236 U.S. 115 (1915), 34, Simon v. Southern Railway Company

Docket Nº:No. 34
Citation:236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492
Party Name:Simon v. Southern Railway Company
Case Date:January 25, 1915
Court:United States Supreme Court
 
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236 U.S. 115 (1915)

35 S.Ct. 255, 59 L.Ed. 492

Simon

v.

Southern Railway Company

No. 34

United States Supreme Court

January 25, 1915

Argued November 2, 3, 1914

APPEAL FROM THE CIRCUIT COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

United States courts, by virtue of their general equity powers, have jurisdiction to enjoin the enforcement of a judgment obtained by fraud or without service.

In the absence of service of process, a person named as defendant can no more be regarded as a party than any other member of the community.

A judgment against a person on whom no process has been served is not erroneous and voidable, but, upon principles of natural justice and also under the due process clause of the Fourteenth Amendment, is absolutely void.

Jurisdiction of the United States courts cannot be lessened or increased by state statutes regulating venue or establishing rules of procedure. While § 720, Rev.Stat., prohibits United States courts from staying proceedings in a state court, it does not prevent them from depriving a party of the fruits of a fraudulent judgment, nor from enjoining a party from using that which he calls a judgment but which is, in

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fact and in law, a mere nullity and absolutely void for lack of service of process. Marshall v. Holmes, 141 U.S. 589.

This rule obtains whether the case was one removed from the state court to, or originally commenced in, the federal court.

The broader the ground of a decision, the more likelihood there is of affecting interests of persons not before the court, and therefore this Court refrains from passing upon propositions not necessary to the decision of the case, although passed upon by the courts below.

Quaere whether the acts of the foreign corporation against whom judgment was entered amounted to doing business within the state.

Quaere whether, under the statute of Louisiana providing for service of process on foreign corporations doing business within the state, but who have not appointed an agent therein, by service upon the Secretary of State, service upon the Assistant Secretary is sufficient in the absence of the Secretary.

Quaere whether the state court has jurisdiction of a suit on a transitory cause of action against a foreign corporation arising in another state, based on service of process on an agent voluntarily appointed by such corporation.

A state may by statute require a foreign corporation doing business therein to designate agents upon whom service may be made, or in default of its so doing, to provide upon whom such service may be made in suits relating to business transacted therein, but such statutory requirements cannot extend to causes of action arising in other states.

Service of process, in a suit against a foreign corporation who has not appointed a resident agent, upon the Secretary of State under the Louisiana statute providing for such service is not sufficient to give the court jurisdiction of a suit based on a cause of action arising in another state, and judgment entered thereon by default is absolutely void, and enforcement thereof, other jurisdictional facts existing, can be enjoined by the federal court.

195 F. 56 affirmed.

This appeal raises a question of the power of a United States court to enjoin the appellant, Ephraim Simon, from enforcing a judgment alleged to have been fraudulently obtained by him in a state court in a suit against the Southern Railway. The company had no notice that the suit had been brought, other than that arising from the service, which purported to have been made in pursuance of the Louisiana Act No. 54, which provides (§ 1) that it shall

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be the duty of every foreign corporation doing any business in this state to file a written declaration setting forth the places in the state where it is doing business, and the name of its "agents in this state upon whom process may be served."

Section 2. -- Whenever any such corporation shall do any business of any nature in the state without having complied with the requirements of Sec. 1 of this act, it may be sued for any legal cause of action in any parish of the state where it may do business, and such service of process in such suit may be made upon the secretary of state the same and with the same validity as if such corporation had been personally served.

Availing himself of the provisions of this statute, Ephraim Simon, on December 1, 1904, brought suit, in the Civil District Court for the Parish of Orleans, against the Southern Railway Company, averring that the defendant was a Virginia corporation "doing business in the City of New Orleans." The petition alleged that Simon, a New Orleans merchant and manufacturer, purchased, on February 8, 1904, a ticket from Selma, Alabama, to Meridian, Mississippi, and while riding over its lines, through the negligence of defendant, a collision occurred in which were inflicted upon him great personal injuries and financial loss. The petitioner claimed as damages $5,000 for personal injury; $340 for medical expenses; $4,000 for loss of profit that he would have earned; $3,000 for deterioration in the stock while he was confined to his bed and unable to sell, and $1,000 for increased cost of manufacture due to his absence from business.

