New York Indemnity Co. v. Rasmusson

• Decision Date: 02 August 1932
• Docket Number: No. 236.,236.
• Citation: 1 F. Supp. 156
• Parties: NEW YORK INDEMNITY CO. v. RASMUSSON et al.
• Court: U.S. District Court — Southern District of Texas

1 F. Supp. 156

NEW YORK INDEMNITY CO. v. RASMUSSON et al.

No. 236.

District Court, S. D. Texas, Corpus Christi Division.

August 2, 1932.

Templeton, Brooks, Napier & Brown, of San Antonio, Tex., for plaintiff.

Leo Brewer, Olind H. Pitman, and I. M. Wilford, all of San Antonio, Tex., for defendants.

KENNERLY, District Judge.

This is a hearing on defendants' pleading, denominated a special demurrer, but treated as a motion questioning the jurisdiction of this court, the validity of the process, and the service of process upon defendants, in this cause.

The pleadings and exhibits filed in connection therewith disclose that Alfred Rasmusson, a nonresident of Texas, an employee of the White Sewing Machine Company, also a nonresident of Texas, was injured in the course of his employment, near Beeville, Tex., within this division of this district, on December 9, 1930, and died at Beeville from such injuries on December 12, 1930. The White Sewing Machine Company was an employer and subscriber, deceased was an employee, and plaintiff an insurance company which underwrote the liability of such employer to its employees, under the Texas Workmen's Compensation Law (title 130, articles 8306 to 8309, Texas Revised Civil Statutes of 1925 and amendments Vernon's Ann. Civ. St. art. 8306 et seq.).

Deceased was survived by his wife, Mrs. Mattie Rasmusson, a dependent daughter, Maxine Elinor Rasmusson, and a minor son, Daniel Click Rasmusson (section 8a, article 8306). Seasonably, a claim for compensation under such Compensation Law was duly made by such survivors, such claim heard by the industrial accident board (article 8307), and an award made by such board in favor of such survivors against plaintiff. Moving under such Compensation Law, plaintiff brings this suit against such survivors, and against Ralph N. Kellam and Leo Brewer (their attorneys), to set aside such award. Plaintiff alleges that it is a citizen of the state of New York, that such survivors and defendant Kellam are citizens of the state of Pennsylvania, and that defendant Brewer is a citizen of Texas. It is alleged that Brewer resides in Bexar county, Tex., i. e. in the Western (and not in this) Judicial District. The matter in controversy, exclusive of interest and costs, exceeds $3,000.

1. That this court has jurisdiction of the subject-matter of this suit there can be no doubt. See section 5, article 8307, Texas Revised Civil Statutes of 1925 and amendments (as amended by Acts 1931, c. 224, § 1 Vernon's Ann. Civ. St. art. 8307, § 5),¹ and Ellis v. Associated Industries Ins. Corp. (C. C. A.) 24 F.(2d) 809, 810,² and cases there cited. Also subdivision 1, § 41, title 28, USCA.

2. That this is not a suit of a local nature, within the meaning of sections 115, 116, and 118, title 28, USCA,³ is clear. If the award against plaintiff in favor of defendants by the industrial accident board at Austin be held to be a res, within the meaning of such sections (and I do not so hold), the situs of such res is in the Western District of Texas, and not in this district. Jurisdiction in this district of the subject-matter of a suit to set aside such award would not serve to transfer the situs of such res to this district.

3. This not being a suit of a local nature, the process issued and served, on the theory that it is, is without effect and invalid, and should be quashed. Creager v. P. F. Collier & Son Co. (D. C.) 36 F.(2d) 781, 782.

4. Neither the plaintiff nor the defendants being inhabitants of this district, it is certain that the venue is not in this district. See sections 112, 113, and 114, title 28, USCA⁴; Robertson v. Railroad Labor Board, 268 U. S. 621, 45 S. Ct. 621, 622, 69 L. Ed. 1121, and cases cited in footnote 2 thereto.

5. The process issued in this case, and served on defendants in the respective districts of which they are inhabitants, is ineffective and void. In Robertson v. Railroad Labor Board, supra, it is said:

"Congress clearly has the power to authorize a suit under a federal law to be brought in any inferior federal court. Congress has power, likewise, to provide that the process of every District Court shall run into every part of the United States. Toland v. Sprague, 12 Pet. 300, 328, 9 L. Ed. 1093, 1104; United States v. Union P. R. Co., 98 U. S. 569, 604, 25 L. Ed. 143, 151. But it has not done so.

