Higgins v. California Prune & Apricot Growers, Inc.

• Decision Date: 02 June 1922
• Docket Number: 321.
• Parties: HIGGINS et al. v. CALIFORNIA PRUNE & APRICOT GROWERS, Inc.
• Court: U.S. Court of Appeals — Second Circuit

282 F. 550

HIGGINS et al. v. CALIFORNIA PRUNE & APRICOT GROWERS, Inc.

No. 321.

United States Court of Appeals, Second Circuit.

June 2, 1922

The California Prune & Apricot Growers Inc., is a corporation organized under the laws of the state of California, and is hereinafter referred to as the California corporation. It is engaged in the business of selling California dried fruits. William A. Higgins and Edmund S. Higgins are copartners, and are engaged in business in the city of New York under the firm name of William A Higgins & Co. They are citizens of the state of New York.

Myers &amp Goldsmith, of New York City (Emanuel J. Myers, of New York City, of counsel), for appellants.

Thomas G. Chamberlain, of New York City (Nathan Ballin, of New York City, of counsel), for appellee.

Before ROGERS, MANTON, and MAYER, Circuit Judges.

ROGERS Circuit Judge.

It appears that the California corporation commenced an action in the District Court for the Southern District of New York, in December, 1920, to recover the sum of $208,822.23, alleged to be due for goods sold and delivered to the defendants under certain 'f.o.b.' contracts. This action seems to have been abandoned, and in June, 1921, the corporation began another suit in the same court to recover $198,431.96 damages for goods sold and delivered and for refusal to accept the goods under contracts. The two causes of action differ in certain particulars as to dates of shipment and other minor details, which need not now be considered.

In the latter suit the defendants put in an answer, denying liability and setting up a counterclaim for $100,000 damages. Issue was joined, and the cause placed on the trial calendar. Notice was given by the defendants to take depositions at San Jose, Cal., where the California corporation has its principal place of business, for use on the trial of the action now pending in New York.

It also appears that, while William A. Higgins, one of the defendants, and his counsel, were in California, engaged in taking depositions to be used in the New York action, the California corporation commenced three new suits on the same causes of action in the courts of California, serving process on the said Higgins. One of these actions was commenced on March 9, 1922, in the United States District Court for the Southern District of California. Another was commenced on March 15, 1922, in the United States District Court for the Northern District of California. The other was commenced, likewise, on March 15, 1922, in the superior court of the state of California, in and for the county of Los Angeles. The bringing of three separate suits on the same cause of action in the California courts would seem to be for the evident purpose of annoying and harassing the defendant.

Thereupon the defendants in the law action pending in the District Court for the Southern District of New York filed in that court what they refer to as an ancillary bill of complaint, by which they say it is sought: To aid and enforce the original action, by proceeding with the trial thereof and staying the subsequent actions, as brought in fraud of the court below and in violation of 'the protection' of the court below and of the immunity and privilege from service of process of the defendant Higgins while attending in California as a party defendant in the original action in the District Court in New York. The bill also asked that the contracts sued upon in the original action in the court below and in the California action should be canceled upon the ground of fraud, and that all proceedings should be stayed until that question should be determined. The District Court entered an order dismissing the bill for want of jurisdiction, and from that order or decree this appeal is taken.

On April 1, 1922, Judge Knox, in the District Court for the Southern District of New York, issued a temporary injunction restraining the California corporation, its officers, agents, and attorneys, from taking any further proceedings in the California actions during the pendency of the action in the District Court in New York and until the further order of the court. It was provided that this order should expire in 10 days after its entry, 'unless within the time so fixed the same is extended for a like period for good cause shown,' and it was further provided that service of process might be made upon the attorneys who appeared for the plaintiff in the action at law pending in the court.

On April 4, 1922, Judge Augustus N. Hand, of the District Court in the Southern District of New York, entered an order directing that the subpoena, the bill of complaint, and accompanying affidavits, be served upon the attorneys, naming them, who appeared for the plaintiffs in the action at law pending in the District Court in the Southern District of New York, and that such service, when made, should answer as a substitute for actual service on the party so represented by the said attorneys, naming them, who appeared for the in the cause should thereafter be made upon the said attorneys.

