoin proposed proceedings under said act by which $36,000 of such funds, to constitute a tax charge against the municipality, were to be expended in the purchase of a factory site and the erection thereon of buildings suitable for a box manufacturing plant, to be leased at an annual rental of $1,800

(152 Tenn. 88, 275 S. W. 29.)

to a private corporation. The right to extend the public aid thus to be granted to this private enterprise as an inducement to its location and operation in Lebanon is sought to be justified upon the theory that the public welfare of the community would be contributed to by a consequent increase in population, the erection of additional tax yielding homes, increased consumption of light, water, and power, for which the municipality would receive compensation, etc. However commendable the proposed movement, it must be and is frankly conceded that public funds to be provided by taxation may be expended only for a public purpose, and, unless the purpose in view may be reasonably so classified, the act conflicts with article 2, § 29, of our Constitution. By this section the general assembly is empowered to authorize incorporated towns to impose taxes for corporation purposes only. Is the proposed purpose a corporation, that is, a public, purpose?

It is frequently said and generally recognized that it is not easy to define with accuracy a public purpose. The analogous question as to what is a public use, likewise difficult of precise definition, has frequently arisen in determining limitations upon the right of eminent domain, and authorities dealing with this subject have application. Leading cases in this court, discussing what constitutes a public use, are Ryan v. Louisville & N. Terminal Co. 102 Tenn. 111, 45 L.R.A. 303, 50 S. W. 744; and Alfred Phosphate Co. v. Duck River Phosphate Co. 120 Tenn. 260, 22 L.R.A. (N.S.) 701, 113 S. W. 410. It is recognized in these cases that the right exercised must be for a public use, not only in the sense that the public in general will be benefited, but that a continuing or fixed use will accrue to the public, including a reasonable degree of regulation or control, independent of the will of the private party who is the beneficiary of this exercise of sovereign power.

The exact question here presented

has not been directly dealt with by this court heretofore. Learned counsel for appellant cite, as tending to support their insistence, City of Memphis v. Memphis Gayoso Gas Co. 9 Heisk. 531; Hill v. Roberts, 142 Tenn. 215, 217 S. W. 826, and State ex rel. Thompson v. Memphis, 147 Tenn. 658, 27 A.L.R. 1257, 251 S. W. 46. The first of these cases dealt with the right of a municipality to assist in the promotion of a gas company by a subscription for stock. Water, light, and heat are such generally recognized necessities for the preservation of public health and safety that the right to apply public funds for such purposes has come to be universally conceded. Not only does the holding in that case not support the instant act, but in the course of the opinion in that case attention is called to the fact that gas is in a different class with respect to public convenience and necessity from. manufactured articles generally, such as "cotton and woolen goods,' and the court might well have added manufactured boxes, as contemplated in the instant case.

Nor is Hill v. Roberts, supra, in point. Bounties to soldiers who have served the state in time of war, and memorials in their honor, tending to sustain patriotism, have long been recognized as public purposes. Indeed, they have no private attributes. The recent case of State ex rel. Thompson v. Memphis also seems to us to be not controlling. This court in that case quite properly held the application of public funds by the city of Memphis to the payment of insurance for the employees of one of the city departments to be an expenditure for a public purpose. The opinion in that case clearly sets forth the reasons why this expenditure, in effect an addition to the compensation of these city employees, would tend to increase the efficiency of the public. service and provide against dependency. We are unable, however, to see that the approval therein given of the expenditure of public funds

is authority for the contention herein made, that public funds may be used to promote purely private enterprises with the hope that the public at large will derive incidental benefits therefrom. A distinction recognized by our courts in the eminent domain cases which called for a reservation in the public of a reasonable degree of control of the enterprise is applicable, and is here wholly wanting. For example, the proposed box factory will be privately owned and controlled so that, in the wages to be paid, the sale of its products and the prices to be fixed therefor, the earnings to be withdrawn by the private owners, and all other matters of management, including continuance of operation, or disposition of the business, the public will have no voice. Such contribution as will have been made from public funds in promotion of the business will be wholly unrepresented in the management and nonparticipant in the profits. Herein is suggested a distinction which runs through many of the cases in which courts have sustained as a public purpose enterprises instituted, or fostered, by the state, or one of its arms. While not a taking of stock in, or a direct donation to, a private enterprise, the element of inducement proposed to be given the enterprise to induce its location in Lebanon is absent, unless it be conceded that the concessions proposed constitute a material contribution, and this cannot be construed otherwise than as a donation to this extent of public funds in promotion of a private enterprise for profit. Under the plan proposed, the public furnishes the physical plant for a comparatively small consideration. The difference between an adequate return and the rental proposed to be paid constitutes the inducement and the contribution to the enterprise.

Counsel have cited Green v. Frazier, 253 U. S. 233, 64 L. ed. 878, 40 Sup. Ct. Rep. 499, and Jones v. Portland, 245 U. S. 217, 62 L. ed. 252, L.R.A.1918C, 765, 38 Sup. Ct.

Rep. 112, Ann. Cas. 1918E, 660, and a number of state decisions as supporting in greater or less degree the validity of the act now before us. Certain provisions of the North Dakota series of acts referred to in Green v. Frazier, supra, particularly the Home Building Act, bear some analogy to the act involved in the instant case. But not only did this legislation go to extreme limits, as plainly recognized by the Supreme Court of the United States, but the distinction hereinbefore noted finds application; that is to say, in the establishment and operation of the various enterprises provided for by the North Dakota acts, control is reserved in the public, which administers the affairs of business contemplated primarily for the public benefit and not for private profit. This important element of public use, or purpose, is therefore preserved. This may also be said of all the cases to which our attention has been called by counsel as illustrating the extension of the doctrine of public purpose. As bearing directly upon the plan provided for by the act under consideration, we quote with approval the following paragraphs from Ruling Case Law.

"The promotion of the interests of individuals, either in respect of property or business, although it may result incidentally in the advancement of the public welfare, is, in its essential character, a private and not a public object. However certain and great the resulting good to the general public, it does not, by reason of its comparative importance, cease to be incidental. The incidental advantage to the public, or to the state, which results from the promotion of private interests, and the prosperity of private enterprises or business, does not justify their aid by the use of public money raised by taxation, or for which taxation may become necessary." Vol. 26, p. 46.

"It is well settled that money raised by taxation cannot be lawfully expended to contribute aid to any kind of manufacture carried on by

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