United States courts, by virtue of their general equity powers,
have jurisdiction to enjoin the enforcement of a judgment obtained
by fraud or without service.
In the absence of service of process, a person named as
defendant can no more be regarded as a party than any other member
of the community.
A judgment against a person on whom no process has been served
is not erroneous and voidable, but, upon principles of natural
justice and also under the due process clause of the Fourteenth
Amendment, is absolutely void.
Jurisdiction of the United States courts cannot be lessened or
increased by state statutes regulating venue or establishing rules
of procedure. While § 720, Rev.Stat., 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 from enjoining a party from using that which he calls
a judgment but which is, in
Page 236 U. S. 116
fact and in law, a mere nullity and absolutely void for lack of
service of process.
Marshall v. Holmes, 141 U.
S. 589.
This rule obtains whether the case was one removed from the
state court to, or originally commenced in, the federal court.
The broader the ground of a decision, the more likelihood there
is of affecting interests of persons not before the court, and
therefore this Court refrains from passing upon propositions not
necessary to the decision of the case, although passed upon by the
courts below.
Quaere whether the acts of the foreign corporation
against whom judgment was entered amounted to doing business within
the state.
Quaere whether, under the statute of Louisiana
providing for service of process on foreign corporations doing
business within the state, but who have not appointed an agent
therein, by service upon the Secretary of State, service upon the
Assistant Secretary is sufficient in the absence of the
Secretary.
Quaere whether the state court has jurisdiction of a
suit on a transitory cause of action against a foreign corporation
arising in another state, based on service of process on an agent
voluntarily appointed by such corporation.
A state may by statute require a foreign corporation doing
business therein to designate agents upon whom service may be made,
or in default of its so doing, to provide upon whom such service
may be made in suits relating to business transacted therein, but
such statutory requirements cannot extend to causes of action
arising in other states.
Service of process, in a suit against a foreign corporation who
has not appointed a resident agent, upon the Secretary of State
under the Louisiana statute providing for such service is not
sufficient to give the court jurisdiction of a suit based on a
cause of action arising in another state, and judgment entered
thereon by default is absolutely void, and enforcement thereof,
other jurisdictional facts existing, can be enjoined by the federal
court.
195 F. 56 affirmed.
This appeal raises a question of the power of a United States
court to enjoin the appellant, Ephraim Simon, from enforcing a
judgment alleged to have been fraudulently obtained by him in a
state court in a suit against the Southern Railway. The company had
no notice that the suit had been brought, other than that arising
from the service, which purported to have been made in pursuance of
the Louisiana Act No. 54, which provides (§ 1) that it
shall
Page 236 U. S. 117
be the duty of every foreign corporation doing any business in
this state to file a written declaration setting forth the places
in the state where it is doing business, and the name of its
"agents in this state upon whom process may be served."
"Section 2. -- Whenever any such corporation shall do any
business of any nature in the state without having complied with
the requirements of Sec. 1 of this act, it may be sued for any
legal cause of action in any parish of the state where it may do
business, and such service of process in such suit may be made upon
the secretary of state the same and with the same validity as if
such corporation had been personally served."
Availing himself of the provisions of this statute, Ephraim
Simon, on December 1, 1904, brought suit, in the Civil District
Court for the Parish of Orleans, against the Southern Railway
Company, averring that the defendant was a Virginia corporation
"doing business in the City of New Orleans." The petition alleged
that Simon, a New Orleans merchant and manufacturer, purchased, on
February 8, 1904, a ticket from Selma, Alabama, to Meridian,
Mississippi, and while riding over its lines, through the
negligence of defendant, a collision occurred in which were
inflicted upon him great personal injuries and financial loss. The
petitioner claimed as damages $5,000 for personal injury; $340 for
medical expenses; $4,000 for loss of profit that he would have
earned; $3,000 for deterioration in the stock while he was confined
to his bed and unable to sell, and $1,000 for increased cost of
manufacture due to his absence from business.
There was a prayer that the company be cited to appear and
answer, and,
"it having failed to comply with the provisions of § 1 of
Act No. 54 of the Session of 1904, that service of process in this
suit be made upon Hon. John T. Michel, Secretary of State, said
service, so made, to be a service upon the said Southern
Railway
Page 236 U. S. 118
Company, as provided for in the act aforesaid."
The plaintiff asked for judgment for $13,348.
The summons was directed to "the Southern Railway Company,
through Hon. John T. Michel, Secretary of Louisiana, New Orleans,"
and required the defendant to answer within ten days after service.
The deputy sheriff on December 3, 1904, made return that he had
served the citation and petition
"on the within named Southern Railway Company in the Parish of
East Baton Rouge, State of Louisiana, by personal service on E. J.
McGivney, Assistant Secretary of State, Jno. T. Michel, Secretary
of State, being absent at the time of service."
The Assistant Secretary of State, acting under the instructions
of the Attorney General, filed the citation and petition in his
office.
No notice, however, was given to the Southern Railway of the
service of the citation or of the fact that suit had been brought.
It therefore made no appearance in the suit brought against it by
Simon, and, on January 10, 1905, the court, on motion of the
plaintiff, ordered that judgment by default be entered against the
railway company. Under the Louisiana practice, the case was
thereafter submitted to a "trial by jury on confirmation of
default." The plaintiff himself testified and other witnesses were
examined, and on January 16 the jury returned a verdict in favor of
the plaintiff for $13,348, -- being the exact amount claimed in the
petition. On January 20 the court, considering "the verdict of the
jury in the matter, and that the demand of the plaintiff was
proved, the law and the evidence being in favor of said plaintiff,"
entered judgment on the verdict.
