Victor Cornille & De Blonde v. R. G. Dun & Co.

• Decision Date: 04 June 1923
• Docket Number: 23628
• Citation: 153 La. 1078,97 So. 197
• Parties: VICTOR CORNILLE & DE BLONDE et al. v. R. G. DUN & CO
• Court: Louisiana Supreme Court

97 So. 197

153 La. 1078

VICTOR CORNILLE & DE BLONDE et al. v. R. G. DUN & CO

No. 23628

Supreme Court of Louisiana

June 4, 1923

Appeal from Civil District Court; Parish of Orleans; Hugh C. Cage Judge.

Action by Victor Cornille & De Blonde and others against R. G. Dun &amp Co. From a judgment dismissing the action for want of jurisdiction, plaintiffs appeal.

Affirmed.

Lazarus Michel & Lazarus and Herbert S. Weil, all of New Orleans, for appellants.

Richard B. Montgomery, of New Orleans, for appellee.

OPINION

O'NIELL, C. J.

The question in this case is whether an ordinary partnership domiciled in another state and composed of nonresidents is subject to the jurisdiction of a local court, by service of citation upon a clerk employed by the partnership, in the establishment where the firm is doing business in this state. The judge of the civil district court dismissed the suit for want of jurisdiction, and the plaintiffs have appealed.

The action is for $ 70,000 damages for the publication of a commercial report on the plaintiffs, which they allege was false and injurious. They ask only for a judgment against the partnership, not for a judgment against the partners individually. The suit was dismissed heretofore on an exception to the citation. On appeal, the judgment was reversed, and the case remanded for further proceedings. The question of jurisdiction was not then presented. We prefaced our former opinion with that statement, and said that, in considering the question of validity of the citation, we assumed that the defendant partnership was subject to the process of the court. See Victor Cornille & De Blonde et al. v. R. G. Dun & Co., 143 La. 1045, 79 So. 855.

The firm of R. G. Dun & Co. is not a trading partnership or commercial partnership, as defined in article 2825 of the Civil Code. It is a nontrading partnership, an ordinary partnership, as defined in article 2826. It is a partnership whose members are liable only jointly, not in solido, for the partnership's debts.

The firm has its domicile and principal establishment in New York, and is composed of three members, one residing in New York, another in New Jersey, and the third in Maryland.

In Flexner v. Farson, 248 U.S. 289, 39 S.Ct. 97, 63 L.Ed. 250, a statute of Kentucky, undertaking to subject nonresident partnerships to the jurisdiction of the state courts, by service of process on the local manager of the partnership's business conducted in Kentucky, or upon an agent in charge of the local business of the nonresident firm, was declared invalid. Judgment was obtained in Kentucky against a partnership whose members resided in Illinois. The partnership was doing business in Kentucky, and the cause of action arose there. An action of debt was brought in Illinois on the judgment rendered by the Kentucky court. The Illinois court gave judgment for the defendants, which was affirmed on appeal to the Supreme Court of the state. The plaintiff brought the case to the Supreme Court of the United States on a writ of error, contending that the Supreme Court of Illinois had not given full faith and credit to the judgment of the Kentucky court. The citation in the original suit, in Kentucky, had been served upon an agent, Washington Flexner, who had had charge of the local business of the nonresident firm at the time of the transaction sued on. He had ceased to act as agent for the firm when the citation was served; but that circumstance was not the basis of the decision in the case. Mr. Justice Holmes, for the court, having stated the facts, said:

"It is argued that the pleas tacitly admit that Washington Flexner was agent of the firm at the time of the transaction sued upon in Kentucky, and the Kentucky statute is construed as purporting to make him agent to receive service in suits arising out of business done in that state. On this construction, it is said that the defendants, by doing business in the state, consented to be bound by the service prescribed. The analogy of suits against insurance companies based upon such service is invoked. Mutual Reserve Fund Life Association v. Phelps, 190 U.S. 147, 47 L.Ed. 987, 23 S.Ct. 707. But the consent that is said to be implied in such cases is a mere fiction, founded upon the accepted doctrine that the states could exclude foreign corporations altogether, and therefore could establish this obligation as a condition to letting them in. Lafayette Ins. Co. v. French, 59 U.S. (18 How.) 404, 15 L.Ed. 451; Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93, 96, 61 L.Ed. 610, 37 S.Ct. 344. The state had no power to exclude the defendants and on that ground without going farther the Supreme Court of Illinois rightly held that the analogy failed, and that the Kentucky judgment was void. If the Kentucky statute purports to have the effect attributed to it, it cannot have that effect in the present case. New York Life Ins. Co. v. Dunlevy, 241 U.S. 518, 522, 523, 60 L.Ed. 1140, 36 S.Ct. 613. Judgment affirmed."

It is argued by the learned counsel for appellants that the ruling in Flexner v. Farson would not be appropriate in Louisiana because, in our civil law system, a partnership is a distinct entity, though it is not so at common law. It is argued that, where a partnership is regarded as an entity, distinct from the individuals composing it, it is...