N. K. Fairbank & Co. v. Cincinnati, N. O. & T. P. Ry. Co.

GRESHAM, Circuit Judge.

This action was brought by N. K. Fairbank <& Co., a corporation organized under the laws of Illinois, in the district of its residence, against the Cincinnati, New Orleans <& Texas Pacific Railway Company, an Ohio corporation, owning and operating a line of railway extending from Cincinnati, in the last-named state, to Chattanooga, in the state of Tennessee, to recover the value of á car load or more of cotton oil which was lost hy tho defendant, while in its possession as a common carrier. The first summons was returned, not served, by order of the plaintiff, and an alias writ was issued, which the marshal returned:

“Served by delivering a copy to O. S. Henry, northwestern agent of defendant, November 15, 1890; tho president of defendant not being found in this district.”

On December 16, 1890, the defendant, by its counsel, made the following motion:

“The Cincinnati, New Orleans & Texas Pacific Railway Company, named defendant in the above-entitled cause, appears specially for the purpose herein set forth, and for no other purpose, and hereby moves the court to set aside the return of the marshal npon the summons issued in said cause, for the reason that said return is untrue in fact, and to disregard it for the reason that it is insufficient in law, and hereby prays the judgment of this court whether it should be compelled to appear herein, or plead to the declaration filed herein, for the reason that it has not been served with process herein. and is not compellable to appear or plead to the said declaration, and has not accepted, and does not accept, service herein, nor waive due service of process upon it, and for the further reason that the defendant is not doing business in said district, nor within the state of Illinois, and was not found within said district, or within the state of Illinois, and because said defendant is a nonresident corporation.”

This motion remained pending until February 15, 1892, when the plaintiff caused a pluries summons to issue, which was returned by the marshal:

“Served on the 15th of February inst. by delivering true copies to Hartwell •Osborn, general agent of defendant, and W. K. Northam, contracting agent of the defendant; the president of the defendant not being found in this district.”

A motion was made to quash this return for the same reasons assigned against the validity of the other return, and both motions were heard at the same time.

It appeared from the evidence, (affidavits in support of and against the motions,) and the circuit court found, that the persons mentioned in the returns were employed by the defendant, at the time of the alleged service of the writs, for the sole purpose of diverting freight and passengers destined south to such railroads leading out of Chicago as had running connections with the defendant’s line at Cincinnati; that they had no authority to sell tickets, or make contracts or rates, for the transportation of freight or passengers over the defendant’s road; that, to better enable them to thus serve the defendant, it supplied them, at its own expense, with desks in a room in Chicago which was occupied in part by employes of other railroad companies, and that when the suit was commenced, and the process served, as stated, the defendant’s principal office was in the state of Ohio, and it had no office, and owned no railroad or other property, in Illinois. Judgment was entered, quashing both returns, and dismissing the suit, for want of jurisdiction, and this writ of error was prosecuted by the-plaintiff.

The action was brought by an Illinois corporation, in the district of its residence, against an Ohio corporation, to recover a sum of money in excess of $2,'000. The jurisdiction of the court over the subject-matter was clear, and the suit was properly brought. The act of August 13, 1888, (25 St. p. 434,) declares that no civil suit shall be brought in any circuit court of the United States against any person in any other district than that whereof he is an inhabitant; “but, when 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.” It is now settled that, when the jurisdiction is founded solely upon the fact that the parties are citizens of different ••states, the suit may be brought in the district in which either the plaintiff or the defendant resides. Railway Co. v. McBride, 141 U. S. 127, 11 Sup. Ct. Rep. 982; Shaw v. Mining Co., 145 U. S. 444, 12 Sup. Ct. Rep. 935.

Was the service on the persons named in the returns binding upon the defendant? Section 5 of the Illinois practice act (Rev. St. 1874) provides that, in all cases where suit is brought against any incorporated company, process shall be served upon the president, if he resides in the county, and if absent from, or he does not reside in, it, the summons shall be served by leaving a copy thereof with any clerk, cashier, secretary, engineer, conductor, or any agent of the company found in the county. In Railway Co. v. McDermid, 93 Ill. 170, it was held that this section embraced foreign corporar tious having property in Illinois, and doing business in the state by local agents, and that such corporations might be brought into court by the service of process on such agents. In Railroad Co. v. Crane, 102 Ill. 249, it was held that a railroad company organized under the laws of Missouri, with its office and principal place of business and its tracks in that state, but running trains regularly over the bridge across the Mississippi river at Quincy, Ill., where it had a local agent authorized to make contracts for the transportation of freight and passengers, could be sued in Illinois, and brought into court by the service of process on such local agent. In their facts, these cases are widely different from the one now before this court. The defendant had no agent or other representative in Illinois, authorized to bind it by any kind of contract. It had no property or officer, and no office for the transaction of business, in the state. The room occupied in part by the persons mentioned in the marshal’s returns was not an office, and those persons were mere solicitors of business, and not officers or agents of the defendant,‘within the meaning of the statute. In Construction Co. v. Fitzgerald, 137 U. S. 98, 11 Sup. Ct. Rep. 36, the court, speaking by the chief justice, said:

“Where a foreign corporation is not doing business in a state, and the president or any officer is not there transacting business for the corporation, and representing it in the state, it cannot be said that the corporation is within tho slate, so that service can be made upon it.’’

It was urged by the plaintiff that, in praying the judgment of the court whether it should be compelled to plead, the defendant appeared to the action, and waived its right to object to the returns of service, if they were invalid. This position is untenable. The motion was that the returns be set aside because they were untrue in fact, and therefore did not oblige the defendant to plead. The appearance was solely for the purpose of making that motion. It was the validity of the returns, and not the jurisdiction of the' court over the subject-matter of the suit, that was challenged. The court was not asked to dismiss the suit for want of jurisdiction, or for any other reason. The motion simply stated the reasons why the defendant had not been made subject to the court’s jurisdiction, and prayed judgment whether or not, on the facts stated, it was bound to plead to the merits. The judgment of the circuit court quashing the service of the process is affirmed, and so much of it as dismissed the action for want of jurisdiction is reversed.