Clarke v. New Jersey Steam Nav. Co.

1 Story 531 | U.S. Circuit Court for the District of Rhode Island | 1841

STORY, Circuit Justice.

No question has been made at the bar, that the case stated in the libel is a case of admiralty and maritime jurisdiction, it being founded in a maritime contract, and asserting, as a breach thereof, a maritime loss by negligence. The Orleans v. Phoebus, 11 Pet. [36 U. S.] 175-184. Neither has it been doubted, that the process of attachment well lies in an admiralty suit against the property of private persons, whose property is found within the district, although their persons may not be found therein, as well to enforce their appearance to the suit, as to apply it in satisfaction of the decree rendered in the suit. Ever since the elaborate examination of this whole subject, in the case of Manro v. Almeida, 10 Wheat [23 U. S.] 473, this question has been deemed entirely at rest.

The real point of controversy is, whether the respondents, being a corporation created by, and having its corporate existence and organization in the state of New Jersey, is, as a foreign corporation, liable to a suit, in personam in the admiralty in this district, not directly, but indirectly through its attachable property here, so as to compel the appearance of tlio corporation to answer the suit, or at all events to subject the property attached to the final judgment and decree of the court. The whole argument turns upon this proposition, that there is a distinction between the case of a private person, and that of a corporation. The former is suable in the admiralty by process of attachment in a suit in personam, against his property found in the district, although he may not personally be found within the district; whereas a corporation is liable to be sued only in the state, where it has its corporate existence, and from which it derives its charter,, and not elsewhere, although its property may be found in the district, where the suit is brought. If the present were a suit in rein against the property to enforce a right of property or a lien, or to subject it, as the offending thing, (as in cases of collision,) to the direct action of the court, the case could not admit of any real doubt; for in all proceedings in rem, the court having jurisdiction over the property itself, it is wholly unimportant, whether the property belongs to a private person or to a corporation, to a citizen or to a foreigner, to a resident or to a non-resident, to a domestic or to a foreign corporation. In each and in every such case tho jurisdiction is complete and conclusive. If the case were one exclusively dependent upon the local law of Rhode Island, the jurisdiction of the court would be equally clear-, for by the statute of Rhode Island of January. 1840 (Sess. Acts, p. 103), it is enacted, that “when any incorporated company, established without this state, shall be indebted or liable to any person or persons, the personal and real estate of such company shall be liable to be attached and held to answer any just, debt and demand.” And the mode of serving the process is specially pointed out by the act.

The exemption of the corporation is sought to be established upon ouier grounds; first, upon the ground, that 1he state law is not applicable to an admiralty suit, the state being incapable of conferring or taking away the jurisdiction of the courts of the United States; and next upon the ground of the non-amenability of a foreign corporation to answer in any suit in any other state, than that, from which it derives its corporate existence and charter, upon the principles of the common law, which furnish a just authority or analogy for a similar rule in courts of admiralty. It maj’ well be doubted, whether the principles of the common law, as to process and proceedings, can be properly imported into courts of admiralty, to regulate their process, or proceedings, or jurisdiction. It is plain, that the supreme court of the United States in Manro v. Almeida, 10 Wheat [23 U. S.] 473-490, repudiated any such doctrine, and treated it as a grave mistake to suppose, that the process of attachment in the admiralty was borrowed from the foreign attachment by the custom of London; or, indeed, that it had any other origin than in the civil law. But the argument, founded on the supposed analogies of the common law, is not as stringent, as has been supiiosed. The process of the common law could not reach foreign corporations, for the plain reason, that they were not inhabitants of and had not any corporate existence within the realm. But this was equally true in respect to natural persons, not inhabitants of, or found within the realm. Foreigners, who were nonresidents, could not be served with process to appear in any of the courts of common law, nor could their property be attached to compel their appearance. Whenever and wherever, in any such cases, process can be served upon the property, either of foreign corporations, or of foreign natural persons, who are non-residents, the authority to do so results either from special custom, or from statute provisions. See Com. Dig. “Attachment,” B. D.

