Lathrop, Shea Henwood Company v. Interior Construction Improvement Company
| Decision Date | 06 December 1909 |
| Docket Number | No. 2,2 |
| Parties | LATHROP, SHEA, & HENWOOD COMPANY, Plff. in Err., v. INTERIOR CONSTRUCTION & IMPROVEMENT COMPANY |
| Court | U.S. Supreme Court |
Mr. Clarence M. Bushnell for plaintiff in error.
Mr. C. Walter Artz for defendant in error.
The parties were respectively plaintiff and defendant in the court below, and we shall so designate them.
The plaintiff brought suit against the defendant and the Pittsburg, Shawmont & Northern Railroad Company in the supreme court of Erie county, New York, for the sum of $43,038.88, upon a contract entered into between the defendant, the Interior Construction & Improvement Company, and the plaintiff, by which the construction company agreed to construct certain portions in Pennsylvania and New York of the line of the railroad company, and for materials and the use of certain articles by the railroad. It is alleged in the petition of the plaintiff that the railroad company was organized by the consolidation of other railroad companies, and, for the purpose of carrying out the plans of such consolidation, undertook the construction of a railroad from certain points in Pennsylvania to the village of Angelica, in the state of New York. That in pursuance of this purpose the railroad company entered into a contract with the construction company, and in payment for the construction of the railroad agreed to issue and did issue to the company its stock and bonds, which were largely in excess of cost of construction. That the construction company was organized solely for the purpose of building the railroad, and to secure to the promoters and organizers thereof the profits to be made by the construction of the railroad and the manipulation of securities. That the officers, directors, and owners of the majority of the capital stock of the railroad had like relation to the construction company, and the management of the latter was controlled by them. And it is averred that the construction company was the agent and representative of the railroad company, and that the latter became and is responsible and liable for the acts and obligations of the construction company. Due performance by plaintiff of its contract is alleged.
It is further alleged that the railroad company is a New York corporation and the construction company is a New Jersey corporation.
There was personal service of the summons on the railroad company on the 24th of October, 1904. That company appeared and answered. The service upon the construction company was made on the 16th of November, 1904, by serving the summons on the secretary of state of the state of New York. The construction company made a motion to set aside the service of summons on the ground that it was irregular and void. The company made no other appearance. The motion was denied, and appeal was taken to the appellate division of the court. That court affirmed the ruling, and denied leave to appeal to the court of appeals. The construction company's time to answer was extended to February 6, 1905, and, upon motion of the company, the case was removed to the United States circuit court on the ground of a separable controversy, but was subsequently remanded upon motion of the plaintiff. The motion to set aside the service of summons was denied. 135 Fed. 619. Upon the return of the case to the state court, a motion was made by the construction company to extend its time to appear and answer in the action until twenty days after the determination of the motion then pending, made in behalf of the railroad company, to compel the plaintiff to elect which defendant it would proceed against, to the exclusion of the other. The motion was denied, also that made by the railroad company. The referee to whom the issues raised by the railroad company had been referred, to hear and determine, reported dismissing the complaint as to that company and judgment thereon was entered on the 26th of October, 1905. The judgment was affirmed by the appellate division of the supreme court. But, pending the appeal, upon motion of the construction company the case was removed to the circuit court, but that court remanded the case, saying that, 'until the determination of the appeal by the codefendant, in the absence of fraud or improper joinder of defendants for the purpose of interfering with or obstructing the construction company's right of removal, it is not thought that a separable controversy exists.' 143 Fed. 687.
On the 23d of September, 1905, an affidavit of the default of the construction company having been filed, an order was made in the supreme court, reciting the fact, and the facts showing such default, and appointing a referee 'to take proofs of the cause of action set forth in the plaintiff's complaint.' The referee reported that there was due plaintiff the sum of $47,323.91. The report was confirmed and judgment entered for that amount.
Subsequently, the appellate division having sustained the judgment dismissing the action as to the railroad company, the case was again, on the motion of the company, removed to the circuit court, and a motion made in that court to set aside the service of summons on the construction company,...
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