Central Grain & Stock Exch. of Hammond v. Board of Trade of City of Chicago

• Decision Date: 06 October 1903
• Docket Number: 977.
• Parties: CENTRAL GRAIN & STOCK EXCH. OF HAMMOND v. BOARD OF TRADE OF CITY OF CHICAGO.
• Court: U.S. Court of Appeals — Seventh Circuit

125 F. 463

CENTRAL GRAIN & STOCK EXCH. OF HAMMOND v. BOARD OF TRADE OF CITY OF CHICAGO.

No. 977.

United States Court of Appeals, Seventh Circuit.

October 6, 1903

Jacob J. Kern, John A. Brown, and Lloyd Charles Whitman, for appellant.

Henry S. Robbins, for appellee.

On December 23, 1902, the appellee, a corporation of the state of Illinois, filed its bill of complaint for an injunction against the appellant, a corporation of the state of Delaware, of like character with the bill in Illinois Commission Company v. Cleveland Telegraph Company, 119 F. 301, 56 C.C.A. 205, to restrain the receiving, obtaining and distributing of market quotations of the appellee until the right so to do should have been first acquired from the appellee, and subpoena issued returnable the first Monday of February, 1903, with notice of motion for an injunction to be heard on the 29th of December, 1902. The marshal, on December 29, 1902, returned to the subpoena that he had served it by delivering a copy to Charles W. Bickel, secretary of the company, and was unable to find the president or any other officer of the defendant within his district, and had also served copies upon certain named persons designated as 'agents of the said exchange.' On that date also the appellant, defendant below, appeared specially, and upon the affidavit of Bickel that the defendant is a foreign corporation not doing business in the state of Illinois, and was not on the 26th of December, 1902, and that neither the president nor any other officer of the company was there on that day, and is not now there, transacting business for the corporation or representing it within the state of Illinois and that the corporation is not authorized or qualified to do business within the state according to its statutes, and that the defendant corporation had not transacted any business within the state of Illinois, moved the court to quash the service of the subpoena on the ground that the return is untrue in fact and insufficient in law, and because defendant corporation is not doing business within the state of Illinois, was not found within the district nor within the state, and is a nonresident corporation. On December 29, 1902, the motion to quash was referred to a master to take proofs upon the motion and report within 10 days. On January 16, 1903, upon application of the complainant below, and upon certain affidavits showing inability to serve a subpoena to appear before the master upon James F. Southard, alleged to be the president of the defendant, the court entered an order reciting the inability to serve the subpoena, and 'there is reason to believe that said Southard is evading service of subpoena,' that Southard appear, and that said defendant, so far as it is able, cause Southard to appear before the master at a time specified. On January 20, 1903, the Master reported that Southard failed and neglected to appear at the time specified. Thereupon the complainant below moved the court 'to grant an injunction herein, notwithstanding the defendant's motion to set aside service herein, unless said defendant shall cause its president, James F. Southard, to appear at once for examination' before the master. On January 21, 1903, the court ordered that the defendant below produce Southard for examination before the master at a time specified, and, upon failure so to do, a preliminary injunction should issue. On January 28, 1903, the court entered an order reciting, 'It appearing to the court that the defendant herein has not caused its president James F. Southard, to appear as a witness before Master in Chancery Booth and testify in the above-entitled cause, now, on motion of complainant it is ordered that unless otherwise hereafter ordered by this court the said master be directed to defer the matter of his report upon the reference to him of the motion to quash service herein, until said defendant shall cause the appearance of its said president before him as a witness as aforesaid,' and also ordered a temporary injunction restraining the defendant as prayed in the bill of complaint. On February 4, 1903, the defendant below filed its petition, 'saving and reserving to itself, however, the question of the jurisdiction of this court over the defendant, and appearing only for the purpose of objecting to the jurisdiction of the court,' and, conceiving itself to be aggrieved by the order of January 28, 1903, prayed an appeal to the Circuit Court of Appeals, and with that petition filed its assignment of errors: (1) In entertaining jurisdiction of the defendant; (2, 3) in entering the order pending the motion to quash the writ of subpoena; (4) in holding that the defendant had not complied with the order requiring it to cause Southard to appear as a witness; (5) in making the order of January 16, 1903; (6, 7) in holding that, by reason of its failure to comply with the order to produce Southard as a witness, the temporary injunction should issue; (8) that it appeared that before the issuance of the order the defendant had ceased doing business, and was legally dissolved and out of existence; (9) in issuing the temporary injunction; (10) in taking jurisdiction of a nonresident defendant; (11) in directing the master to defer the making of his report upon the motion to quash until the defendant cause Southard to appear; (12) because the defendant had not been served with subpoena within the jurisdiction of the court; (13) because the persons served with subpoena as agents of the company were not at the time its agents within the jurisdiction of the court, engaged in the business of the company. On February 4, 1903, the court allowed the appeal, and on February 5th a bond on appeal was approved by the court and filed in the cause. On February 26, 1903, the defendant below filed a certificate of the Secretary of State of the state of Delaware showing that the corporation, defendant below, was dissolved January 10, 1903, and on that date the court ordered

