General Inv. Co. v. Lake Shore & M.S. Ry. Co.

• Citation: 250 F. 160
• Decision Date: 16 February 1918
• Docket Number: 2939.
• Parties: GENERAL INV. CO. v. LAKE SHORE & M.S. RY. CO. et al.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

250 F. 160

GENERAL INV. CO. v. LAKE SHORE & M.S. RY. CO. et al.

No. 2939.

United States Court of Appeals, Sixth Circuit.

February 16, 1918

[Copyrighted Material Omitted]

F. A Henry, of Cleveland, Ohio, for appellant.

Doyle Lewis, Lewis & Emery, of Toledo, Ohio (C. T. Lewis, of Toledo, Ohio, Walter C. Noyes, of New York City, and Samuel H. West, of Cleveland, Ohio, of counsel), for appellees.

Before WARRINGTON and KNAPPEN, Circuit Judges, and SANFORD, District judge.

SANFORD District Judge.

This suit was commenced by a petition in equity filed in the Court of Common Pleas of Cuyahoga County, Ohio, by the Central Investment Company, a Maine corporation, against The Lake Shore & Michigan Southern Railway Company, a corporation of New York, Pennsylvania, Ohio, Michigan, Indiana and Illinois (hereinafter called the Lake Shore Company), The New York Central & Hudson River Railroad Company, a New York corporation (hereinafter called the New York Central Company), the Central Trust Company of New York, and three individual defendants, Read, Evans and Wood, for the primary purpose of enjoining the consolidation of the Lake Shore and New York Central Companies, with others, into a single corporation. Summons was issued for the Lake Shore and New York Central Companies and returned as served upon each. No process was issued for the Trust Company or individual defendants; and they have never appeared herein. Before the return day the New York Central Company appeared specially and moved that the sheriff's return upon it be set aside. This motion was overruled; as was the plaintiff's motion for a temporary injunction.

Thereafter, the Lake Shore and New York Central Companies, with The New York Central Railroad Company (purporting to be the consolidated railroad corporation created meanwhile under the laws of New York, Pennsylvania, Ohio, Michigan, Indiana and Illinois), appeared specially and filed their petition for the removal of the cause to the United States District Court below. This removal was ordered by the Common Pleas Court.

After such removal, the New York Central Company, appearing specially in the District Court, moved to set aside the return of the the summons against it and quash the service. The Lake Shore Company also moved to dismiss the plaintiff's petition. After a hearing on the motion of the New York Central Company it was adjudged that the service and summons against it be set aside, and that it go hence, with costs. Subsequently the plaintiff moved for leave to file a supplemental bill making new parties defendant; also for 'substituted process' upon the New York Central Company and others. More than two months thereafter the plaintiff moved that the cause be remanded to the state court. This motion was denied. Subsequently a decree was entered denying the plaintiff's motion for substituted service, and leave to file a supplemental bill; granting the Lake Shore Company's motion to dismiss; and dismissing the suit at the plaintiff's costs; from which final decree the plaintiff has appealed.

1. Motion to remand. The petition for removal, which alleged diversity of citizenship between the plaintiff and all defendants and the requisite jurisdictional amount, was primarily based on a separable controversy with the removing defendants arising under the laws of the United States. The plaintiff, while not denying the general grounds of Federal jurisdiction, insists that the suit was improperly removed to the District Court because of want of local jurisdiction in such court due to the fact that the New York Central Company was not an inhabitant of the district.

It is unnecessary to determine whether, under the rule of Ex parte Wisner, 203 U.S. 449, 27 Sup.Ct. 150, 51 L.Ed. 264, In re Moore, 209 U.S. 491, 28 Sup.Ct. 585, 52 L.Ed. 904, 14 Ann.Cas. 1164, Louisville Railroad v. Fisher (6th Cir.) 155 F. 68, 83 C.C.A. 584, 11 L.R.A. (N.S.) 926, Turk v. Illinois Central Railroad (6th Cir.) 218 F. 315, 134 C.C.A. 111, and other similar cases, there was, in the first instance, a want of local jurisdiction in the court below. If general Federal jurisdiction exists, the want of local jurisdiction or venue in the particular Federal court to which a cause has been removed, is waived, where the plaintiff, after the removal, without challenging such jurisdiction by motion to remand or otherwise, consents to and accepts such jurisdiction by affirmative acts in recognition thereof and submission thereto. In re Moore, 209 U.S. supra, at page 496, 28 Sup.Ct. 585, 52 L.Ed. 904, 14 Ann.Cas. 1164; Western Loan Co. v. Mining Co., 210 U.S. 368, 371, 28 Sup.Ct. 720, 52 L.Ed. 110; Kreigh v. Westinghouse, 214 U.S. 249, 253, 29 Sup.Ct. 619, 53 L.Ed. 984, Louisville Railroad v. Fisher (6th Cir.) 155 F. supra, at page 69, 83 C.C.A. 584, 11 L.R.A. (N.S.) 926; Garrett v. Louisville Railroad (6th Cir.) 197 F. 715, 117 C.C.A. 109. Such objection to the want of venue must be raised at the first opportunity calling for election between insisting on the objection or taking inconsistent action. Erie Railroad v. Kennedy (6th Cir.) 191 F. 332, 334, 112 C.C.A. 76.

