Kilpatrick v. Texas & P. Ry. Co.

• Decision Date: 04 March 1948
• Docket Number: 170,20864.,Dockets 20863,No. 169,169
• Parties: KILPATRICK v. TEXAS & P. RY. CO. PARKER v. SAME.
• Court: U.S. Court of Appeals — Second Circuit

166 F.2d 788 (1948)

KILPATRICK v. TEXAS & P. RY. CO. PARKER v. SAME.

Nos. 169, 170, Dockets 20863, 20864.

Circuit Court of Appeals, Second Circuit.

March 4, 1948.

Arnold B. Elkind, and Gerald F. Finley, both of New York City, for appellants.

William H. Timbers and Davis Polk Wardwell Sunderland & Kiendl, all of New York City (Theodore Kiendl and Cleveland C. Cory, both of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and FRANK, Circuit Judges.

L. HAND, Circuit Judge.

These are appeals in two actions at law under the Federal Employers' Liability Act.¹ As the complaints, motions and affidavits, and the court's action upon them were the same in both actions, it will be plainer to speak of them as though there had been only one. Each appeal is from two orders: One vacated a notice of dismissal served by the plaintiff before answer, and stayed the further prosecution of an action commenced later in the same court upon the same claim by the same plaintiff against the same defendant; the other denied the plaintiff's motion for leave to examine witnesses upon deposition, in order to ascertain whether the defendant was "doing business" in the Southern District of New York within the meaning of § 6 of the Act; and dismissed the action because from the defendant's affidavits it appeared that it was not doing so. The facts disclosed by the affidavits were as follows. The defendant operates a railroad in Texas, Arkansas and Louisiana, and the plaintiff was severely injured while in its employ in Texas. He sued in the Southern District of New York, and he alleges that the following local activities of the defendant are enough to subject it to jurisdiction in personam in that district. It maintains an office of eight employees who continuously solicit business in New York, both passenger and freight. The passenger business so secured is booked by the "Consolidated Ticket Office" in the City of New York, which issues tickets — including coupons for passage over the defendant's lines — collects the fares and accounts to the defendant. It does not appear in detail how the freight business is conducted, but we assume that agents of the initiating carriers issue joint way bills and bills of lading over routes which include the defendant's lines; and collect and account, as in the case of passenger traffic. The defendant has a financial agent in New York which transfers its shares, and pays the dividends and interest on its shares and bonds and equipment trust certificates. It sells no tickets here and carries on none of the other added activities which — coupled with the activities just described — caused us in Barnett v. Texas & Pacific Railway Company² to declare that it was "present" in New York in a case depending upon diverse citizenship.

The defendant moved to dismiss the complaint upon the grounds (1) that its local activities were not "doing business" within § 6; (2) that to force it to trial two thousand miles from the place of the injury was an undue burden on interstate commerce; and (3) that the plaintiff had not served the agent required by the statute. (The last objection was eventually withdrawn.) The plaintiff countered by a motion to examine all the employees of the defendant who were in New York, some of those of its fiscal agents, and some of those of the "Consolidated Ticket Office." Shortly thereafter he began a separate action by service upon another agent of the defendant (this to obviate the third objection), and the defendant rejoined with a motion to stay this second action until the judge should dispose of the motion to dismiss. The plaintiff thereupon served a notice of dismissal of the first action under the Rules,³ which the defendant followed by moving to vacate the notice. Out of this thicket of procedure the judge emerged as follows. He refused to allow the plaintiff to examine witnesses by deposition; he vacated the notice of dismissal; and he dismissed the first action because he was satisfied from the defendant's affidavits — the plaintiff filed none — that it was not "doing business" within the meaning of § 6. Pending this decision he had stayed any proceedings in the second action. The result was to leave the plaintiff formally free to go on with the second action, but to make certain that it would be dismissed, if he attempted to do so. (The record does not show whether the second action is still outstanding.) At the outset we shall address ourselves to the chief controversy, which is whether the defendant is subject to suit in personam because of the local activities we have described.

In Baltimore & Ohio R. Co. v. Kepner⁴ and Miles v. Illinois Central R. Co.⁵ the Supreme Court held that, once a railroad "did business" in any jurisdiction, § 6 subjected it to personal service regardless of how much inconvenience or expense was involved in trying the action far away from the scene of the accident and the residence of all the defendant's witnesses. It followed that a plaintiff might, as here, select that jurisdiction which promised the richest harvest, and the railroad must meet him on his chosen ground. These decisions unconditionally eliminated from § 6 any considerations of "forum non conveniens," and so the Court explicitly recognized in Gulf Oil Corporation v. Gilbert,⁶ in which it did allow that plea in abatement in a case depending upon diversity of citizenship. Nevertheless, there remained the question what constituted "doing business" under § 6, and, in particular, whether the same factors determined it as determined a corporation's "presence" in actions where no statute expressly prescribed the venue. So far as we have been able to find, the only courts which have passed upon that question, have assumed that the two phrases had the same meaning.⁷ We cannot agree, for in 1945 the Supreme Court so restated the whole doctrine of corporate "presence" as to make it no longer possible to hold it identical with "doing business" under § 6.⁸ The corporation there at bar maintained a local agency for the continuous solicitation of business, but it denied that it had gone any further, or at any rate that it had gone far enough to subject it to an action in personam under Green v. Chicago, Burlington & Quincy Railway Co.⁹ The Court did not overrule that decision; but it did give a new explanation to corporate "presence," for it held that in order to determine that question the court must balance the conflicting interests involved: i. e., whether the gain to the plaintiff in retaining the action where it was, outweighed the burden imposed upon the defendant; or vice versa. That question is certainly indistinguishable from the issue of "forum non conveniens." Therefore, as we understand it, when a railroad is "doing business" continuously outside the state of its incorporation, § 6 makes irrelevant any question of "forum non conveniens"; but, when a railroad or any other corporation is doing business continuously outside the state of its incorporation, that "presence" which subjects it to personal service in actions for which no venue is specifically provided, depends upon the issue of "forum non conveniens."

The necessity that the corporation shall be "present" at all arises from the territorial limitations of the power of a state — legislative, executive or judicial — in dealing with the legal relations of a person not in allegiance. In the case of individuals it has of course been long recognized that the defendant must, ordinarily, be subject to a capias when the action is begun, if a judgment against him in personam is to be valid.¹⁰ The same doctrine applies to corporations; but, since a corporation — whether it be regarded as a fabricated jural person, or an aggregate — is not identical with its members, spatial attributes can be ascribed to it only where its communal purposes are realized. It cannot be present in a place where none of its activities take place, and, literally at any rate, it is present wherever any of them do take place. It would therefore seem that, so far as it must be "present" in order to satisfy the territorial limitation upon the powers of a court when acting in...