Hurley v. Wells-Newton Nat. Corporation

• Decision Date: 01 April 1931
• Docket Number: No. 3465.,3465.
• Citation: 49 F.2d 914
• Court: U.S. District Court — District of Connecticut
• Parties: HURLEY v. WELLS-NEWTON NAT. CORPORATION.

49 F.2d 914 (1931)

HURLEY v. WELLS-NEWTON NAT. CORPORATION.

No. 3465.

District Court, D. Connecticut.

April 1, 1931.

Tuttle & Day and William A. Bree, all of New Haven, Conn., for plaintiff.

Paxton Blair, of New York City, and James E. Wheeler, of New Haven, Conn., for defendant.

HINCKS, District Judge.

This is an action brought originally to the superior court for Fairfield county, state of Connecticut.

The original writ recites that the plaintiff, Hurley, is a resident of New York, and that the defendant corporation is a Delaware corporation, "located and having a principal place of business in the City, County and State of New York." The complaint itself alleges facts purporting to show a breach of a contract on the part of the defendant, and then alleges that the defendant is the owner of certain shares of stock in the William P. Kirk Company, Inc., a Connecticut corporation, and further facts supporting the plaintiff's claim for an attachment of the stock owned in said Connecticut corporation by the defendant, by means of an injunction restraining the defendant from a transfer of said stock. The complaint was accompanied by an application for a temporary injunction against said transfer. And it appears also from the record that an order for such injunction was issued by the state court. To the foregoing papers was attached a citation from the state court, commanding that "notice of the pendency of this complaint and of the foregoing order of injunction" be given the defendant by leaving a true and attested copy of the papers with "William P. Kirk as Vice-President and Treasurer of Wells-Newton National Corporation, or at his usual place of abode in the Town of Bridgeport, County of Fairfield, and State of Connecticut." The sheriff's return recites that he "left with and in the hands of William P. Kirk, as he is Treasurer of the Wells-Newton National Corporation, the within named defendant, a true and attested copy" of the various papers with his doings thereon indorsed.

Thereafter the defendant, having appeared specially for the purpose, filed a petition for the removal of the action to this court on the ground of diversity of citizenship, which motion was duly granted by the state court.

Thereafter the defendant filed motion in this court "for an order vacating and setting aside the attempted service of process and of a complaint herein, and dismissing the complaint for want of jurisdiction of the defendant's person, on the ground that the defendant, at the time of the attempted service, was not doing business in the State of Connecticut and was not present at said time, in the District of Connecticut." To this motion, which was filed nine days prior to the time set for its return, were appended affidavits by the officers of the defendant corporation, in which the following facts are disclosed:

That the defendant is a holding company, chartered by the state of Delaware for the financing and purchasing for plumbing contracting companies; that it owns stock in some twenty-two such companies, one of which is a Connecticut corporation; that the defendant owns all of the stock in said Connecticut corporation, and prior to this action had pledged the same in New York to secure an obligation of the defendant; that the defendant's treasurer, on whom the writ in this case was served, is president of said Connecticut subsidiary, and has his personal residence in Connecticut, going to New York usually once a week to perform his duties as treasurer of the defendant; for the personal convenience of said treasurer the defendant has made such arrangements that he may receive requisitions from the defendant's New York office and make out checks in Connecticut which are in the usual course sent to the New York office for handling; that occasionally the defendant, due to temporary financial stringency, has made loans from its Connecticut subsidiary which have been deposited in Connecticut banks for specific obligations of the defendant; that the defendant ships goods to its Connecticut subsidiary in Connecticut on orders transmitted by the subsidiary to the New York office of the defendant; that it has no dealings or contracts whatever with others in Connecticut, and maintains no officers or agents in the state for the solicitation or execution of contracts in Connecticut; that it maintains, leases, and owns no office, no real estate or personal property, in the state, and no bank accounts other than the intermittent credits described above resulting from loans from its Connecticut subsidiary; and that it pays no taxes in Connecticut, and has not qualified as a foreign corporation doing business therein.

The plaintiff's claim in opposition to these motions is to the effect that objection to jurisdiction such as this, depending for its validity upon facts outside the record, must be made, if at all, by a plea to the jurisdiction filed in conformity with state practice on which an issue of fact may be joined which shall be resolved by actual testimony in open court; that, such being the practice in the state courts, this court is bound by the Conformity Act, 28 USCA § 724, to require similar procedure.

