Fitzgerald Mallory Const Co v. Fitzgerald

Citation34 L.Ed. 608,11 S.Ct. 36,137 U.S. 98
Decision Date17 November 1890
CourtUnited States Supreme Court

This was an action brought by John Fitzgerald, a citizen of Nebraska, in the district court of Lancaster county, in that state, against the Fitzgerald & Mallory Construction Company, a corporation created under the laws of Iowa. The petition was filed December 22, 1888, and summons issued, which was served on the 24th of December, by the delivery of a copy to S. H. Mallory, described in the return as 'the president and managing agent' of the defendant company. Under title 4 of the Code of Civil Procedure of Nebraska section 59 provides: 'An action other than one of those mentioned in the first three sections of this title, against a nonresident of this state or a foreign corporation, may be brought in any county in which there may be property of or debts owing to said defendant, or where said defendant may be found.' Comp. St. Neb. 1889, p. 860. Under title 8, § 198, it is provided that 'the plaintiff in a civil action for the recovery of money may, at or after the commencement thereof, have an attachment against the property of the defendant, and upon the grounds herein stated First, when the defendant, or one of several defendants, is a foreign corporation, or a non-resident of this state.' Under section 199: 'An order of attachment shall be made by the clerk of the court in which the action is brought, in any case mentioned in the preceding section, when there is filed in his office an affidavit of the plaintiff, his agent or attorney, showing—First, the nature of the plaintiff's claim; second, that it is just; third, the amount which the affiant believes the plaintiff ought to recover; fourth, the existence of some one of the grounds for attachment enumerated in the preciding section.' Then follow various sections relating to proceedings in attachment and garnishment. Comp. St. Neb. p. 877. In this case affidavit for attachment against defendant as a foreign corporation was made, order of attachment and garnishee summons issued, and the latter served upon the Missouri & Pacific Railroad Company, as owing debts to the defendant. The garnishee subsequently answered that it was impossible to make a definite answer as to whether, on an accounting between it and the defendant, there would be due to the defendant any sum or sums of money whatsoever; and that litigation was pending in respect to a contract between it and the defendant for the purchase of certain securities, which it claimed might result, upon a proper accounting, in no indebtedness on its part to the defendant, and until the termination of which it could not answer more specifically.

The petition counted upon 14 causes of action: (1) Upon a note for $5,002.80, dated July 31, 1888, payable 90 days after date, to the order of the First National Bank of Lincoln, Neb., with interest at the rate of 10 per cent. per annum until paid, signed by S. H. Mallory, its president, and indorsed by plaintiff and Mallory. Plaintiff alleged that, the note not being paid at maturity, he, who had indorsed it 'without any consideration,' paid it with interest, and it was thereupon transferred to him by the cashier of the bank: and that the sum of $5,128.25, paid by him with interest from the 1st day of November, 1888, was now due. (2) Upon a note for $15,290.24, dated July 25, 1888, payable 60 days after date to the order of J. J. P. Odell, cashier, with interest at 7 per cent., signed by the defendant corporation by Mallory, its president, indorsed by plaintiff and Mallory, and taken up by Fitzgerald, who had indorsed it without consideration, and paid it with interest, the full sum paid being $15,468.62, which was due with interest from September 25, 1888. (3) For services from May 1, 1885, to May 1, 1886, in doing work with the view of organizing the defendant, which had received all the benefits of the same, and agreed to pay therefor, and which services were alleged to be worth $5,000. Also for services from the 1st day of May, 1886, to the 4th of November, 1886, as superintendent, treasurer, or manager of defendant, placing their value at the sum of $6,000. (4) For services as general manager from November 1, 1886, to November 1, 1887, at the agreed salary of $5,000. (5) For same from November 1, 1887, to May 1, 1888, $2,500. (6) For scrapers and plows sold and delivered to defendant at its request, $1,515. (7) For track-laying tram. sold and delivered to defendant at its request, $1,500. (8) For money paid for personal expenses incurred at defendant's request during the year 1886, $396.65. (9) For same for year 1887, $227.50. (10) For balance of $1,928, due on a draft for $5,500, signed by defendant by C. H. Lamb, auditor, to order of S. H. Mallory, and accepted by him as president, plaintiff having taken up said draft, and $1,928 being due, with interest from July 30, 1888. (11) Upon note for $5,000, signed by defendant by C. H. Lamb, auditor, to order of First National Bank of Chariton, and indorsed to plaintiff for value, and due with interest from November 22, 1888. (12) Upon note for $856.64 dated January 16, 1888, signed by defendant by Mallory, its president, to order of M. S. Cartter & Co., and indorsed to plaintiff, and due, with interest from date. (13) Upon note for $917.91, dated November 23, 1888, signed by defendant by Lamb, auditor, to order of First National Bank of Chariton, and indorsed to plaintiff, with interest from date. (14) For money paid since January 1, 1888, upon request of defendant, for legal services and advice, and otherwise, for defendant's benefit, $5,000. Plaintiff prayed judgment for the sum of $51,271.85, with interest on the varirous sums and from the various dates as demanded.

