43 F. 323 | U.S. Circuit Court for the District of Southern California | 1890
This action was commenced in one of the superior courts of the state on the 7th of February, 1889. Among other tilings, the complaint alleges, in substance, that during the times therein mentioned the plaintiff was and still Is a corporation duly organized and existing under the laws of the state of California, for the purpose, among other purposes, of buying, selling, and otherwise disposing of lands, waters, and water-rights; and that from the time of its organization until May 2, 1888, the defendant was one of its directors. That on the 29th of June, 1887, defendant, while such director, entered into a contract with plaintiff by which defendant was constituted sole agent of the corporation plaintiff for the selling of its lands, with his compensation fixed at $100 per month, and 6 per cent, commissions on all sales, which compensation, the complaint alleges, “was an exorbitant, unjust, and unconscionable sum.” It alleges that many sales of the lauds of the corporation made under the agreement mentioned were made upon credit, without any payment being made to the corporation; that many sales were never completed, from which no consideration was realized by it, and were afterwards canceled or “treated as null and void,” yet on all these transactions defendant charged against the corporation, and was allowed, commissions to the máximum extent provided for by the contract under which he acted. “That, in the capacity of agent, as aforesaid, and dis
The defendant being, at the tirne of the bringing of the suit, a resident of the state of Kentucky, the plaintiff caused summons to be served upon him by publication, pursuant to that provision of the Code of Civil Procedure of California providing for such service in cases where the person on whom it is to be made resides out of the state. On the 8th of October,-1889, the defendant appeared in the state court for the special and only purpose of moving the court to set aside the attempted service of summons, on the ground that the action is one in personam, and, the defendant being a non-resident of the state, service by publication is void. The motion was overruled by the state court, to which action the defendant excepted, and tendered his bill of exceptions, which was settled. Thereupon the cause was, on defendant’s motion, removed to this court, and here the defendant, disclaiming any general or voluntary appearance, moves the court to dismiss the suit upon the same grounds urged by him in the state court for the quashing of the service of summons. His special appearance in the state court for the purpose of calling attention to the alleged illegality of the service was in no respect a waiver of such illegality, if it in fact existed. Harkness v. Hyde, 98 U. S. 479; Powers v. Braly, 75 Cal. 238, 17 Pac. Rep. 197. It is, however, contended for the plaintiff that, defendant having submitted to the state court the question of the validity of the service upon him, and that court having held it valid, the case comes here with that adjudication in force, and that it must therefore be here considered that the state court acquired jurisdiction of the defendant by the service in question, and therefore this court will take jurisdiction, even though it would not have acquired such jurisdiction had the case been commenced here. In none of the cases referred to by counsel do I find that the precise point now made was decided. In Brooks v. Farwell, 4 Fed. Rep. 166, relied on by the plaintiff, the state court having ruled in effect that the facts set up by the defendant to defeat the servicie of summons could, under the Code of the state, he pleaded by answer, the circuit court held that it must accept as correct and conclusive the rilling of the state court in respect to the proper practice under the state statutes, and, in accordance with that ruling, that the plea must be received in the circuit court. The cause was doubtless an action at law, in which the rules of practice in the state court would prevail in the circuit court. In Loomis v. Carrington, 18 Fed. Rep. 98, also relied upon by the plaintiff, it was held that in cases removed from a state court the circuit court will not review an order made prior to the removal, if the state court acted within its jurisdiction, but will take the case precisely as it finds it, accepting all prior decrees and orders as adjudications in the cause. In Duncan v. Gegan, 101 U. S. 810, the supreme court said that “ the circuit court, when a transfer is effected, takes the case in the condition it was when the state court was deprived of its
“ There was, in fact, no appearance entered in the state court, unless the filing of a petition and the giving a bond constituted-an appearance; but I think it was not, in any event, such an appearance as to deprive the defendant of the right to make objections in this court to the service of summons. In-fact, it may have been, among other reasons, for the very purpose of objecting to the service of summons that defendant requested that the cause should be removed to the federal court, because in a proper case a party has the right to the opinion of the federal court on every question that may arise in the case, not only in relation to the pleading and merits, but to the service of process ; and it would be contrary to the manifest intent of the act of congress to hold that a party who has a right to remove a catase is foreclosed as to any question which the federal court can be called upon under the law to decide; and I have no doubt this is such a question.”
On the contrary, it was said by Mr. Justice Curtis, in Sayles v. Insurance Co., 2 Curt. 212, and, it seems to me, with great force, that the de
“Appears in the state court, files a petition to remove tile action, gives a bond to enter it in the circuit court, and actually enters it there, he has thereby waived any personal privilege he might have had to bo sued in another district. If pleading t,o the action amounts to a waiver of such a privilege, upon the ground that he ought not afterwards to be heard to object to the means by which he was brought into court, I do not perceive why these proceedings should not have the same effect. The defendant comes in, becomes the actor, treats the suit as one properly instituted, removes it to another court, and enters it there, and then says he was not obliged to appear at all, and the state court in effect had no suit before it. This, 1 am of opinion, he cannot do. I consider that this court will not look back to inquire into or try the question whether the state court liad jurisdiction. The act of congress allows defendants to remove actual and legally pending suits from the state courts. If this was not such a suit, the defendant should not have brought it here. I3y bringing it here he voluntarily treats it as properly commenced and actually pending in the state courts, and lie cannot, after it has been entered here, treat it otherwise.”
