Consolidated Iron & Steel Co. v. Maumee Iron & Steel Co.

• Decision Date: 26 October 1922
• Docket Number: 5859.
• Citation: 284 F. 550
• Parties: CONSOLIDATED IRON & STEEL CO. v. MAUMEE IRON & STEEL CO.
• Court: U.S. Court of Appeals — Eighth Circuit

284 F. 550

CONSOLIDATED IRON & STEEL CO. v. MAUMEE IRON & STEEL CO.

No. 5859.

United States Court of Appeals, Eighth Circuit.

October 26, 1922

Carl H Gilbert, of Santa Fe, N.M. (A.B. Renehan, of Santa Fe, N.M and W. A. Gillenwater, of Clovis, N.M., on the brief), for plaintiff in error.

Harold C. Perry, of Santa Fe, N.M. (Francis C. Wilson, of Santa Fe N.M., and Ritter & Hutchens, of Toledo, Ohio, on the brief) for defendant in error.

Before LEWIS and KENYON, Circuit Judges, and YOUMANS, District Judge.

LEWIS Circuit Judge.

In April, 1919, a court of Common Pleas of the State of Ohio rendered on default a personal judgment against appellant, a New Mexico corporation, and in favor of appellee, an Ohio corporation. From the judgment roll it appears that the recovery was for money advanced to appellant by the Yesbera Manufacturing Company of Ohio, account for which was assigned to appellee, showing a large number of sums advanced between May 8, 1911, and September 15, 1913. The service of summons was this: 'State of Ohio, Lucas County-- ss.

'Received this writ Jan. 15, 1919, and pursuant to its command, I summoned on the 17th day of January, 1919, the within named defendant, the Consolidated Iron and Steel Company by delivering to George Yesbera, President of said Company, a true and certified copy of this writ with endorsements thereon.

John F. Mathias, Sheriff, 'By C. D. Whitaker, Deputy.'

The appellee brought this action on that judgment, and appellant, first by demurrer and then by plea and answer, unsuccessfully challenged the validity of the judgment of the Ohio court on the ground that there was no jurisdiction over the person of appellant in that proceeding, hence that judgment, it contended, was void, and this action bottomed upon it could not be maintained. The attack on the ground stated was available and constituted a complete defense, if sustained. Thompson v. Whitman, 18 Wall. 457, 21 L.Ed. 897; Fauntleroy v. Lum, 210 U.S. 230, 28 Sup.Ct. 641, 52 L.Ed. 1039; Bigelow v. Old Dominion Co., 225 U.S. 111, 32 Sup.Ct. 641, 56 L.Ed. 1009, Ann. Cas. 1913E, 875; Toledo Ry. & L. Co. v. Hill, 244 U.S. 49, 37 Sup.Ct. 591, 61 L.Ed. 982; Cooper v. Brazelton, 135 F. 476, 68 C.C.A. 188.

The contention of appellant is two-fold, first, that it was not constructively within the State of Ohio when service of summons was made,-- not doing business there, therefore there was no process or method of procedure by which the Ohio court could bring appellant within and subject to its jurisdiction and power, and secondly, conceding its constructive presence, the service of summons was not good for two reasons, 1, the service was not on the corporation's representative named in the State statute for that purpose, and, 2, the officer served was interested in obtaining the judgment in the State court and would indirectly share in the proceeds should it be collected. The facts on which the contention must be determined are these:

Frank Yesbera, a resident of Toledo, Ohio, became interested in appellant and its mining operations in New Mexico in 1906, and at once began to advance money to it, and continued to do so until his death in January, 1917, for which he was to have an interest in stock. He was made president and continued to be such until his death. He also made a contract with appellant in 1906 to sell for it as its agent a large amount of its mortgage bonds, for a commission. Nothing came of that, except he sold one bond in Boston. He opened an office in Toledo and had the company's name put on the door. Three meetings of the board of directors were held at that office in 1906 and 1907. He opened an account for the company in a bank at Toledo, on which a few checks were drawn during 1907 to 1910. The account was closed long before his death. He carried on some correspondence for the company. On his death his brother George Yesbera was elected president in his stead, and appointed administrator of Frank's estate, and he and the heirs of Frank, all of Toledo, for a short while advanced sufficient amounts to keep the assessment work going on the company's unpatented mining claims in New Mexico. It was organized to mine, reduce and dispose of all kinds of mineral deposits. All of its mineral lands were in New Mexico, and its business was to work and develop them as funds might be obtained. It did not apply for the right to carry on business in Ohio, as the statute of that State provided it might do. It had no property there, except a few pieces of office furniture. Neither did it appoint anyone as its managing agent in that State. In August, 1917, the administrator and heirs made a contract with one Collin by which they gave him an option to acquire the interests of Frank's estate and their interests, represented by the advancements they had made. George Yesbera testified that after that option was given he had nothing more to do with the company, that from the time of his appointment as administrator in the early part of 1917 he only gave attention to the interests of the estate in the company, that the company's office was moved from where it had been to another part of the city into a room occupied by others before Frank's death, that he only had a desk there and that he did not take charge of the affairs of the company but of the affairs of his brother Frank with the company, that the company had no funds in Toledo and no bank account there, and no business except with Frank's estate and heirs, and that the money which he and the other heirs sent to New Mexico was just made up between them. He had nothing to do with the company after the arrangement with Collin. Collin then advanced some money. Under the option contract with Collin the latter was to organize a new company to take over all interests of the Yesbera estate and heirs in appellant company. They were to have stock in the new company for their interests in appellant company. George Yesbera in the option contract with Collin bound himself to file and maintain suits in court for the purpose of enforcing any of the claims in favor of his brother's estate or the heirs, on written request of Collin. Pursuant to that agreement Collin organized appellee company, all interests of the Yesbera estate and heirs were assigned to it, and it obtained the judgment here sued on.

1. We do not believe that the voluntary unsolicited transmission of funds from one State to a foreign corporation in another State has any tendency to prove that the foreign corporation was doing business in the State from which the funds were sent. That aside, there is little left from which it...