Great Lakes & St. Lawrence Transp. Co. v. Scranton Coal Co.

• Decision Date: 02 January 1917
• Docket Number: 2434.
• Parties: GREAT LAKES & ST. LAWRENCE TRANSP. CO. et al. v. SCRANTON COAL CO.
• Court: U.S. Court of Appeals — Seventh Circuit

239 F. 603

GREAT LAKES & ST. LAWRENCE TRANSP. CO. et al. v. SCRANTON COAL CO.

No. 2434.

United States Court of Appeals, Seventh Circuit.

January 2, 1917

Henry Russell Platt and Charles E. Kremer, both of Chicago, Ill for appellants.

John B Richards, of Buffalo, N.Y., for appellee.

Before KOHLSAAT, MACK, and EVANS, Circuit Judges.

MACK Circuit Judge.

This is an appeal from an order granting a temporary injunction restraining the sale of nine certain boats or the sending of them from the Great Lakes or the St. Lawrence river beyond Montreal. Plaintiff's rights were based upon a contract between it and the defendant Transportation Company, dated January 17, 1916, the threatened sale of the boats for use in European waters, and the resulting irreparable damage because of plaintiff's contractual obligation to ship coal and the impossibility of obtaining suitable vessels therefor. Plaintiff is alleged to be a citizen of Pennsylvania, and the defendant corporation, a citizen of Virginia; the individual defendants, its directors, citizens of Illinois.

The contract provided in substance that plaintiff employ the nine named steamers--

'for transportation of its coal from the port of Oswego, N.Y., to their full capacity on all west-bound trips, for the season of navigation on the Great Lakes of the years 1916, 1917 1918, at the rate of freight of seventy cents (70c.) per net ton to Lake Michigan, and sixty cents per net ton to Lake Superior, free in and out, and shall load and unload their respective cargoes from time to time so as to give the said vessels reasonable and ordinary dispatch, substantially the same as heretofore, unless prevented by strikes, disasters or other matters beyond its control hereinafter more fully specified.' Defendant corporation agreed:

'To carry the said coal on all trips west-bound of its said steamers, or any of them, at the said rates of freight for the seasons of navigation aforesaid.'

The contract further provided:

'That if at any time the operations or business of the party of the first part at the mines or on the roads by which coal is to be transported to the place of shipment aforesaid, are interrupted by floods, breaks, accidents, combinations, or by turnouts or strikes, or by casualties of any kind, the obligations of the said party of the first part to furnish cargo or cargoes under this contract for the period of such interruption may be suspended for and during the period of such interruption and interruptions from time to time, by notice in writing to the party of the second part, without liability for damages by reason of failure to furnish cargoes and make shipments during such period or periods of suspension; * * * that if at any time the operations or business of the party of the second part or any of its respective steamers, are interrupted by breaks, accidents, combinations, perils of navigation, or by turnouts, strikes, or by casualties of any kind, the obligations of the party of the second part and its respective ships to carry under this agreement shall be suspended during the period or periods of operation of such causes from time to time, by notice in writing to the party of the first part, without liability for damages by reason of failure to carry cargoes during such period or periods of suspension; * * * that in case of actual or constructive total loss of any of the vessels aforesaid, this contract shall be abated and canceled to the extent of the capacity of such vessel or vessels without liability for damages and without claim or compensation whatsoever by the party of the first part on account of the same.'

1. Both the original and the amended bill allege the facts as to citizenship and residence; while the diversity of citizenship essential to federal jurisdiction existed, there was neither such residence in the Northern district of Illinois, nor allegation thereof, as, under section 51 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1101 (Comp. St. 1913, Sec. 1033)), would have permitted the court, against defendant's objection, to exercise its jurisdiction. This right to object, however, is a privilege which defendant may waive. A general appearance is such a waiver. Eldorado Coal and Mining Co. v. Mariotti, 215 F. 51, 131 C.C.A. 359, and cases cited.

While it is true that the time given under the rules for pleading enables a defendant carefully to examine the bill and fully to consider whether or not he shall waive this privilege, it does not follow that he may not be called upon for a decision at some earlier period; concededly, he may voluntarily waive the time period and enter a general appearance. And if, as in the instant case, the exigencies of the proceedings require prompt action by the parties and by the court long before the day for pleading, the defendant, in our judgment, is not absolved from forthwith either asserting his personal privilege or waiving it.

Though this may at times result in the loss to a defendant of a statutory privilege, through inadvertence and without real negligence, we deem it but the logical application of the salutary principle underlying the rule requiring, as his first step in the litigation, a special appearance for this specific purpose in order to preserve the right, namely, that a party shall not attempt to win out on the merits and, if unsuccessful or subsequently unwilling to risk a decision in that court, then be able to avert the consequences, for causes not absolutely fatal to the court's jurisdiction. And it is therefore immaterial that the objection is urged, as in this case, before the court has expressed its views, but after a full hearing on the motion for a preliminary injunction.

New equity rule 29 (198 F. xxvi, 115 C.C.A. xxvi) in permitting defenses in point of law arising upon the face of the bill to be made in the answer, and in providing that defenses theretofore presentable by plea in bar or abatement shall be made in the answer, does not, in our judgment, change the law in this respect. It aims at simplifying the pleadings, not at abolishing the requirement of a special appearance at the outset, if the personal privilege is intended to be asserted. It is unnecessary in this case to determine whether or not the rule has changed the former practice (Lehigh Valley Coal C. v. Yensavage, 218 F. 547, 134 C.C.A. 275), so as to permit the objection to the jurisdiction to be coupled with an alternative defense on the merits, if it clearly appear that the personal privilege is not thereby intended to be waived. For if this right be granted by rule 29, it was not here exercised; no attempt was made to raise the question of privilege until after the privilege itself had been waived by opposition on the merits to the granting of a temporary injunction.

That the original bill failed to allege in express terms that the amount in controversy exceeded $3,000, for which reason it was amended after the hearing, does not enlarge the defendant's rights. The amendment was purely formal; it is apparent from the other allegations of the original bill that much more than the jurisdictional amount was involved. Moreover, if the objection had been well founded, it would not have gone to the jurisdiction of the court in the true sense of the word.

Furthermore, this objection has no connection whatever with the personal privilege or the waiver thereof. While a defendant who is actually deceived by false jurisdictional or residential allegations in the bill does not lose his right or privilege to object to further proceedings when the true facts appear (Lehigh Valley Coal Co. v. Washko, 231 F. 42, 145 C.C.A. 230), one who is not so misled should not and does not regain a waived privilege, merely because the amendment of the bill on other points gives him the right of pleading anew to the merits of the cause.

2. We come, then, to the interpretation of...