On the 4th of January, 1889, the defendant filed its demurrer to the petition, upon the grounds of insufficiency, misjoinder, and defect of parties, and on the 16th of January its petition to remove the cause into the circuit court of the United States for the district of Nebraska, the petition being verified by the affidavit of 'the duly-authorized attorney of the defendant.' The cause having been removed, the defendant applied for leave to answer by a day named, and afterwards obtained leave to amend. The amended answer was filed June 19th, and denied the authority of Mallory to make the notes described in the first and second counts; the contract and services set up in the third count, (also pleading payment;) admitted that plaintiff was employed by defendant under a salary of $5,000 for part of the time referred to in the fourth count; admitted liability for salary named in the fifth count, but alleged that plaintiff failed to render the services, to defendant's damage; denied that plaintiff sold and delivered the property declared on in the sixth and seventh counts; that Lamb, auditor, had authority to make the draft set up in the tenth count, alleging that its proceeds were divided between plaintiff and Mallory; that Lamb, auditor, had authority to make the note set up in the eleventh count, alleging that defendant received no benefit therefrom, and that Mallory caused the note to be transferred to plaintiff solely for the purpose of bringing suit thereon; denied that Mallory had any authority to make any of the instruments in writing sued on, and alleged that plaintiff had full knowledge of such want of authority; and denied the liability on the fourteenth count. The two closing paragraphs are each numbered 11, the last asserting 'that the district court of Laucaster county, state of Nebraska, never had or acquired any jurisdiction of this defendant, and this court has no jurisdiction to hear, try, and determine the matters and things in controversy herein.' It appears from the record that on the 22d of June the parties were given leave to amend the pleadings to conform to the facts, and it is stated by counsel that this paragraph was then written in on the amended answer.

On the 11th of May the cause was set down for trial, by agreement of parties, and came on for trial the 20th of June, 1889, upon the issues joined, and a jury having been impaneled, the trial continued during the 20th, 21st, 22d, and 24th days of June, when it was given to the jury, the court instructing them, among other things, to disregard the first branch of the third count and the fourteenth count. The jury returned a verdict on the 25th of June, finding the issues for the plaintiff, and assessing the amount of his recovery 'at $47,937.97 debt, and $3,474.65 interest thereon at 7 per cent. from 25th day of June, 1889, being the sum total of $51,412.62.'

Motions in arrest and for new trial were made and overruled, and judgment rendered on the verdict. Pending the trial, on the 22d day of June, a plea to the jurisdiction of the court was filed, setting up that service of the summons in the action was obtained by means of a trick and fraudulent device, whereby the president of the defendant, Mallory, was induced to go from Iowa to the state of Nebraska, where, upon his arrival, he was served with process, which fraud was unknown to defendant when it filed its demurrer to the plaintiff's petition, its petition for removal, and its answer and amended answer, and that Mallory, after the service, acting in concert with the plaintiff, concealed the facts from the defendant; and praying that, therefore, proceedings be stayed, and the action dismissed. This plea was overruled by the court, and the defendant then filed a motion for a nonsuit, upon the ground that the defendant was improperly sued in Lancaster county, Neb., and the district court of that county had no authority to take jurisdiction of the action or of the defendant, and that neither that court nor the United States court had jurisdiction of the defendant, which motion was overruled. The plea to the jurisdiction, and evidence bearing thereon, and the motion to dismiss, with an affidavit which...

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