Kem Manufacturing Corp. v. Kentucky Gem Coal Co.

HOWARD, Judge. The issue of this appeal is whether in an action against a corporation, venue under K.R.S. 452.450 is conferred by the designation of a registered office and agent. Both parties to this litigation are corporations. The appellant, Cerfact Laboratories, and the appellee, Kentucky Gem, entered into a contract in Clay County, Kentucky, which called for the appellant to deliver certain goods to the appellee in Clay and Laurel Counties. As a dispute arose concerning these business dealings, the appellant sought to institute a civil action against the appellee. Upon inquiry to the office of the Secretary of State, it was discovered that the registered office and agent of the ap-pellee was located in Jefferson County. A suit to collect money upon an open account was thereby brought in Jefferson Circuit Court. On June 20,1979, the complaint was dismissed for lack of venue under K.R.S. 452.450, with the court noting that the ap-pellee’s principal place of business is in Whitley County and that the appellee maintained no office in Jefferson County other than that of the registered agent. K.R.S. 452.450 designates the proper forum in which venue may be conferred in actions against a corporation. Among other options, the statute allows the suit to be brought in the county in which the corporation has an office or a place of business. The instant action was initiated in Jefferson County, the county in which the appel-lee maintains a registered office and agent as required by K.R.S. 271A.060. The sole purpose of the office, insofar as the appel-lee is concerned, is to meet the statutory requirements wherein service of process may be made. The trial court determined that the mere presence of a registered office and agent is not sufficient to establish venue. Apparently, this is a case of first impression in this jurisdiction. We are, however, directed to Hill v. Cumberland Dairies, Ky., 288 S.W.2d 341 (1956), in which the Court dealt with a similar venue problem. In the [914] Hill case, the plaintiff brought a contract action in Laurel County where the defendant corporation maintained a gathering station for raw milk. The lower court dismissed the action for lack of venue on the ground that the defendant’s chief office was located in another county. The Court of Appeals reversed, noting that K.R.S. 452.450 refers to an office or place of business rather than the chief office. The Court went on to address the defendant corporation’s argument that the statute required “a principal office” and stated: It may be said the statute contemplates that the corporation is doing business in the particular county to such an extent that it is actually present there and has such a responsible agent in the county as would presumptively bring home to the corporation notice of summons served upon him as its representative. Id. at 343. (Emphasis added). This language would appear to require that in order for venue to be established, some actual business must be conducted in the county. We do not feel, however, that this case is dispositive of the issue at hand as the Court therein was not faced with a situation in which the plaintiff was seeking to establish venue in the county in which the registered office and agent were located. The fact that this office and agent are required to be registered with the Secretary of State and thus placed in the public record is of great significance. Even prior to the adoption of the Kentucky Business Corporation Act, this State has required corporations to maintain an office, formerly labeled designated office, in which service of process could be made. The purpose of this requirement was explained by the Court, while addressing a similar venue issue, in Job Iron & Steel Co. v. Clark, 150 Ky. 246, 150 S.W. 367 (1912). As a rule, corporations doing business in this state have a designated office or place of business in some county in the state, or a designated chief officer or agent residing in some county in the state, and thus every person dealing with the corporation knows with certainty in what county he may bring an action against it. Id. at 369. The importance of achieving this certainty in establishing where an action may be brought against a corporation cannot be underestimated. There is an abundance of corporations doing business within the State, many with offices throughout the Commonwealth. It is clear that both K.R.S. 271A.060 which requires that each corporation maintain a registered office and agent and K.R.S. 452.450, which designates venue in actions against corporations, were designed to insure that the corporations would be accessible. to litigation. The drafter’s comment to the Model Business Corporation Act, from which Chapter 271A of the Kentucky Revised Statutes evolved, in explaining the requirement for a registered office and agent states: They are based upon the premise that it should be possible at all times to find a corporation and to have a person upon whom and a place at which any notice or process required or permitted by law may be served.... 1 Model Business Act Annotated § 12, Registered Office and Agent. Certainly, to allow the appellee to prevail in this action would be to defeat the purpose for which these statutes were promulgated. We therefore hold that it is the clear intent of the Legislature that a corporation may not defeat venue in an action brought in the court in which its registered office and agent is located. For these reasons, the judgment of the Jefferson Circuit Court is reversed. All concur.