that the certificate be filed nunc pro tunc as of January 28, 1903, and further ordered that the order of January 21, 1903, be modified to read as follows: 'This cause coming on now to be heard upon the motion of the defendant to correct the order entered herein on January 16, 1903, by striking out of said last-mentioned order so much thereof as required the defendant, so far as it was able, to cause said Southard to appear, and upon the counter motion of the complainant to grant an injunction herein, unless said defendant shall cause its president, James F. Southard, to appear as a witness before Master in Chancery Booth to testify in the matters in issue upon the reference herein to said master by Friday, the 23d day of January, 1903.'

Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.

JENKINS Circuit Judge (after stating the facts as above).

In every case the question with which a federal court is first confronted is that of its jurisdiction, both over the subject-matter and of the party; and this jurisdiction must affirmatively appear upon the record. So far has this doctrine been carried that judgments have been frequently reversed upon appeal because the records did not disclose the essential jurisdictional facts. Railway Company v. Swan, 111 U.S. 379, 4 Sup.Ct. 510, 28 L.Ed. 462; Hancock v. Holbrook, 112 U.S.229, 5 Sup.Ct. 115, 28 L.Ed. 714; Ayers v. Watson, 113 U.S. 594, 598, 5 Sup.Ct. 641, 28 L.Ed. 1093; Insurance Company v. Rhoads, 119 U.S. 237, 7 Sup.Ct. 193, 30 L.Ed. 380; Metcalf v. Watertown, 128 U.S. 586, 9 Sup.Ct. 173, 32 L.Ed. 543; Railroad Company v. Davidson, 157 U.S.201, 15 Sup.Ct. 563, 39 L.Ed. 672. These cases are to the effect that it is absolutely essential that the jurisdictional facts appear by the record; that it is error to proceed unless the jurisdiction of the court be so shown; that the absence of jurisdictional facts cannot be waived; that the failure of the record to disclose such facts should be noticed by the court sua sponte, and may be assigned for error by the party at whose instance the error was committed.

The record here discloses diversity of citizenship, showing jurisdiction if and when the process of the court is duly served or if the defendant should voluntarily appear. The defendant below was a corporation of the state of Delaware. There could be no presumption of its presence within the state of Illinois. There were but two conditions in which the court below could obtain jurisdiction over the corporation: The one by voluntary appearance-- a condition which did not occur; the other, if the corporation prosecuted its business in the state of Illinois, by service of process upon some officer or agent in that state appointed to there transact and manage its business and representing the corporation in such state. Service upon an agent of a foreign corporation is not service upon the corporation unless it be engaged in business in the state where such agent is served and he be appointed to act for it there. St. Clair v. Cox, 106 U.S. 357, 1 Sup.Ct. 354, 27 L.Ed. 222; Cooper Manufacturing Company v. Ferguson, 113 U.S. 727, 735, 5 Sup.Ct. 739, 28 L.Ed. 1137; Fitzgerald & Mallory Construction Company v. Fitzgerald, 137 U.S. 98, 11 Sup.Ct. 36, 34 L.Ed. 608; Goldey v. Morning News, 156 U.S. 518, 15 Sup.Ct. 559, 39 L.Ed. 517; Barrow Steamship Company v. Kane, 170 U.S. 100, 111, 18 Sup.Ct. 526, 42 L.Ed. 964; Mutual Life Ins. Company v. Spratley, 172 U.S. 602, 610, 19 Sup.Ct. 308, 43 L.Ed. 569; Conley v. Mathieson Alkali Works (decided May 18, 1903) 23 Sup.Ct. 728, 47 L.Ed. 1113; N.K. Fairbank & Co. v. Cincinnati Railway Company, 4 C.C.A. 403, 54 F. 420, 38 L.R.A.271.

Immediately upon such service by the marshal the defendant below appearing specially to object to the jurisdiction...