Toulmin v. James Mfg. Co., 2235.

• Citation: 27 F. Supp. 512
• Decision Date: 08 May 1939
• Docket Number: No. 2235.,2235.
• Parties: TOULMIN et al. v. JAMES MFG. CO.
• Court: U.S. District Court — Western District of New York

27 F. Supp. 512

TOULMIN et al. v. JAMES MFG. CO.

No. 2235.

District Court, W. D. New York.

May 8, 1939.

Karl A. McCormick, of Buffalo, N. Y., for plaintiffs.

James O. Moore, of Buffalo, N. Y., for defendant.

KNIGHT, District Judge.

The plaintiffs are residents of the State of Ohio. Defendant is a corporation organized under the laws of the State of Wisconsin, qualified to do business in New York State. Defendant owns and operates an office and plant in this district. This suit is brought to recover for services alleged to have been performed by the plaintiffs for defendant.

The defendant appears specially and moves to dismiss the complaint upon the ground that this court does not have jurisdiction over the subject matter of the suit or the parties thereto. The question raised as to the jurisdiction of this court over the subject matter of the suit seems to have been abandoned by the defendant. In this connection, however, it is to be said that the plaintiff contends that the raising of this particular question of jurisdiction of the subject matter constitutes a general appearance. It is not thought that it does. Rules of Civil Procedure, Rule 12(b), 28 U.S.C.A. following section 723c; American-Mexican Claims Bureau v. Morgenthau, D.C. 26 F.Supp. 904; Herzog v. Hubard, 68 App.D.C. 383, 98 F.2d 255; Armstrong v. Langmuir, 2 Cir., 6 F.2d 369.

The other question for determination is whether, plaintiffs being non-residents of this district and the defendant corporation incorporated under the laws of the State of Wisconsin but authorized to do and doing business under the laws of the State of New York, the defendant is a resident of the State of New York within the meaning of Section 51 of the Judicial Code, as amended, 28 U.S.C.A. § 112.

The court has general jurisdiction of the suit, the amount involved being upwards of $3,000, and there being diversity of citizenship. Section 51(a), supra, so far as pertinent here, reads: "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." Article 13, section 210 et seq., of the General Corporation Law of the State of New York, Consol.Laws N.Y. c. 23, provides that a foreign corporation shall not do business in that state unless it shall have complied with certain provisions of the Act and shall designate the Secretary of State as the agent upon whom all process might be served. Upon the compliance a certificate of authority is issued by the Secretary of State. In the instant case presumably such certificate was filed, the certificate of authority issued and an agent (Art. 13, supra, sec. 213) designated for the service of process.

It is conceded that this court would not have jurisdiction if there were not such a statutory provision. It is the claim of the plaintiffs that the jurisdiction is a matter of personal privilege which is waived by compliance with the statute hereinbefore mentioned; that defendant was a resident of this district within the meaning of the law.

In Shaw v. Quincy Mining Co., 145 U. S. 444, 12 S.Ct. 935, 36 L.Ed. 768, suit was brought by a citizen of Massachusetts in the Southern District of New York against a corporation organized under the laws of the State of Michigan. The defendant company was described as having its usual place of business in New York. It was held, following In re Schollenberger, 96 U. S. 369, 24 L.Ed. 853, that "a corporation could not be considered a citizen or a resident of a state in which it had not been incorporated" 145 U.S. 444, 12 S.Ct. 938, and that the court did not have jurisdiction. McCormick Harvesting Mach. Co. v. Walthers, 134 U.S. 41, 10 S.Ct. 485, 31 L.Ed. 833; Southern Pacific Co. v. Denton, 146 U.S. 202, 13 S.Ct. 44, 36 L.Ed. 942; In re Keasbey & Mattison Co., 160 U.S. 221, 16 S.Ct. 273, 40 L.Ed. 402; Western Loan & Savings Co. v. Butte & Boston Consol. Min. Co., 210 U.S. 368, 28 S.Ct. 720, 52 L.Ed. 1101; Seaboard Rice Milling Co. v. Chicago, etc., Ry. Co., 270 U.S. 363, 46 S.Ct. 247, 70 L.Ed. 633; Luckett v. Delpark, 270 U.S. 496, 497, 46 S.Ct. 397, 70 L.Ed. 703; McLean v. State of Mississippi, 5 Cir., 96 F.2d 741; Standard Stoker Co. v. Lower, D.C., 46 F.2d 678; Jones v. Consolidated Wagon & Mach. Co., D.C., 31 F.2d 383; O'Donnell v. Slade, D.C., 5 F.Supp. 265; Platt v. Massachusetts Real-Estate Co., CC., 103 F. 705; Beech-Nut Packing Co. v. P. Lorillard Co., D.C., 287 F. 271; are all in accord with the decision in Shaw v. Quincy Mining Co., supra. We may say, as was said in Standard Stoker Co. v. Lower, supra, with reference to the Denton case, supra, that the Supreme Court has never qualified its decision in the Shaw case.

The only decisions which are urged as holding to the contrary are United States v. Southern Pacific R. Co., C.C., 49 F. 297; Patten v. Dodge Mfg. Co., D.C., 23 F.2d 852; Dodge Mfg. Co. v. Patten, 7 Cir., 60 F.2d 676; Riddle v. New York, L. E. & W. R. Co., C.C., 39 F. 290, and Consolidated Store-Service v. Lamson Consolidated Store-Service, C.C., 41 F. 833. Certain of these cases are distinguishable, while certain may be said to be in conflict with the weight of authority. In United States v. Southern Pacific R. Co., supra, it was held that a corporation might acquire "habitation" in a state other than where incorporated and thereby confer jurisdiction in personam. This decision was rendered in February, 1892, and Shaw v. Quincy was decided in May, 1892. Mr. Justice Harlan, sitting in the latter court, dissented from the majority opinion. The decision in the circuit in Patten v. Dodge, supra, seems to be based on the decision on United States v. Southern Pacific R. Co., supra. In the district court the last mentioned case and Riddle v. New York, L. E. & W. R. Co., supra, Consolidated Store-Service v. Lamson Consolidated Store-Service, supra, are described as supporting the view of that court. All of these cases sustain jurisdiction on a ground non existent in United States v. Southern Pacific R. Co., supra, and that is that defendant waived venue and consented to suit against it in doing business within the state as a foreign corporation under the authority of a state statute. It seems that this is not the law as it has been construed by the Supreme Court and other courts. In McLean v. State of Mississippi, supra, the precise question here was involved, and there the court said 96 F.2d 743: "Neither the statute nor the consent attempts to limit their effect to suits in the State courts, but apply broadly to all legal proceedings. But as to suits in the federal courts we feel constrained to hold that the provision for local service is not a waiver of venue. A corporation is an `inhabitant' of and `resides' in the State and district of its incorporation, and the fact that it does business elsewhere and there has agents who may be served with process does not affect its venue rights under the federal statute." It was said in Southern...