Ostrander v. Deerfield Lumber Co.

RAY, District Judge. The defendants, having appeared specially and moved this case from the Supreme Court of the state of New York to the District Court of the United States, now move to set aside the service of the summons made on the defendant Deerfield Dumber Company by serving same on Amos N. Blandin, its president, at Troy, N. Y., and on the said Amos N. Blandin individually, on the grounds: (1) That defendant Deerfield Dumber Company is a corporation of the state of Vermont, and not of the state of New York, and has no property, business, or place of business in the state of New York, and that its president was not in the state of New York, transacting any business of or for the company, when the summons was served on him, and that, as to the defendant Blandin, there is no separable controversy; and (2) that defendant Blandin was enticed into the state of New York by the plaintiff by trick, artifice, and deceit, for the purpose of making such service. I do not need to go into the evidence on this last proposition, but [541] content myself with stating that, while the circumstances of obtaining such service are somewhat suspicious, I do not think the charge made is sustained. The presumption is in favor of honesty of purpose, and, accepting the explanation of the suspicious circumstances, I am of the opinion I would not be justified in holding that the service was obtained in the manner and by the means alleged by the defendant. [1, 2] On the other question the law is quite strict and well settled. First, the Supreme Court of the United States has held that service of a summons on a nonresident corporation, good under one law, may not be good under the general law, which the federal courts must follow; and, second, that after removal to the United States courts the validity of such service may be attacked and set aside, provided the defendant has not appeared generally and submitted himself to the jurisdiction of the court. Remington v. Central Pac. R. Co., 198 U. S. 95, 25 Slip. Ct. 577, 49 L. Ed. 959; Goldey v. Morning News, 156 U. S. 523, 525, 15 Sup. Ct. 559, 39 L. Ed. 517; Conley v. Mathieson Alkali Works, 190 U. S. 406, 23 Sup. Ct. 728, 47 L. Ed. 1113; Wabash Western R. v. Brow, 164 U. S. 271, 17 Sup. Ct. 126, 41 L. Ed. 431; Pennsylvania, etc., v. Meyer, 197 U. S. 407, 25 Sup. Ct. 483, 49 L. Ed. 810; Southern Pac. Co. v. Denton, 146 U. S. 202, 13 Sup. Ct. 44, 36 L. Ed. 942; Rouden Machinery Co. v. American M. I. Co. (C. C.) 327 Fed. 1008; Wilkins v. Queen City, etc. (C. C.) 154 Fed. 173; Craig v. Welch Motor Car Co. (C. C.) 165 Fed. 554. [3] The defendant corporation asserts and so far as appears it had no property or business office or place of business in the state of New York, and neither carried on nor carries on or transacts any business in such state (except that it be occasional and special in relation to some special matter). So far as appears, Mr. Blandin, defendant’s president, came into the state of New York February 19, 1913, to con-stilt in regard to some business matter connected with some real property owned by the Rich Rumber Company, a Corporation, which land is situated in the state of Vermont, but in fact held no consultation and transacted no business whatever. Pie was not in the state of New York in his capachy of president of the defendant corporation, or for the purpose of transacting any business for it or in its behalf. lie was in the state of New York, therefore, in his individual capacity and on his own business. Under such circumstances, service on Mr. Blandin was not good service on the defendant corporation. The defendant corporation had no property in the state of New York; it was not transacting or carrying on any business in the state of New York at or about the time the action was commenced; it had no office or place of business in the state of New York; and Blandin, the president, was not in the state of New York on any business of the company, or’ engaged in transacting any business for the corporation, at the time when service was made. In Conley v. Mathieson Alkali Works, 190 U. S. 406, 410, 411, 23 Sup. Ct. 728, 729 (47 L. Ed. 1113), it was held: “Granting the existence of a cause of action, it is not every service upon an officer of a corporation which will give a state court jurisdiction of a foreign corporation.” [542] • ’Th'e residence of an officer of a corporation does not necessarily give ■the corporation a domicile in the state. He must be there officially representing the corporation in its business. Goldey v. Morning News, 156 U. S. 518, 15 Sup. Ct. 559, 39 L. Ed. 517. Service in New York of a summons in New York upon a director of a foreign corporation who resides in New York is not sufficient to bring the corporation into court when, at the time of service, the corporation was not doing business in the state of New York. The doctrine of Goldey v.- Morning News was reiterated and affirmed in Wabash Western Railway v. Brow, 164 U. S. 271, 17 Sup. Ct. 126, 41 L. Ed. 431. See, also, St. Clair v. Cox, 106 U. S. 350, 1 Sup. Ct. 354, 27 L. Ed. 222. In Lumberman’s Insurance Co. v. Meyer, 197 U. S. 407, 25 Sup. Ct. 483, 49 L. Ed. 810, it was held: “In order that a federal 'court may obtain jurisdiction over a foreign corporation, the corporation must, among other things, be doing business within the state.” .-In that case, however, the foreign corporation issued policies of insurance on real property situated in New York. After loss its agents were there adjusting the loss when service was made. This was held sufficient, as the corporation was then engaged in doing business in the state of New York. At page 415 of 197 U. S., at page 485 of 25 Sup. Ct. (49 L. Ed. 810), the court, per Mr. Justice Peckham, said: “A fire insurance company, which issues its policies upon real estate and personal property situated in another state, is as much engaged in its business when its agents are there under its authority adjusting the losses covered by its policies as it is. when engaged in making contracts to take such risks. If not doing business, in such case, what is it doing? It is doing the act provided for in its contract, at the very place where, in case a loss occurred, the company contemplated the act should be done; and it does it in furtherance of the contract and in order to carry out its provisions, and it could not properly he carried out without this act being done; and the contract itself is the very kind of contract which constituted the legal business of the company, and for the purpose of doing which it was incorporated.” In the case at bar there are no facts indicating that the defendant company had any business or was doing any .business in the state of New York. Conley v. Mathieson Alkali Works, supra, is a case where the case was commenced in the state court, and thereafter, and after alleged service of the summons, transferred to the Circuit Court of the United States, where the motion to set aside the service was made. Goldey v. Morning News, supra, Craig v. Welch Motor Car Co., supra, and other cases above cited are where the action was brought in the state court and transferred to the federal courts, where the motion was made to set aside the service. It follows that service of the summons in this case as against and on the Deerfield Lumber Company was of no force and must be set aside, but the service on the defendant Amos N. Blandin was good and sufficient. Whether the -action is one that can be prosecuted against him aloné is a question that will come up on the trial. Ordered accordingly.