There was a prayer that the company be cited to appear and answer, and,

it having failed to comply with the provisions of § 1 of Act No. 54 of the Session of 1904, that service of process in this suit be made upon Hon. John T. Michel, Secretary of State, said service, so made, to be a service upon the said Southern Railway

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Company, as provided for in the act aforesaid.

The plaintiff asked for judgment for $13,348.

The summons was directed to "the Southern Railway Company, through Hon. John T. Michel, Secretary of Louisiana, New Orleans," and required the defendant to answer within ten days after service. The deputy sheriff on December 3, 1904, made return that he had served the citation [35 S.Ct. 256] and petition

on the within named Southern Railway Company in the Parish of East Baton Rouge, State of Louisiana, by personal service on E. J. McGivney, Assistant Secretary of State, Jno. T. Michel, Secretary of State, being absent at the time of service.

The Assistant Secretary of State, acting under the instructions of the Attorney General, filed the citation and petition in his office.

No notice, however, was given to the Southern Railway of the service of the citation or of the fact that suit had been brought. It therefore made no appearance in the suit brought against it by Simon, and, on January 10, 1905, the court, on motion of the plaintiff, ordered that judgment by default be entered against the railway company. Under the Louisiana practice, the case was thereafter submitted to a "trial by jury on confirmation of default." The plaintiff himself testified and other witnesses were examined, and on January 16 the jury returned a verdict in favor of the plaintiff for $13,348, -- being the exact amount claimed in the petition. On January 20 the court, considering "the verdict of the jury in the matter, and that the demand of the plaintiff was proved, the law and the evidence being in favor of said plaintiff," entered judgment on the verdict.

Thereafter the company learned of the existence of the judgment, and averring itself to be a citizen of Virginia, filed (February 6, 1905) in the United States Circuit Court for the District of Louisiana a bill against Simon, a citizen of Louisiana, asking that he be perpetually enjoined from enforcing the same.

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The bill attached, as an exhibit, a copy of the record in the state court, and alleged that, in the collision referred to, Simon had received injuries which a surgeon had reported were slight; that the company had offered him $350 in settlement. Simon refused to accept this sum, but considered and discussed the acceptance of $750, which, however, was not agreed to by the defendant; the matter was temporarily left in abeyance, it being understood that negotiations were still pending and would probably result in an agreement of settlement. It was alleged that thereafter the plaintiff surreptitiously and without the knowledge of the railway company entered suit for $13,348, "falsely and fraudulently pretending that he had been injured in that sum;" that Simon's personal injuries were slight, as shown by the report of the surgeon; that the claim for loss of profit on stock and the extra cost of manufacturing stock were claims that he well knew were fraudulent, fictitious, and utterly untrue; but by false testimony he secured a verdict therefor.

The bill further alleged that the Southern Railway was not doing business in the State of Louisiana; that the service upon the secretary or Assistant Secretary of State was not a citation upon the railway company, and was null and void for the purpose of bringing it under the jurisdiction of the civil district court; that any judgment rendered upon such attempted citation would be, if rendered without appearance of the defendant, a judgment without due process of law and in violation of the Constitution; that the railway company had never received the citation issued in the suit, nor was it advised, nor had it any knowledge, of the pendency of said proceedings until after the rendition of the judgment; that the verdict of the jury having been rendered upon false testimony and without notice, it would be against good conscience to allow the judgment thereon to be enforced against the railway company, which has

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no remedy at law in the premises, and has a complete meritorious defense to the claim on which the judgment is based; that, by fraud and accident, unmixed with its own negligence, the railway company has been prevented from making such defense.

As stated in Ex Parte Simon, 208 U.S. 144, on another branch of this case:

The bill further alleges...

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