In the instant case, the plaintiff, after the removal, without anywise challenging the jurisdiction of the District Court, entered into an agreement as to using therein certain testimony relating to the validity of the service upon the New York Central Company; participated in the hearing therein on the motion to set aside such service; and subsequently, more than a month after such service had been set aside and while the Lake Shore Company's motion to dismiss was pending, filed therein its motion for leave to file a supplemental bill, and two motions for 'substituted process' upon the New York Central Company and others, under section 57 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1102 (Comp. St. 1916, Sec. 1039)). These several acts on its part were clear and unequivocal recognitions of the jurisdiction of the District Court, indicating its willingness that the matters in controversy should be tried by that court; its motions for leave to file a supplemental petition and for 'substituted process' not merely tacitly consenting to accept its jurisdiction, but affirmatively appealing to its aid and invoking the exercise of such jurisdiction. In re Moore, 209 U.S. supra, at page 496, 28 Sup.Ct. 585, 706, 52 L.Ed. 904, 14 Ann.Cas. 1164; Clark v. Southern Pacific Company (C.C.) 175 F. 122, 127. Such consent to the jurisdiction of the District Court and waiver of objection to its want of venue, if any originally existed, could not thereafter be revoked; and the motion to remand, filed more than two months thereafter, was hence properly denied. In re Moore, 209 U.S. supra, 490, 28 Sup.Ct. 585, 706, 52 L.Ed. 904, 14 Ann.Cas. 1164; Clark v. Southern Pacific Co. (C.C.) 175 F. 122, supra.

2. Service on the New York Central Company. The sheriff of Cuyahoga County made return that he had served the summons on the New York Central Company upon 'W. A. Barr, Regular Ticket Agent, in charge of the business of said company, the president or other officer not found in my county. ' The motion of the New York Central Company to set aside this service, was based primarily upon the grounds that it had never done business in Ohio or become subject to service of process therein, and that Barr was not its agent or in charge of its business.

A foreign corporation is not amenable to personal process in a court of another state unless it is doing business in such state and such process is served upon an authorized officer or agent. Peterson v. Chicago Railway, 205 U.S. 364, 390, 394, 27 Sup.Ct. 513, 51 L.Ed. 841; Mechanical Appliance Co. v. Castleman, 215 U.S. 437, 441, 30 Sup.Ct. 125, 54 L.Ed. 272; Herndon-Carter Co. v. Norris, 224 U.S. 496, 499, 32 Sup.Ct. 550, 56 L.Ed. 857; Philadelphia Railway v. McKibbin, 243 U.S. 264, 265, 37 Sup.Ct. 280, 61 L.Ed. 710; and cases therein cited. To render it so amenable there must be an actual doing of business within the state of such character and extent as to warrant the inference that it has subjected itself to the jurisdiction and laws of such state and is there present subject to the process of its courts. St. Louis Railway v. Alexander, 227 U.S. 218, 226, 227, 33 Sup.Ct. 245, 57 L.Ed. 486, Ann. Cas. 1915B, 77; International Harvester Co. v. Kentucky, 234 U.S. 579, 583, 586, 34 Sup.Ct. 944, 58 L.Ed. 1479; Washington-Virginia Railway v. Real Estate Trust, 238 U.S. 185, 186, 35 Sup.Ct. 818, 59 L.Ed. 1262; Philadelphia Railway v. McKibbin, 243 U.S.supra, at page 266, 37 Sup.Ct. 280, 61 L.Ed. 710. The validity of the service of process in a state court may, furthermore, be questioned after removal to a Federal court; the sheriff's return no being conclusive and the question of jurisdiction being one for the ultimate determination of the Federal court. Mechanical Appliance Co. v. Castleman, 215 U.S. supra, at 441, 442, 443, 30 Sup.Ct. 125, 54 L.Ed. 272, and cases therein cited.

The testimony established the following material facts: The New York Central Company was a New York corporation. It had no line of railroad in Ohio and maintained no office or place of business therein. Both it and the Lake Shore Company were members of a group or system, comprising several railroad companies included under the general designation of the 'New York Central Lines.' Each of these several companies commonly marked its rolling stock and equipment with its own initials and the words 'New York Central Lines'; issued its tickets on paper water marked with these words; printed them on its time-tables; and generally used them as a trade mark on available matter. The same person was President of the New York Central and Lake Shore Companies. The New York Central Company's...