"* * * Under the general provisions of law, a United States District Court cannot issue process beyond the limits of the district. Harkness v. Hyde, 98 U. S. 476, 25 L. Ed. 237; Ex parte Graham, 3 Wash. C. C. 456 Fed. Cas. No. 5,657. And a defendant in a civil suit can be subjected to its jurisdiction in personam only by service within the district. Toland v. Sprague, 12 Pet. 300, 330, 9 L. Ed. 1093, 1105. Such was the general rule established by the Judiciary Act September 24, 1789, c. 20, § 11, 1 Stat. 73, 79 Comp. Stat. Sec. 1033, in accordance with the practice at the common law. Picquet v. Swan, 5 Mason, 35, 39 et seq., Fed. Cas. No. 11,134. And such has been the general rule ever since. Munter v. Weil Corset Co., 261 U. S. 276, 279, 67 L. Ed. 652, 654, 43 S. Ct. 347."

There are some inapplicable exceptions under sections 113 and 114, and under certain legislation on special subjects, but this is the general rule, and is controlling here.

6. Defendants have not, by reason of deceased's agreement to be bound by the provisions of the Workmen's Compensation Law, nor by defendants filing their claim with the industrial accident board, waived their privileges under sections 112, 113, and 114. Although a proceeding such as this to set aside an award of the industrial accident board is variously referred to as an appeal, review, etc., such proceeding is in fact a new suit, in which new process, etc., must issue. Section 5, article 8307, supra. See articles 1971, 1972, 1973, and 2021, Texas Revised Civil Statutes, 1925, which prescribe how suits are to be instituted. A suit in this court to set aside an award is of the same kind as in the state court, and is by "Original Process" within the meaning of section 112. Defendants, by their presence before such industrial accident board, do not thereby waive any rights or privileges in the new suit.

But whether defendants do, or do not, is not material since, as was said in Robertson v. Railroad Labor Board, supra: "It is obvious that jurisdiction, in the sense of personal service within a district where suit has been brought, does not dispense with the necessity of proper venue. It is equally obvious that proper venue does not eliminate the requisite of personal jurisdiction over the defendant."

It follows, from what has been said, that defendants' motion should be sustained. Let an order be prepared accordingly.

1 Section 5 reads as follows: "All questions arising under this law, if not settled by agreement of the parties interested therein and within the provisions of this law, shall, except as otherwise provided, be determined by the Board. Any interested party who is not willing and does not consent to abide by the final ruling and decision of said Board shall within twenty (20) days after the rendition of said final ruling and decision by said Board, file with said Board notice that he will not abide by said final ruling and decision. And he shall within twenty (20) days after giving such notice bring suit in the county where the injury occurred to set aside said final ruling and decision and said Board shall proceed no further toward the adjustment of such claim, other than hereinafter provided. Whenever such suit is brought, the rights and liability of the parties thereto shall be determined by the provision of this law and the suit of the injured employee or person suing on account of the death of such employee shall be against the association if the employer of such injured or deceased employee at the time of such injury or death was a subscriber as defined in this law. If the final order of the Board is against the association, then the association and not the employer shall bring suit to set aside said final ruling and decision of the Board, if it so desires, and the Court shall in either event determine the issues in such cause instead of the Board upon trial de novo and the burden of proof shall be upon the party claiming compensation. The Industrial Accident Board shall furnish any interested party in said claim pending in Court upon request free of charge, with a certified copy of the notice of the employer becoming a subscriber filed with the Board and the same when properly certified to shall be admissible in evidence in any Court in this State upon trial of such claim therein pending and shall be prima facie proof of all facts stated in such notice in the trial of said cause unless same is denied under oath by the opposing party therein. In case of recovery the same shall not exceed the maximum compensation allowed under the provisions of this law. If any party to any such final ruling and decision of the Board, after having given notice as above provided, fails within said twenty (20) days to institute and prosecute a suit to set the same aside, then said final ruling and decision shall be binding upon all parties thereto, and, if the same is against the association, it shall at once comply with such final ruling and decision, and failing to do so the Board shall certify the fact to the Commissioner of Insurance and such certificate shall...