Ralya Market Co. v. Armour & Co.

SI LIRAS, District Judge. This action, for the recovery of damages for an„ alleged breach of contract, was commenced in the district court of Woodbury county, Iowa; the defendant named in the petition, Armour & Co., being alleged to tie a corporation created under the laws of (lie state of Illinois. The original notice was returned by the sheriff as having been served upon “W. A. Moon, as manager or agent for Armour & Company, a corporation.” This notice required the defendant to appear and plead on or before the 20th day of March. 1900, and on the 30th of March a petition for removal to this court was duly tiled in the district court of Woodbury county, in which it was averred that Armour & Oo. was not a corporation, but was a co-partnership, composed of 3’hilip Í). Armour, J. Ogden Armour, and J. Ogden Armour, 1’. A. Valentine, and May E. Armour, executors of the last will of Philip 1). Armour, deceased, a former partner in said firm: that these several named persons were, when the suit was commenced, and still are, citizens of the state of Illinois, — the plaintiff company' being a corporation created under the laws of the state of Iowa, and the suit involving more than $2,000, exclusive of interest and costs. It was further averred in the petition for removal that the appearance of the petitioner was special only, and not general, and was not intended to waive airc objection to the jurisdiction; but petitioner reserved the right to question the jurisdiction and the validity of the service of the original notice. The state court granted the order of removal, and. the transcript having been filed in this court, a motion was filed by Armour & Co., in which it is recited that the appearance is special only, and for the sole and only purpose of questioning the jurisdiction of the court, and for the purpose of obtaining an order setting aside and quashing the service in the case; and thereupon it is averred that Armour & Oo. was not, when this suit was brought, and service of the notice was made, a corporation, but was a co-partnership, reciting the names of the partners as already given, and that, the so-called service of the notice was invalid and insufficient to give the court jurisdiction in the premises, there being no property attached or otherwise brought within the jurisdiction of the state court. Thereupon the plaintiff, with leave of court, fded an amendment to the petition, setting forth that the defendant Armour & Oo. was a co-partnership composed of the persons whose names have been already given, and [532] prayed judgment on the cause of action originally declared on against Armour & Co. and the individuals constituting the co-partnership. In the form in which the record is now placed before the court, the action is one against the partnership in the firm name, and also against the individuals composing the partnership. By section 3488 of the Code of Iowa it is enacted that: “Actions may be brought by or against a partnership as such, or against all or either of the individual members thereof, or against it and all or any members thereof; and a judgment against the firm as such may be enforced against the partnership property, or that of such members as have appeared or been served with notice. A new action may be brought against the members not made parties on the original cause of action.” By section 3532 it is provided that: “When a corporation, company or individual has, for the transaction of any business, an office or agency in any county other than that in which the principal resides, service may be made on any agent or clerk employed in such office or agency, in all actions growing out of or connected with the business of that office or agency.” Under these provisions of the Code of Iowa it is clear that, if the case had remained in the state court, a judgment might have been obtained against Armour & Co. as a partnership, upon which an execution could have been levied upon the firm property, if any such could be found within the state of Iowa, provided the service of the notice upon W. A. Moon was a service upon the firm. It is equally clear that a judgment thus rendered against the firm in the partnership name, upon a service made upon an agent of the firm, would not be binding upon the individuals composing the firm. Thus, in Goldey v. Morning News, 156 U. S. 518, 15 Sup. Ct. 559, 39 L. Ed. 517, it is said that: “It is an elementary principle of jurisprudence that a court of justice cannot ¿cquire jurisdiction over the person of one who has no residence within its territorial jurisdiction, except by actual service, of notice within the jurisdiction upon him or upon some one authorized to accept service in his behalf, or by his waiver, by general appearance or otherwise, of the want of due service.” See, also, Boswell’s Lessee v. Otis, 9 How. 336, 13 L. Ed. 164; Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565; Hart v. Sansom, 110 U. S. 151, 3 Sup. Ct. 586, 28 L. Ed. 101; Arndt v. Griggs, 134 U. S. 316, 10 Sup. Ct. 557, 33 L. Ed. 918. In D’Arcy v. Ketchum, 11 How. 165, 13 L. Ed. 648, it was held that a judgment rendered in a state court in New York against several partners, only one having been served with process and appearing in the case, was not valid as against the partners not served with process; and in Hall v. Lanning, 91 U. S. 160, 23 L. Ed. 271, it was ruled that: “A member of a partnership residing in one state, not served with process and not appearing, is not personally bound by a judgment recovered in another state against all the partners after a dissolution of the firm, although the other members were served, or did appear and' cause an appearance to be entered for all, and although the law of the state where the suit was brought authorized such judgment.” Under the rule announced in these opinions, and as the case now stands before the court, there is not jurisdiction in this court over [533] the individuals composing the Ann of Armour & Co., for the reason that no service of notice or summons has been made upon them, and. as they are all nonresidents of Iowa, it does not seem possible to obtain service upon them within this state. It is, however, strongly contended on behalf of plaintiff that a general appearance