Consolidated Textile Corp. v. Gregory
Headline: Court blocks Wisconsin from treating a brief visit by an out‑of‑state company president as consent to suit, ruling a short meeting does not make the corporation subject to state court process.
Holding: The Court held that serving the president while he was temporarily in Wisconsin for a meeting did not make the out‑of‑state corporation subject to Wisconsin court process, and it reversed the lower court’s judgment.
- Stops suing out-of-state companies based on a brief visit by an officer.
- Requires proof a company actually does business in the state for local service.
- Protects foreign corporations not licensed to do business from surprise local lawsuits.
Summary
Background
A Delaware-based textile company that was not licensed or doing business in Wisconsin had issued bonds that went into default. A Milwaukee attorney representing some bondholders brought lawsuits to recover unpaid interest. The company’s New York president traveled to Milwaukee for a meeting to discuss the New York litigation and to persuade the bondholder not to press final judgment. While he was in the attorney’s office for that meeting, summonses addressed to the corporation were served on him.
Reasoning
The core question was whether serving the company’s president during this brief visit made the company subject to Wisconsin court power. The Court reviewed the pleadings and affidavits and relied on prior decisions requiring that a foreign corporation be actually carrying on business in a State before it can be held there by local process. The Court found no facts showing the company was doing business in Wisconsin and concluded the selling activity of a related controlled subsidiary did not prove the corporation itself was present. Because the corporation was not shown to be subject to local jurisdiction, the Court reversed the lower court’s judgment.
Real world impact
The decision protects out‑of‑state companies that have no regular business or agents in a State from being haled into local courts simply because an officer briefly visited for a meeting. It requires plaintiffs to show a company is carrying on business in the State before getting local process. The Court reversed and sent the case back for further proceedings consistent with this ruling.
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