Clews v. Woodstock Iron Co.

44 F. 31, 1890 U.S. App. LEXIS 1556

• Court: U.S. Circuit Court for the District of Southern New York
• Decided: October 13, 1890
• Status: Published

Opinion

Lacombe, Circuit Judge.

In Good Hope Co. v. Railway B. F. Co., 22 Fed. Rep. 635, it was held that service of summons upon the president, secretary, or treasurer of a foreign corporation, which is not engaged in business in this state, would be inoperative to confer jurisdiction. The decision was rendered after the converse of that proposition had been announced by the court of appeals, (construing section 432 of the Now York Code,) this court quoting with approval the language of the opinion in Moulin v. Insurance Co., 24 N. J. Law, 224, which characterized a law similar to that of this state as “ so contrary to natural justice and to the principles of international law that courts of other states ought not to sanction it.” As indicated in Golden v. Morning News, 42 Fed. Rep. 112; that decision must be accepted as settling the law in this circuit. Its principles are as applicable to causes which are removed as to those which are not. It would be absurd to hold that proceedings in a state court were void on the theory that such court acquired no jurisdiction of the party because its attempted service of process was abhorrent to natural justice and international law, and at the same time to hold that a federal court could administer justice under such a service after the cause had been removed to its forum. Nor does removal and special appearance by the defendant waive its right to avail of a defective service. Harkness v. Hyde, 98 U. S. 476; Miner v. Markham, 28 Fed. Rep. 395. The only question, therefore, which is left for decision upon this application is whether the corporation defendant was at the time of service of the summons engaged in business in this state. That question must'be determined by what it had done, or was doing, at that time, rather than by what it might do thereafter. That it will probably hereafter provide a regular agency in this state for the continuous transaction of the -business of registration and transfer of its bonds and payment of the interest on the coupons during the continuánce of the mortgage is immaterial. The only business which it had done up to the 18th July was the borrowing of money upon its bond and mortgage, and the obtaining from the stock exchange of the privilege of having such bonds called on the list of securities dealt in on its floor. It could apparently have secured this privilege, and could have sold its bonds by correspondence. It kept no office here. It did not continuously, or even for a period of some duration, carry on here the business which it was organized to carry on, and by the regular transaction of which it gave evidence of its continued existence. It cannot, therefore, be held under the authorities that the defendant was, at the time when Tyler was served, engaged in business in this state so as to make service of the summons on him efficient to bind the corporation. U. S. v. American Bell Tel. Co., 29 Fed. Rep. 37; Good Hope Co. v. Railway B. F. Co., 22 Fed. Rep. 635; Hunter v. Improvement Co., 26 Fed. Rep. 299; St. Louis Wire-Mill Co. v. Consolidated Barb-Wire Co., 32 Fed Rep. 802; Carpenter v. Air-Brake Co., Id. 434. Motion granted.