has been entered in this court in such form as to preclude the defendants from contending that they are not properly within the jurisdiction of the court. This contention is based upon the fact that on May 15, 1900, after the transcript was filed in this court, a prmcipe was filed with the clerk in the following terms: “In United States Circuit Court, Northern District of Iowa. “The Italya Market Company, riaintiff, vs. Armour & Company, Defendants. “The clerk of said court will please enter our appearance for defendant in above cause. X. J. Mahoney, Omaha, Neh. “Kean & Sherman, Sioux City, Iowa.” When this appearance was thus entered, the only defendant in the case was Armour & Go., and in terms the appearance was for this defendant, and no other; and it cannot be construed to be an appearance for the individuals who were not made parties defendant until May 23d, when the amendment to the petition was filed. It is well settled by the decisions of the supreme court that an appearance made in the stale court for the purpose of seeming a removal to the federal court will not be deemed to have tbe effect of a general appearance, and will not constitute a waiver of the right to question the jurisdiction of the court over the parties or subject-matter of the suit. Goldey v. Morning News, 156 U. S. 518, 15 Sup. Ct. 559, 39 L. Ed. 517; Railway Co. v. Brow, 164 U. S. 271, 17 Sup. Ct. 126, 41 L. Ed. 431. So far as the individual partners composing the firm of Armour & Go. are concerned, they were not named as defendants to the suit until after its removal into this court; and as no service has been had upon them, and no appearance has been entered by them, tbe court cannot exercise jurisdiction over them, and they cannot be deemed to be parties defendant to tbe suit. This leaves as a defendant Armour <& Co., originally declared against as a corporation, but now admitted to be a'partnership. Under the provisions of tbe Code of Iowa, already cited, the state court could rightfully entertain a suit brought against a firm in the partnership name, and, service being had on the firm, could rightfully enforce its judgment against the firm property within the state of Iowa. The jurisdiction thus created by the statutes of the state against a firm in the partnership name cannot be recognized in the federal courts, for the reason that it cannot be averred of a firm that it is a citizen of a state. To establish the jurisdictional fact that the controversy is between citizens of different states, when diverse citizenship is tbe basis of the jurisdiction, it is necessary that tbe suit shall be brought in the names of the partners, the citizenship of each being shown. Carnegie, Phipps & Co. v. Hulbert, 3 C. C. A. 391, 53 Fed. 10; Chapman v. Barney, 129 U. S. 677, 9 Sup. Ct. 426, 32 L. Ed. 800; Hotel Co. v. Jones, 20 Sup. Ct. 690, Adv. S. U. S. 690, 44 L. Ed. -. On the face of the record as the same stood in the state court upon the filing of the petition for removal, it was shown that the defendant Armour & Go. was not a corporation, but was a partnership; [534] and in that form the case was not a removable one, for the reason that it was not an action of which this court could have taken jurisdiction originally, if brought in the first instance in this court. In other words, if the plaintiff had filed the action originally in this court against Armour & Co., a co-partnership, this court, under the rulings in the cases just cited, could not have entertained jurisdiction over the defendant firm, because citizenship, within the meaning of the federal constitution, cannot be predicated of a partnership. 'So long as the case stood, therefore, as a suit against the firm of Armour & Co., it was not removable into the federal court, for the reason that the second section of the act of congress of 1888, which creates the general right of removal, gives that right only in cases which, under the provisions of the first section of the act, would be within federal jurisdiction, and, as already pointed out, the suit against the firm in the firm name could not have been brought originally in a federal court. If the partners had applied to the state court to be substituted as defendants in place of the firm, so that the suit would then have been only against the individuals, partners doing business under the firm name, the casé might possibly .then have been removable, as it would have been then pending against the individuals only, and the citizenship of the defendants could then have been shown to be different from that of the plaintiff. This, however, was not done. The removal was asked in the name of Armour & Co. Thus, in the petition for removal it is averred as follows: (June 16, 1900.) “Your petitioner, Armour & Company, a co-partnership, but described in tlie petition and original notice in the above-entitled cause as a corporation, appears specially and for the sole and only purpose of this petition; * * * .that at the time of the commencement of this action the defendant was, and still is, a co-partnership, nonresident of the state of Iowa, and organized and existing under and by virtue of the laws of the state of Illinois, and a citizen of the state of Illinois.” The removal to this court was therefore asked by Armour & Co., a co-partnership; but, as already stated, it was not possible to show that the firm was a citizen of any state, and hence the proper showing, justifying a removal, could not be made on behalf of the only defendant before the state court, and the only party petitioning for a removal. Under the provisions of the Iowa Code, the state court could take jurisdiction of the suit against the partnership in the firm name, and, proper service being had, could render a judgment good against the firm property in Iowa. Over a suit in this form this court could not take jurisdiction for the reasons already stated, and, as this court could not entertain the suit for want of jurisdiction, it could not deprive the state court of the jurisdiction rightfully existing in that tribunal under the provisions of the state statute. Under these circumstances, this court has never had jurisdiction over this case, and any and all action taken herein must be held of no effect, and the suit must be remanded to the state court.