The cases cited at the bar all turn upon this distinction. In McQueen v. Middletown Manuf’g Co., 16 Johns. 5, the only question was, whether a foreign attachment, under the foreign attachment act of New York, lay against the property of a foreign corporation; and it was held, that no such attachment did lie upon tho true interpretation of the act; and, indeed, that it could not lie against a domestic corporation; for it could not conceal itself or abscond. The court, upon that occasion, said, that a foreign corporation could not be sued in New York; for the process against a corporation must be served upon its head or principal officer within the jurisdiction of the sovereignty, where this artificial body exists. That is clear enough upon the principles of the common law, as already stated. Tho case of Peckham v. North Parish of Haverhill, 16 Pick. 274, 285, 286. merely affirms the same doctrine, that foreign corporations are without the jurisdiction of the courts of the state. But it so happens, that an oi>-posite doctrine has been asserted, as to the operation of the local laws of Pennsylvania, in cases of the process of foreign attachment; and it has been there held, that foreign corporations are within the reach of that process. Bushel v. Commonwealth Ins. Co., 15 Serg. & R. 176. The decision in the case of Wilson v. Graham [Case No. 17,804], and that of Ex parte Graham [Id. 5,658], turned upon other considerations. But the court there affirmed a principle, which seems directly applicable to the present case; and that is, that it is essential to give jurisdiction to the district and circuit courts of the United States in any district, that the person or the thing, against which the proceedings are directed, should be within their local jurisdiction. Now, here the thing is within the jurisdiction, and it may be added, that even in suits in personam only, if a person, who is out of the jurisdiction, chooses to appear and defend the suit without objection, there is nothing to prevent the courts of the United States from entertaining the suit, if otherwise unexceptionable; for his appearance without process is a waiver of the objection of the non-service of process within the district; and the case does not fall Within the prohibitory clause of the eleventh section of the judiciary act of 1789. c. 20 [1 Stat. 73]. This is clearly established. See Harrison v. Rowan [Case No. 6,140]; Gracie v. Palmer, 8 Wheat. [21 U. S.] 699; Pollard v. Dwight, 4 Cranch [8 U. S.] 421; Knox v. Summers, 3 Cranch [7 U. S.] 496; Logan v. Patrick, 5 Cranch [9 U. S.] 280. It was applied to the very case of a foreign attachment against the property of non-resident defendants, in the case of Pollard v. Dwight, 4 Cranch [8 U. S.] 421, where it was held, that the appearance of the defendants was a waiver of all objections to the non-service of process upon them within the district, where the suit was brought. There is nothing in the nature or character of a corporation, which prevents it from falling within the scope of the same doctrine. The case of Flanders v. Aetna Ins. Co. [Case No. 4,852], is directly in point, on this very question; for, there, the corporation was a foreign corporation; and it was held, that the jurisdiction attached, and the non-service of process within the district did not present any obstacle to the proceedings, as the corporation had appeared and defended the suit; and it was but a privilege to the corporation to be sued within the district, where it was established, which it was at full liberty to waive. The supposed authorities, then, at the common law, which have been relied on, furnish no ground, on which the present objection can be sustained. They all turn upon this simple proposition, that a foreign corporation cannot be compelled to appear and defend a suit in any other state, than that, where it is created and established. unless the local law otherwise provides, and property or effects of the corporation can •be found, and by the local law can be attached, to respond the exigency of the suit, or to compel an appearance thereto. If the local law provides such a x’emedy, then it is competent for the local tribunals to exert it against the foreign corporation. Now. it is precisely in this very view, that the jurisdiction of the courts of admiralty applies. That jurisdiction may be executed, not only against persons, found within the district, but also by attachment against their property, found within the district, although the persons are not there. This was the very point decided (as we have seen) in Manro v. Almeida, 10 Wheat. [23 U. S.] 473. So that the jurisdiction is as complete, when the property is found within the district, as it is, when the person is there.

What difference, then, can it make upon principle, whether the owner of the property be a natural person, or a corporation? In each case, where the court acts upon the property', it acts solely in rem; and it is at the option of the owner, whether he will appear and allow the proceedings to go on in personam, or not. What ground is there to say, that a foreign corporation may not appear and defend its rights of property, as well as a natural person in a foreign jurisdiction? In all proceedings directly in rem, this is the universal rule and practice. It is difficult to perceive, why it is not equally true, where the property is before the court, to be subjected to its action; for unless there is an appearance and a general de-fence, the decree of the court ultimately binds and acts in rem only upon the thing, which is attached.

But upon the principle, what is the foundation of the objection? It is exceedingly clear, that a foreign corporation may sue in another jurisdiction. Not to multiply authorities upon so clear a point, I will simply refer to the case of Bank of Augusta v. Earle, 13 Pet. [38 U. S.] 519, 520, 587-591, where Mr. Chief Justice Taney, in delivering the opinion of the court, examined the subject, as well upon principle as upon authority. If a foreign corporation may sue, it may also be sued in another jurisdiction, at least to the extent of subjecting its property, found within the jurisdiction, to the process and decree of the courts thereof, upon the acknowledged principle, that all persons and all property found within the territorial limits, of any sovereignty, are subject to its authority and laws. This is a well established doctrine of international law. Story, Oonfi. Laws, §§ 530-G1S. Even the property of foreign sovereigns has not been deemed exempt from this territorial jurisdiction; and courts of admiralty have not unfrequently exerted their authority over such property. U. S. v. Wilder [Case No. 16,694]. Bynkershoek and other jurists maintain, that the private property of foreign sovereigns, whatever may be the case as to public property, is subject to the local jurisdiction of the courts, where it is found. Bynk. De Foro Legatorum, cc. 3, 4; S. P. cited [The Exchange v. McFaddon] 7 Cranch [11 U. S.] 123, 126; The Prins Frederik, 2 Dods. 458-462; Mart. Daw Nations, B. 5, § 9.

Upon the whole, I find no sufficient authority upon principles of general -law. or maritime law, or admiralty law, to maintain the distinction contended for between the cases of an attachment of the property of a foreign corporation, and that of a private person, so far as the process of the admiralty is concerned. The exceptive plea or allegation to the jurisdiction of the court must, therefore, be overruled, and the corporation be assigned to appear and answer over to the merits of the cause; otherwise proceedings will be had upon their default against the property, as in other like cases.