In answer to the suggestion that ibis would prevent citizens of other states from trying in the federal court the question whether the state court had jurisdiction, the justice said:
“¡STotso. If the state court had no jurisdiction, and the defendant does not appear, its proceedings are all void, and may be shown to be so in an action brought in this court against any one who meddles with the person or property of the defendant under the color of such proceedings. The only objections which the defendant will be precluded from trying hero are technical objections which do not affect the merits; and I see no good reason why he should not bo prevented from trying them here. ”
From the view 1 take of the nature of the present action it becomes unnecessary to decide whether the bringing and entering of the suit here by the defendant was such an appearance as precluded the objection to the exercise of jurisdiction over him, or -whether the decision of the state court that the service of summons upon defendant was a valid service is an adjudication of that question binding upon this court. Idle object of the suit, in part, is to reach and control the title to certain .lands and water, and certain interests in certain other lands situated in this state and within this judicial district. To the extent, at least, of determining the title to and interests in the lands and water in question, L think the service of summons on defendant by publication, concerning the regularity of which no question is made, was a valid service under the state statutes, and sufficient to authorize a valid decree in the suit. Whether, should the facts warrant it, such decree may also establish a trust in respect to the moneys and other property alleged to have been unlawfully received by defendant, and include a valid money judgment against him, under the principle that, where jurisdiction is acquired against the person by the service of process or by a voluntary appearance, a court of general jurisdiction will settle the matter in controversy between the parties, need not now be determined. In the late case of Arndt v. Griggs,
“It would doubtless be within the power of the state in which the land lies to provide by statute that if the defendant is not found within the jurisdiction, or refuses to make or to cancel a deed, this should be done in his behalf by a trustee appointed by the court for that purpose.”
And in Arndt v. Griggs it is added:
“Of course it follows that, if a state has power to bring in a non-resident by publication for the purpose of appointing a trustee, it can in like manner bring him in and subject him to a direct decree.”
The court in Arndt v. Griggs cited and reviewed the cases upon the subject at length; among others that of Boswell’s Lessee v. Otis, 9 How. 336, where, said the court,—
“Was presented a case of a bill for a specific performance and an accounting, and in which was a decree for specific performance and accounting, and an adjudication that the amount due on such accounting should operate as a judgment at law. Service was had by publication, the defendants being nonresidents. The validity of a sale under such judgment was in question. The court held that portion of the decree and the sale made under it void; but, with reference to jurisdiction in a case for specilie performance alone, made these observations: Jurisdiction is acquired in one of two modes: First, as against the person of the defendant, by the service of process; or, second, by a procedure against the property of the defendant within the jurisdiction of the court. In the latter case the defendant is not personally bound by the judgment beyond the property in question, and it is immaterial whether the proceeding against the property be by an attachment or by bill in chancery. It must be substantially a proceeding in rem. A bill for the specific execution of a contract to convey real estate is not strictly a proceeding in rem in ordinary cases; but, where such a procedure is authorized by statute on publication without personal service of process, it is substantially of that' character. ”
If a bill for the specific execution of a contract to convey real estate is substantially a proceeding in rem, where by statute service of process in such suit may be had by publication, surely a suit to establish a trust in real estate is of the same character in cases where the statute authorizes a similar service. In the case of Pennoyer v. Neff, 95 U. S. 714, 727-734, in which the question of jurisdiction in cases of service by publication was considered at length, the court, by Mr. Justice Field, thus stated the law:
“Such service may also be sufficient in cases where the object of the action is to reach and dispose of property in the state, or of some interest therein, ■ by enforcing a contract or lien respecting the same, or to partition it among different owners, or, where the public is a party, to condemn and appropriate it for a public, purpose. In other words, such service may answer in all actions which are substantially proceedings in rem. * * * It is true that*329 in a strict sense a proceeding in rem is one taken directly against property, and has for its object the disposition of the property without reference to the title of individual claimants; but, in a larger and more general sense, the terms are applied to actions between parties where the direct object is to reach and dispose of property owned by them or of some interest therein. Sucli are eases commenced by attachment against the property of debtors, or instituted to partition real estate, foreclose a mortgage, or enforce a lien. So far as they affect property in the state they are substantially proceedings in rem, in the broader sense which we have mentioned.”
The principle of these cases, in my opinion, sustains jurisdiction here to the extent, at least, of settling the rights of the parties in respect to the real property in question. The motion to dismiss the suit is denied.