Fry v. Denver & R.G.R. Co.

• Citation: 226 F. 893
• Decision Date: 11 October 1915
• Docket Number: 15,879.
• Court: U.S. District Court — Northern District of California
• Parties: FRY v. DENVER & R.G.R. CO.

226 F. 893

FRY v. DENVER & R.G.R. CO.

No. 15,879.

United States District Court, N.D. California.

October 11, 1915

Sullivan & Sullivan and Theo. J. Roche, of San Francisco, Cal., for plaintiff.

Charles W. Slack, of San Francisco, Cal., for defendant.

VAN FLEET, District Judge.

The action was commenced in a state court against the defendant sued as a Colorado corporation, to recover damages for personal injuries alleged to have been suffered by plaintiff at Pueblo, Colo., while a passenger on defendant's railroad, through the defendant's negligence; it being alleged as a basis of maintaining the action in this state that, at the date of the injury, the defendant was and now is 'doing business' therein. The defendant removed the cause to this court for diversity of citizenship, and has now interposed a demurrer challenging the jurisdiction of the court; the objection being that the complaint does not state facts constituting a cause of action as to which the defendant is required to answer in the courts of this state.

The objection gives rise to the question whether an action although transitory in character, may, against the objection of the defendant be maintained in the courts of a state other than that in which the cause of action arose or the defendant resides against a corporation nonresident of the state where sued notwithstanding it may be doing business therein, unless it appear that the cause of action counted upon arises out of the business there done; the contention of the defendant being that, unless it appear that the action arises out of a transaction had in the state wherein suit is brought, the complaint fails to disclose a cause of action wherein the court is clothed with jurisdiction of the person of the defendant. It will be observed that not only is there here a failure to allege that the cause of action was in respect of the business done by the defendant in this state; but it sufficiently appears, perhaps, that it could not have so arisen, since the cause of action sounding in tort would necessarily have its origin in the state wherein the tortious act was committed. In support of its objection, defendant relies on the case of Old Wayne Life Ass'n v. McDonough, 204 U.S. 8, 27 Sup.Ct. 236, 51 L.Ed. 345; and the more recent case of Simon v. Southern Ry. Co., 236 U.S. 115, 35 Sup.Ct. 255, 59 L.Ed. 492 (decided January 25, 1915).

Both cases present instances like the present of attempts to secure jurisdiction of a nonresident corporation on a cause of action arising in a state other than that in which the action was brought, by service of process under state statutes similar to that of this state providing for service upon nonresident corporations doing business in the state. In both cases, judgment was obtained by default, but in each instance, when eventually coming for review to the Supreme Court of the United States, the judgment was held nugatory and void upon the ground, in substance, that, while every state has, within certain limitations, the right to provide for service of process upon foreign corporations doing business therein, and may prescribe, in default of the naming by the corporation of an agent on whom service may be made, that the same shall be had on some officer of the state, this power is limited to instances where the action is based upon transactions had or business done within the jurisdiction of the state wherein the service is had. 'Otherwise,' as put in the Simon Case, 'claims on contracts, wherever made, and suits for torts, wherever committed, might, by virtue of such compulsory statute, be drawn to the jurisdiction of any state in which the foreign corporation might at any time be carrying on business. ' And it is held that such process in an action based upon a transaction not arising within the state is ineffectual to confer jurisdiction of the person of the defendant or constitute that due process of law essential as the foundation of every valid judgment.

It is true, as suggested by plaintiff, that the court in those cases was considering primarily the sufficiency of the process to subject the defendant to the local jurisdiction; but the reasoning upon which the court proceeds indicates clearly, I think, that jurisdiction of the person of the defendant should be made to appear by proper averment. In the Old Wayne Case, it is said:

'Conceding, then, that by going into Pennsylvania, without first complying with its statute, the defendant association may be held to have assented to the service upon the insurance commissioner of process in a suit brought against it there in respect of business transacted by it in that commonwealth, such assent cannot properly be implied where it affirmatively appears, as it does here, that the business was not transacted in Pennsylvania. *

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