Page images
[blocks in formation]

the statute. Bondurant v. Watson, 103 U. S. 288; Lawrence v. Morgan's Railroad, 121 U. S. 636.

The ground of the decision in the Marshall Case, in Gaines v. Fuentes, 92 U. S. 10; Barrow v. Hunton, 99 U. S. 85; McDaniel v. Traylor, 196 U. S. 415; Arrowsmith v. Gleason, 129 U. S. 86; Johnson v. Waters, 111 U. S. 640; Sharon v. Terry, 36 Fed. Rep. 337 cited in Julian v. Central Trust Co., 193 U. S. 112; Dobbins v. Los Angeles, 195 U. S. 224; Howard v. De Cordova, 177 U.S. 609, is that while $ 720 prohibits United States courts from “staying proceedings in a state court,” it does not prevent them from depriving a party of the fruits of a fraudulent judgment, nor prevent the Federal courts from enjoining a party from using that which he calls a judgment but which is, in fact and in law, a mere nullity. That conclusion is inevitable, or else the Federal court must hold that a judgment—void for want of service—is “a proceeding in a state court” even after the pretended litigation has ended and the void judgment has been obtained. Such a ruling would involve a contradiction in terms, and treat as valid for some purposes that which the courts have universally held to be a nullity for all purposes.

5. If, then, there was equity in the bill, and if the United States court had jurisdiction of a suit brought to enjoin the plaintiff from using a judgment alleged to be void because of fraud in its procurement and for want of service on the defendant, it becomes necessary to determine whether the Railway Company established the allegations of its bill.

The Master found as a fact that the Southern Railway was not doing business within the State of Louisiana; that there had been no fraud in the procurement of the judgment; and that the service on the Assistant was not the service on the Secretary of State required by the statute. He therefore recommended that a decree be entered enjoining the plaintiff from using the judgment obtained in

[blocks in formation]

the District Court of the Parish of Orleans. The Circuit Court made no finding on the question of fraud, but ruled (184 Fed. Rep. 959) that the service was void because Act 54 was unconstitutional in that it contained no provision requiring the Secretary of State to give the foreign corporation notice that suit had been brought and citation served. In support of that construction it quoted at length a statement of the Supreme Court of Louisiana in Gouner v. Missouri Valley Bridge Co., 123 Louisiana, 964. In that case service was made on the Secretary of State after the foreign corporation sued had left the State. As the court held that the statute did not apply to such absent corporation it did not finally pass on the validity of Act 54 under the state constitution, though it did say:

“This law makes no provision whatever for the service on the defendant. The officer may decline to communicate with the person sued and give no notice whatever; not even by mail. A judgment might be obtained without the least knowledge of the person sued. Under the phrasing of the statute, the duty of the officer begins and ends in his office. If such a judgment were rendered, it could receive no recognition whatever at the place of the domicile. When a petition cannot legally be served on a defendant, the court can exercise no jurisdiction over him. The service defines the court's jurisdiction."

On the other hand, the Circuit Court of Appeals (195 Fed. Rep. 56), while referring to this case, held, citing Amy v. Watertown, 130 U. S. 317, that though the Southern Railway was doing business in Louisiana, yet the default judgment was void because entered in a suit served on the Assistant when the statute designated the Secretary of State as the officer upon whom the citation should be served.

The broader the ground of the decision here, the more likelihood there will be of affecting judgments held by persons not before the court. We therefore purposely


Opinion of the Court.

236 U. S.

refrain from passing upon either of the propositions decided in the courts below, and without discussing the right to sue on a transitory cause of action and serve the same on an agent voluntarily appointed by the foreign corporation, we put the decision here on the special fact, relied on in the court below, that in this case the cause of action arose within the State of Alabama, and the suit therefor, in the Louisiana court, was served on an agent designated by a Louisiana statute.

