226 F. 893 | N.D. Cal. | 1915
The ohj action gives rise to the question whether an action, although transitory in character, may, against the objection of the defendant,
Both cases present instances like the present of attempts to secure jurisdiction of. a nonresident corporation on a cause of action arising in a state other than that in which the- action was brought, by service of process under state statutes similar to that of this state providing for service upon nonresident corporations doing business in the state. In both cases, judgment was obtained by default, but in each instance, when eventually coming for review to the Supreme Court of the United States, the judgment was held nugatory and void upon the ground, in substanóe, that, while every state has, within certain limitations, the right to provide for service of process upon foreign corporations doing business therein, and may prescribe, in default of the naming by the corporation of an agent on whom service may be made, that the same shall be had on some officer of the state, this power is limited to'instances where the action is based upon transactions had or business done within the jurisdiction of the state wherein the service is had. “Otherwise,” as put in the Simon Case, “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.” And it is held that such process in an action based upon a transaction not arising within the state is ineffectual to confer jurisdiction of the person of the defendant or constitute that due process of law essential as the foundation of every yalid judgment.
It is true, as suggested by plaintiff, that the court in those cases was considering primarily the sufficiency of the process to subject the defendant to the local jurisdiction; but the reasoning, upon which the court proceeds indicates clearly, I think, that jurisdiction of the person of the defendant should be made to appear by proper averment. In the Old Wayne Case, it is said:
“Conceding, then, that by going into Pennsylvania, without first complying with its statute, the defendant association may be held to have assented to the service upon the insurance commissioner of process in a suit brought against*895 it there in respect of business transacted by it in that commonwealth, such assent cannot properly be implied where it affirmatively appears, as it does here, that file business was not transacted in Pennsylvania. * ® * While the highest cvnsidorn lions of public policy demand that an insurance corporation, entering a state in defiance of a statute which lawfully prescribes the terms upon which it may exert its powers there, should be held to have assented to ¡such terms as to business there transacted by it, it would be going very far to imply * * '' such assent as to business transacted in another state, although citizens of the former state may be interested in such business.”
And the court conclude:
“As the suit, in the Pennsylvania court was upon a contract executed in Indian;!, as the personal judgment in that court against the Indiana corporation was only upon notice to the insurance commissioner, without legal notice to the defendant association and without its having appeared in person, or by attorney or by agent In the suit, and as the act of the Pennsylvania court in rendering fhe Judgment must ho deemed that of the state within the meaning1 of the fouriesnth amendment, wo hold that the judgment in Pennsylvania was not entitled to the faith and credit which by the Constitution is required to he given to fhe public acts, records, and judicial proceedings of the several states, and was void as wanting in due process of law.”
While, as indicated, service of process in that case was had upon a designated official of the state, and not an agent of the corporation, the language employed by the court is, as suggested by counsel for defendant, obviously as applicable to the latter case as to the former, since manifestly, under the principles announced by the court, the basis of all process on a foreign corporation is its actual or implied assent, by entering the state and doing business there, to its being served in accordance with the statute of the state, whether such service be had on an officer of the state or an agent of the corporation. In either case, such assent without the voluntary appearance of the defendant may only be implied as to process in actions founded on con; racks originating within the state of service.
Agaitt, in the Simon Case, which, like the present, was an action for personal injuries, referring to what had been decided by it in the Old Wayne Case, it is said:
“Prom f.he principle announced in that case it follows that service under the Ijouisiaim statute would not be effective to give the district court of New Orleans jurisdiction over defendant as to a cause of action arising in the state of Alabama. The service on the Southern Hallway, even if in compliance with tin; requirements of Act No. 54, was not that kind of process, which, could give the court jurisdiction over the person of the defendant for a cause of action arising iu Alabama. As the company made no appearance, file default judgment was void. Being void, the person acquired no rights, thereby, and could be enjoined by a federal court from attempting to enforce what is a judgment in name, but a nullity in fact.”
'l'he effect of these principles is that it is not enough in such a case that the foreign corporation he doing business in the state where sued, but it must appear that the cause of action arose from the business there done. This requisite is thus made a fact essential to confer jurisdiction of the defendant; and manifestly what must be proved in the wav of substantive fact must be alleged. Southern Pac. R. Co. v. Coodrich (C. C.) 57 Fed. 879, 882.
For these reasons, the demurrer to the complaint will be sustained.