Thereupon the California corporation, the plaintiff in the law action, appeared and obtained an order to show cause why the injunction order should not be set aside because of the lack of jurisdiction in the court to direct service of the order upon the attorneys for the plaintiff. At the time the application for this order was made the court was presented with an affidavit from one of the attorneys who appeared for the plaintiff in the action at law, which stated that these attorneys were not the general counsel for the California corporation in New York state, and had not been in any way designated to receive service of process for it in said state. It also stated:

'That the service of the papers on the motion for an injunction, consisting of a subpoena, an order to show cause, and the various affidavits, constitutes the commencement of an action, and deponent verily avers that such an action cannot be commenced by serving attorneys at law in another action, who are not authorized by any proper designation to receive service of process, and that neither deponent nor any member of his firm have ever been authorized to receive service of a subpoena or papers in the said injunction action.'

Thereafter, and on April 26, 1922, Judge Augustus N. Hand entered an order or decree granting the motion to quash the service which had been made upon the attorneys for the plaintiff in the action at law, vacated the restraining order, denied the application for a preliminary injunction, and dismissed the bill of complaint for want of jurisdiction, and it is from the above order or decree that this appeal has been taken. No opinion was filed in the court below, and we are left to conjecture the ground upon which it proceeded; but we assume it was made upon the theory of counsel, as above stated, that there was no authority to make service upon the defendant in the equity suit by serving the attorneys who appeared for it in the action at law pending in the District Court in New York.

It is fundamental that no judicial proceedings can be had against any person until he has been notified thereof by lawful service of process; and in an action in personam he must be served with process within the territorial jurisdiction of the court from which the process issued. But there are certain classes of cases in which the courts, independently and without express statutory authority, have for more than a century assumed the right to allow service to be made within their jurisdiction upon some person for the absent defendant and have regarded such substituted service as valid.

When an ancillary bill is filed to enjoin an action at law, or where cross-bills are filed which do not introduce new and distinct matters into the original suit, substituted service may be allowed upon the attorney representing the nonresident party in the original suit. In 19 Encyc. of Pl. & Pr. 623, it is laid down that--

'In the federal courts substituted service is allowed in an ancillary proceeding to bring in parties to the principal suit.'

And see Foster's Federal Practice, vol. 1 (5th Ed.) Sec. 165; Street's Federal Equity Practice, vol. 2, Sec. 1066; Whitehouse, Equity Practice, vol. 1, Sec. 173.

In Dunn v. Clarke, 8 Pet. 1, 8 L.Ed. 845, a supplementary or ancillary bill was filed in a Circuit Court of the United States, praying an injunction to a judgment of ejectment obtained in the state court by one Graham. Graham had died after obtaining the judgment, and the defendant Dunn held the land recovered in trust under the will of Graham, and was named as defendant in the injunction suit, but had not been personally served. The Supreme Court declared:

'No doubt is entertained by the court, that jurisdiction of the case may be sustained,' as Dunn is the representative of Graham. It was added that, 'if Graham had lived, the Circuit Court might have issued an injunction to his judgment at law, without a personal service of process, except on his counsel, and, as Dunn is his representative, the court may do the same thing, as against him.'

In Minnesota Co. v. St. Paul Co., 2 Wall. 609, 633, 17 L.Ed. 886 the court, speaking through Justice Miller, declared that the Supreme Court had--

'decided many times that, when a bill is filed in the Circuit Court to enjoin a judgment of that court, it is not to be considered as an original bill, but as a continuation of the proceeding at law, so much so that the court will proceed in the injunction suit without actual service of subpoena on the defendant, and though he be a citizen of another state, if he were a party to the judgment at law.'

In Read v. Consequa, Fed. Cas. No. 11,606, 20 Fed.Cas 350, a bill was filed in 1816, in a...