Subject to exceptions, not material here, every State has the undoubted right to provide for service of process upon any foreign corporations doing business therein; to require such companies to name agents upon whom service may be made; and also to provide that in case of the company's failure to appoint such agent, service, in proper cases, may be made upon an officer designated by law. Mutual Reserve Ass'n v. Phelps, 190 U. S. 147; Mutual Life Ins. Co. v. Spratley, 172 U. S. 603. But this power to designate by statute the officer upon whom service in suits against foreign corporations may be made relates to business and transactions within the jurisdiction of the State enacting the law. Otherwise, claims on contracts wherever made and suits for torts wherever committed might by virtue of such compulsory statute be drawn to the jurisdiction of any State in which the foreign corporation might at any time be carrying on business. The manifest inconvenience and hardship arising from such extra-territorial extension of jurisdiction, by virtue of the power to make such compulsory appointments, could not defeat the power if in law it could be rightfully exerted. But these possible inconveniences serve to emphasize the importance of the principle laid down in Old Wayne Life Association v. McDonough, 204 U. S. 22, that the statutory consent of a foreign corporation to be sued does not extend to causes of action arising in other States.

In that case the Pennsylvania statute, as a condition of

[blocks in formation]


their doing business in the State, required foreign corporations to file a written stipulation agreeing “that any legal process affecting the Company served on the Insurance Commissioner

shall have the same effect as if served personally on the Company within this State" (18). The Old Wayne Life Association having executed and delivered, in Indiana, a policy of insurance on the life of a citizen of Pennsylvania (20) was sued thereon in Pennsylvania. The declaration averred that the Company "has been doing business in the State of Pennsylvania, issuing policies of life insurance to numerous and divers residents of said County and State," and service was made on the Commissioner of Insurance. The Association made no appearance and a judgment by default was entered against it. Thereafter suit on the judgment was brought in Indiana. The plaintiff there introduced the record of the Pennsylvania proceedings and claimed that, under the full faith and credit clause of the Constitution, he was entitled to recover thereon in the Indiana court. There was no proof as to the Company having done any business in the State of Pennsylvania, except the legal presumption arising from the statements in the declaration as to soliciting insurance in that State. This court said:

“But even if it be assumed that the Company was engaged in some business in Pennsylvania at the time the contract in question was made, it cannot be held that the Company agreed that service of process upon the Insurance Commissioner of that Commonwealth would alone be sufficient to bring it into court in respect of all business transacted by it, no matter where, with or for the benefit of citizens of Pennsylvania (21).

Conceding, then, that by going into Pennsylvania, without first complying with its statute, the defendant Association may be held to have consented to the service upon the Insurance Commissioner of process in a suit brought against it there in respect of business transacted by it

Opinion of the Court.

236 U. S.

in that Commonwealth, such assent cannot properly be implied where it affirmatively appears, as it does here, that the business was not transacted in Pennsylvania. As the suit in the Pennsylvania court was upon a contract executed in Indiana; as the personal judgment in that court against the Indiana corporation was only upon notice to the Insurance Commissioner, without any legal notice to the defendant Association and without its having appeared in person, or by Attorney, or by agent in the suit; and as the act of the Pennsylvania court in rendering the judgment must be deemed that of the State within the meaning of the Fourteenth Amendment, we hold that the judgment in Pennsylvania was not entitled to the faith and credit which, by the Constitution, is required to be given to the . judicial proceedings of the several States, and was void as wanting in due process of law."

From the principle announced in that case it follows that service under the Louisiana statute, would not be effective to give the District Court of Orleans jurisdiction over a defendant as to a cause of action arising in the State of Alabama. The service on the Southern Railway, even if in compliance with the requirements of Act 54, was not that kind of process which could give the court jurisdiction over the person of the defendant for a cause of action arising in Alabama. As the Company made no appearance the default judgment was void. Being void the plaintiff acquired no rights thereby and could be enjoined by a Federal court from attempting to enforce what is a judgment in name but a nullity in fact. This conclusion makes it unnecessary to consider whether the Southern Railway was doing business in Louisiana. It also makes it unnecessary to consider the question of fact as to whether the judgment was void because of fraud in its procurement. The decree of the Circuit Court of Appeals must be


« PreviousContinue »