Blank v. Bitker

• Decision Date: 10 June 1943
• Docket Number: No. 8215.,8215.
• Citation: 135 F.2d 962
• Parties: BLANK v. BITKER.
• Court: U.S. Court of Appeals — Seventh Circuit

135 F.2d 962 (1943)

BLANK v. BITKER.

No. 8215.

Circuit Court of Appeals, Seventh Circuit.

June 10, 1943.

Philip E. Ringer, of Chicago, Ill., and Irving A. Puchner and B. F. Saltzstein, both of Milwaukee, Wis., for appellant.

Samuel E. Hirsch, Wm. Ruger, and Julian H. Levi, all of Chicago, Ill. (Wilhartz

& Hirsch, of Chicago, Ill., of counsel), for Albert J. Felman.

Hayes Kennedy, of Chicago, Ill. (Ryan, Condon & Livingston, of Chicago, Ill., of counsel), for appellee.

Before SPARKS, KERNER, and MINTON, Circuit Judges.

KERNER, Circuit Judge.

On August 20, 1939, a receiver of a national bank sued the defendants Felman and Bitker to recover on a guaranty, executed on May 15, 1924, guaranteeing the indebtedness of Joseph A. Mesiroff to the bank. Subsequently, Nat Blank was substituted as party plaintiff. Blank is the nominee of Felman, who purchased the bank's claim. The court, having tried the case without a jury, found for the plaintiff and rendered a judgment against the defendants for $13,736.91, from which Bitker appeals.

Since we do not decide (1) whether Mesiroff's note was paid; (2) whether the guaranty sued on was a continuing guaranty or only for an existing indebtedness; and (3) whether Bitker was damaged on the failure of the bank to notify him of Mesiroff's default, we shall not set out the disputed evidence.

The controlling facts, so far as they relate to the view we take of the case, are not in dispute. Bitker, for nearly fifty years, has resided in Milwaukee, Wisconsin, and service of process was made upon him there. Bitker had forgotten about the guaranty, and in order to gain the necessary information to answer plaintiff's complaint, took his deposition and received four extensions of time in which to answer. In his answer Bitker included defenses to the merits and a defense of lack of jurisdiction over his person because of his residence in Wisconsin and service of process on him there.

Bitker's answer was filed on December 8, 1939. Two weeks later plaintiff moved to strike the defense of lack of jurisdiction on the ground that Bitker, by answering to the merits, taking a deposition and obtaining extensions of time to answer, had waived his right to object to the jurisdiction and venue. The trial court denied the motion on May 29, 1940. December 15, 1941, an order was entered substituting Nat Blank of Terre Haute, Indiana, as plaintiff and directing that the complaint stand as the pleadings in the case. When, on June 18, 1942, the case was called for trial, Blank's attorney stated that Felman had purchased the cause of action of the original plaintiff for $3,000 and that Felman had acquired the note in settlement of the obligation to the bank on the guaranty. Prior to this time Bitker did not know that Felman had compromised the claim by buying it.

In our view, the decisive issue is whether Bitker had waived his right to assert lack of jurisdiction of the court over his person and improper venue by answering to the merits, obtaining extensions of time to answer, and taking a deposition. By denying plaintiff's motion to strike the jurisdictional defense, the court ruled that he had not waived it. By later deciding the case in favor of Blank, the court in effect reversed its position, thus holding that there had been waiver. We think the court's later decision was erroneous and that its earlier one was correct.

Plaintiff contends that there is no question of jurisdiction at all but only one of venue. Jurisdiction, he asserts, is predicated upon Section 24 of the Judicial Code, 28 U.S.C.A. ß 41(16), in that the original plaintiff was a national bank receiver acting under the direction of the Comptroller of the Currency and suing to recover a claim due and owing to the bank. This statute gives district courts jurisdiction of the subject matter of actions in connection with winding up the affairs of insolvent national banking associations. Schram v. Perkins, D.C., 38 F. Supp. 404; cf. Armstrong v. Trautman, C.C., 36 F. 275; Dinan v. First National Bank of Detroit, 6 Cir., 117 F.2d 459; Pufahl, Receiver, v. Estate of Parks, 299 U. S. 217, 225, 57 S.Ct. 151, 81 L.Ed. 133. But this does not answer the question of whether this particular district court ever obtained jurisdiction of the person of Bitker. Since the court must have had jurisdiction of the person as well as of the subject matter in order to sustain the judgment, Robertson v. Railroad Labor Board, 268 U.S. 619, 45 S.Ct. 621, 69 L.Ed. 1119; Buss v. Prudential Ins. Co. of America, 8 Cir., 126 F.2d 960; Commonwealth of Kentucky for Use and Benefit of Kern v. Maryland Casualty Co., 6 Cir., 112 F.2d 352, we must inquire whether it ever gained the legal power to act against Bitker.

