Bank of Jasper v. First Nat Bank of Rome, Ga First Nat Bank of Jasper, Fla v. State Bank of Rome, Ga Same v. First Nat Bank of Rome, Ga Bank of Jasper v. State Bank of Rome, Ga
| Decision Date | 27 February 1922 |
| Docket Number | 73,Nos. 76,74 and 77,s. 76 |
| Citation | 66 L.Ed. 490,42 S.Ct. 202,258 U.S. 112 |
| Parties | BANK OF JASPER v. FIRST NAT. BANK OF ROME, GA. FIRST NAT. BANK OF JASPER, FLA., v. STATE BANK OF ROME, GA. SAME v. FIRST NAT. BANK OF ROME, GA. BANK OF JASPER v. STATE BANK OF ROME, GA |
| Court | U.S. Supreme Court |
(Nos. 73, 74):
Mr. Wm. Wade Hampton, of Gainesville, Fla., for petitioner.
Mr. Henry C. Clark, of Jacksonville, Fla., for respondents.
(Nos. 76, 77):
Mr. F. P. Fleming, of Jacksonville, Fla., for petitioner.
Messrs. W. E. Kay and Henry C. Clark, both of Jacksonville, Fla., for respondents.
[Argument of Counsel from page 113 intentionally omitted] Mr. Justice BRANDEIS delivered the opinion of the Court.
These cases were argued and submitted together. They involve the same questions of law, and the essential facts are the same in each. Reference will therefore be made only to No. 76.
The First National Bank of Rome, Ga., indorsee of five certificates of deposit made by the Bank of Jasper, a Florida corporation, sued the maker at law in the federal court for the Southern district of that state. The defendant pleaded in bar seven decrees of the circuit court for Hamilton county, Fla., entered in suits in which the Georgia bank had been named as one of the respondents. The plaintiff replied that the suits in which these decrees were entered were in personam; that it was and is a nonresident of Florida, had not been found within the state, and had not appeared in those suits except specially to move to quash the pretended constructive service upon it by publication; and that the decrees are as to it of no legal effect. The District Court sustained the plea of res judicata and entered judgment for defendant. The judgment was reversed by the Circuit Court of Appeals. See First National Bank of Rome, Ga., v. First National Bank of Jasper, Fla., 264 Fed. 83. The case comes here on writ of certiorari. 254 U. S. 622, 41 Sup. Ct. 7, 65 L. Ed. 443. Whether on the facts hereinafter set forth the state court acquired jurisdiction and the legal effect of the decrees are the matters presented for our consideration.
The Rome Insurance Company of Georgia wished to raise capital by selling shares of its stock. To aid it in so doing the American Bank & Trust Company, also of Rome, was appointed agent or trustee. These two companies selected Jasper, Fla., as the field of operations for the stock-selling campaign; and they secured the Bank of Jasper as an ally. Then, to facilitate sales, the three devised the following plan: Purchasers of the stock were enabled to discount at the Jasper bank their one-year notes for an amount equal to the purchase price, giving the stock as collateral; and the American Company, as trustee for the insurance company, agreed to deposit with the Jasper bank an amount equal to each discount, taking that bank's negotiable certificate of deposit in the usual form, payable in one year, with interest at 4 per cent. Thus the stock purchased was paid for; the Jasper bank made discounts and received deposits; the insurance company raised capital and had it paid up—all without anybody parting with a cent in cash. Under this arrangement many citizens of Jasper bought stock in the insurance company. In time their notes, and likewise the corresponding certificates of deposit, matured. The purchasers of the stock discovered that it was worthless, and that they had been defrauded; the Bank of Jasper that it also had been defrauded, and that its certificates of deposit had been transferred to the First National Bank of Rome. There was default on the certificates of deposit; and the First National Bank brought this action against the Bank of Jasper in the federal District Court. But a few days before it did so each purchaser of stock had filed a bill in equity in the state Circuit Court against the Jasper bank and the three Rome corporations. It is the final decrees entered in these suits 18 months later which are pleaded in bar of this action on the certificates of deposit.
Each bill recited, in substance, the above facts and alleged that the note given by the complainant was in the hands of the Jasper bank; that the proceeds (of the discount) were deposited with it; that the certificate of deposit issued to the American Company covers such proceeds; and that they have ever since remained in the bank. The bill prayed that these proceeds be impressed with a trust in favor of the complainant; that the First National Bank of Rome be declared not to have any interest therein; that the certificate of deposit, the note, and the contract to purchase the stock be declared void; that the American Company, the insurance company, and the Jasper bank be restrained from bringing suit against the complainant; that the Jasper bank be restrained from making any payment to the First National Bank out of the proceeds of complainant's note; and that the latter bank be restrained from withdrawing any part of such proceeds.
None of the three Rome corporations was domiciled or found in the state of Florida. Constructive service by publication in a newspaper was made under the Florida law. General Statutes, § 1866. Then the three corporations entered their 'appearance specially, solely and only for the purpose' of moving to quash the service. The motion was overruled. The defendants were given time to plead, but did not do so, and again, appearing 'specially, solely, and only' for that purpose, entered their appeal to the Supreme Court of Florida from the order overruling the motion to quash the pretended service by publication, and, also appearing 'specially, solely, and only' for that purpose, they applied to the Circuit Court for an order fixing the terms of the supersedeas on the appeal. That the notice of this application given counsel for complainant 'shall in no sense operate as a general appearance' was stipulated by them; and thereupon, the order of supersedeas was made and the required bond given. It was suggested in the Supreme Court that the appeal operated as a general appearance, and therefore rendered the question submitted moot; but the court did not pass upon this objection. It declared that 'the purpose of the statute authorizing constructive service by publication [is] to notify residents of the pending suit [in equity] so that they may, if they care to do so, come into the case, and, if the statute be followed, there is no right in the nonresident to quash this...
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