It will be observed at the outset that the defendant's motions do not seek to question the existence of "federal jurisdiction" — meaning by that term the power of a federal court, as distinguished from a state court of general jurisdiction, to entertain the case. Indeed, it was necessary for the defendant in obtaining a removal of the case from the state court to show the existence of such federal jurisdiction. And, if it succeeded in making that showing, it could not, if it would, now bring these elements of jurisdiction into question. In any event, the record clearly discloses the requisite diversity of citizenship and amount in controversy to sustain federal jurisdiction under Judicial Code § 24 (1), 28 USCA § 41 (1).

Nor is objection made on account of venue. To be sure, the record discloses that neither plaintiff nor defendant is a resident of Connecticut. And section 51 (a) of the Judicial Code (28 USCA § 112 (a) provides: "No civil suit shall be brought in any district court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant."

But it is now definitely established that with regard to cases coming to the federal courts by removal from state courts, section 51 (a), just quoted, yields to section 29 of the Judicial Code (28 USCA § 72). And in all such cases, as is there provided, the suit must be removed "into the district court to be held in the district where such suit is pending." Lee v. Chesapeake & Ohio R. Co., 260 U. S. 653, 43 S. Ct. 230, 67 L. Ed. 443; General Investment Co. v. Lake Shore & M. R. Co., 260 U. S. 261, 43 S. Ct. 106, 67 L. Ed. 244; Gt. Northern Ry. Co. v. Galbreath Cattle Co., 271 U. S. 99, 46 S. Ct. 439, 70 L. Ed. 854.

It thus appearing that the so-called "federal jurisdiction" of the case is unquestionable, the defendant, by its motions, questions the existence of jurisdiction on the fundamental ground that the court is without jurisdiction of the person of the defendant. In other words, the defendant claims that the court is without jurisdiction, since the record fails to disclose any valid service on the defendant within the jurisdiction. As to this, the record discloses that the defendant is a Delaware corporation. Such being the case, it is to be classified as a citizen of Delaware, both for the purposes of federal jurisdiction, Barrow Steamship Co. v. Kane, 170 U. S. 100, 18 S. Ct. 526, 42 L. Ed. 964; Louisville, Cincinnati, & Charleston R. R. Co. v. Letson, 2 How. 497, 11 L. Ed. 353; Wells Co. v. Gastonia Cotton Mfg. Co., 198 U. S. 177, 25 S. Ct. 640, 49 L. Ed. 1003, and also for the purposes of venue under section 51 of the Judicial Code (28 USCA § 112), Central Trust Co. v. McGeorge, 151 U. S. 129, 14 S. Ct. 286, 38 L. Ed. 98; Jones v. Consolidated Wagon & Machine Co. (D. C.) 31 F.(2d) 383, appeal dismissed, 280 U. S. 519, 50 S. Ct. 65, 74 L. Ed. 589; Steidle v. Reading Co. (C. C. A.) 24 F.(2d) 299, certiorari denied, 278 U. S. 609, 49 S. Ct. 13, 73 L. Ed. 535. The defendant being thus described as a nonresident of Connecticut, the record nowhere discloses facts from which its presence within the jurisdiction can be found. The sheriff's return of service, it will be observed, recites merely service upon an officer of the defendant in Connecticut. It does not even purport to recite the presence of the defendant itself in Connecticut. Nor does the record by the sheriff's return, or elsewhere, disclose any attachment of property of the defendant within the jurisdiction. But the complaint discloses a right of action in personam, and jurisdiction of the person is an essential element of the jurisdiction of every court, state or federal, in every action in personam. Ex parte Craig (C. C. A.) 282 F. 138; Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565; Caledonian Coal Co. v. Baker, 196 U. S. 432, 444, 25 S. Ct. 375, 49 L. Ed. 540.

It is well established that the peculiar facts requisite to federal jurisdiction must affirmatively appear. Otherwise it will be presumed that federal jurisdiction is absent, and the case will be dismissed. 28 USCA § 41 (1), notes 61 and 71. A fortiori, a similar presumption must obtain as to a fundamental condition of jurisdiction, such as jurisdiction over the person.

The existence of this presumption is clearly disclosed in cases in which it is sought to attack the judgment of a court of general jurisdiction. And it is generally held that, if the record even of such a court discloses that the defendant in a personal action, "at the time of the alleged service, was without...