Several reasons lead us to believe that the District Court never gained jurisdiction over Bitker. Rule 4(f) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides that, except where a federal statute states that process may run throughout the United States, process "may be served anywhere within the territorial limits of the state in which the district court is held." Bitker was served in Wisconsin, outside the boundaries of Illinois. Hence he was beyond the territorial limits of effective service. Munter v. Weil Corset Co., 261 U.S. 276, 43 S.Ct. 347, 67 L.Ed. 652; Moreno v. United States, 1 Cir., 120 F.2d 128.

Although Congress has the power to authorize a suit under federal law to be brought in any United States district court and to provide that process may run into any part of the United States, it has not done so by general law. Howard v. United States ex rel. Alexander, 10 Cir., 126 F.2d 667. No special statute is applicable here. We are not unaware of the statute, 28 U.S.C.A. ß 41(16), which (1) gives the district courts jurisdiction of cases for winding up the affairs of any national bank, and (2) permits process to run outside the district in which the district court is held in a suit by a national banking association established within the district, to enjoin the Comptroller of the Currency or a receiver acting under his direction. See 12 U.S.C.A. ß 195. While process may go beyond the territorial limits of the state in the second case, First National Bank v. Williams, 252 U.S. 504, 40 S.Ct. 372, 64 L.Ed. 690, the statute is clear that this grant does not extend to the first case. Accordingly, it is not decisive here.

A further cogent reason is the statute providing that no civil suit shall be brought in any district court against any person by an original process in any other district than that whereof he is an inhabitant. 28 U.S.C.A. ß 112(a). If the action is not based on diversity, this statute clearly confines the jurisdiction of actions in personam to the state of defendant's residence. Seaboard Rice Milling Co. v. Chicago, Rock Island & Pacific R. Co., 270 U.S. 363, 46 S.Ct. 247, 70 L.Ed. 633; Putnam v. Ickes, 64 App.D.C. 339, 78 F.2d 223. And the fact that defendant Felman is a resident of the district in which the action was started did not give the court jurisdiction over Bitker, who was served out of the state. Putnam v. Ickes, supra; McLean v. State of Mississippi ex rel. Roy, 6 Cir., 96 F.2d 741, 119 A.L.R. 670.

Plaintiff contends, however, that Bitker merely had a personal privilege respecting the place of suit, and that he could and did waive it by his conduct in connection with the proceedings. To be sure, as a general proposition, the locality of a lawsuit, though defined by legislation, relates to the convenience of litigants and as such is subject to their disposition. Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165, 168, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437; General Investment Co. v. Lake Shore & M. S. R. Co., 260 U.S. 261, 43 S.Ct. 106, 67 L.Ed. 244; Graver Tank & Manufacturing Corp. v. New England Terminal Co., 1 Cir., 125 F.2d 71. But we do not think Bitker waived his immunity.

On August 30, 1939, Bitker was served; he had completely forgotten that he had ever signed the guaranty and had never received notice of any transactions between Mesiroff and the bank or of any claim against him until that date. Consequently, in order that he might discover the facts of the transactions between Mesiroff and the bank, it was necessary for him to take the receiver's deposition before answering. In order to arrange a time for taking the deposition which was convenient to both parties, he obtained four extensions of time in which to answer. Hence his answer was not due till December 5, 1939, on which date Bitker's answer was served. Thus he was not in default, as plaintiff contends, because he did not file his answer till December 8, for there is no requirement in the Federal Rules of Civil Procedure as to filing. Rule 12(a) provides simply for service, not filing. And Rule 5(d) permits filing with the court within a reasonable time after service.

The postponement of the time of taking the original plaintiff's deposition by stipulation with approval of the court was in accord with the usual and customary courtesy extended by counsel in lawsuits. Extensions of time to answer frequently receive similar treatment. Here, no contention is made that the delay in answering caused any inconvenience to the plaintiff or prejudiced him in any way. It is significant that the original plaintiff in his motion to strike the defense of improper venue did not attempt to make Bitker responsible for the extensions of time to answer. On the motion, the then plaintiff's only contention was that the taking of the deposition and answering constituted a general appearance and a waiver of the venue defense. That was true prior to the adoption of the Federal Rules of Civil Procedure. Prudential Ins. Co. of America v. McKee, 4 Cir., 81 F.2d 508; Eldorado Coal & Mining Co. v. Mariotti, 7 Cir., 215 F. 51. But it is no longer true. See Schlaefer v. Schlaefer, 71 App.D.C. 350, 112 F.2d 177, 181, 182, 130...