Thereafter the company learned of the existence of the judgment,
and averring itself to be a citizen of Virginia, filed (February 6,
1905) in the United States Circuit Court for the District of
Louisiana a bill against Simon, a citizen of Louisiana, asking that
he be perpetually enjoined from enforcing the same.
Page 236 U. S. 119
The bill attached, as an exhibit, a copy of the record in the
state court, and alleged that, in the collision referred to, Simon
had received injuries which a surgeon had reported were slight;
that the company had offered him $350 in settlement. Simon refused
to accept this sum, but considered and discussed the acceptance of
$750, which, however, was not agreed to by the defendant; the
matter was temporarily left in abeyance, it being understood that
negotiations were still pending and would probably result in an
agreement of settlement. It was alleged that thereafter the
plaintiff surreptitiously and without the knowledge of the railway
company entered suit for $13,348, "falsely and fraudulently
pretending that he had been injured in that sum;" that Simon's
personal injuries were slight, as shown by the report of the
surgeon; that the claim for loss of profit on stock and the extra
cost of manufacturing stock were claims that he well knew were
fraudulent, fictitious, and utterly untrue; but by false testimony
he secured a verdict therefor.
The bill further alleged that the Southern Railway was not doing
business in the State of Louisiana; that the service upon the
secretary or Assistant Secretary of State was not a citation upon
the railway company, and was null and void for the purpose of
bringing it under the jurisdiction of the civil district court;
that any judgment rendered upon such attempted citation would be,
if rendered without appearance of the defendant, a judgment without
due process of law and in violation of the Constitution; that the
railway company had never received the citation issued in the suit,
nor was it advised, nor had it any knowledge, of the pendency of
said proceedings until after the rendition of the judgment; that
the verdict of the jury having been rendered upon false testimony
and without notice, it would be against good conscience to allow
the judgment thereon to be enforced against the railway company,
which has
Page 236 U. S. 120
no remedy at law in the premises, and has a complete meritorious
defense to the claim on which the judgment is based; that, by fraud
and accident, unmixed with its own negligence, the railway company
has been prevented from making such defense.
As stated in
Ex Parte Simon, 208 U.
S. 144, on another branch of this case:
"The bill further alleges that Simon will attempt to collect the
fraudulent judgment by
fieri facias, and prays as specific
relief an injunction against his further proceeding under the same.
A preliminary injunction was issued, after a hearing on affidavits,
on June 30, 1905, and Simon appears to have obeyed the order for
over two years. A demurrer to the bill was overruled in December,
1906, and a plea to the jurisdiction, filed in February, 1907, was
overruled in the following May. Simon answered in August, and issue
was joined in the same month. Notwithstanding the injunction,
Simon, in contempt therefor, obtained a writ of
fieri
facias and directed a levy and the service of garnishment
process to collect the judgment. . . . The punishment was a small
fine, and the imprisonment was ordered until the fine was
paid."
In habeas corpus proceedings instituted in this Court, he sought
to be discharged from the sentence of imprisonment imposed in the
contempt case, claiming that, under Revised Statutes, § 720,
the circuit court was without jurisdiction to grant the injunction,
and therefore the order in the contempt proceedings was absolutely
void. The writ was denied.
After this Court refused to grant the writ of habeas corpus the
case, on the main bill, was referred to a master to hear evidence
and to report his conclusions of law and facts. He found that the
railway was not doing business in Louisiana in the sense of the
statute; that the judgment was not fraudulent, but held it to be
void because service upon the assistant secretary of state was
not
Page 236 U. S. 121
the "service upon the secretary of state" required by the
statute.
The circuit court did not consider the question of fraud, but
held (184 F. 959) that the state judgment was void because the
Louisiana statute providing for service on foreign corporations was
unconstitutional. It thereupon entered a permanent injunction
against Simon as prayed for in the bill. From that decree, Simon
appealed, making many assignments of error, attacking the
jurisdiction of the court to entertain the bill, and especially
denying its power to grant the relief prayed for in view of the
provisions of § 720 of the Revised Statutes. The circuit court
of appeals held (195 F. 56) that it had been authoritatively
decided in
Ex Parte Simon, supra, that the circuit court
had jurisdiction. It found that the railway company was doing
business in New Orleans, but ruled that Act 54 did not provide for
service on the Assistant Secretary of State, and hence that the
judgment by default in the state court was void for want of
jurisdiction of the person of the defendant. The decree of the
circuit court was affirmed, and thereupon Simon prosecuted the
present appeal.
MR. JUSTICE LAMAR, after making the foregoing statement,
delivered the opinion of the Court.
The primary question whether the United States court had
jurisdiction of the case must, of course, be determined by
considering the allegations of the bill. It shows
Page 236 U. S. 122
diversity of citizenship, and charges that Simon was seeking to
enforce by levy a judgment obtained by fraud and without notice to
the railway company. If that be so, the United States courts, by
virtue of their general equity powers, had jurisdiction to enjoin
the plaintiff from enforcing a judgment thus doubly void. For even
where there has been process and service, if the court "finds that
the parties have been guilty of fraud in obtaining a judgment . . .
it will deprive them of the benefit of it."
McDaniel v.
Traylor, 196 U. S. 415,
196 U. S. 423.
Much more so will equity enjoin parties from enforcing those
obtained without service. For in such a case, the person named as
defendant "can no more be regarded as a party than any other member
of the community." Such judgments are not erroneous and not
voidable, but, upon principles of natural justice, and under the
due process clause of the Fourteenth Amendment, are absolutely
void. They constitute no justification to a plaintiff who, if
concerned in executing such judgments, is considered in law as a
mere trespasser.
Harris v.
Hardeman, 14 How. 339 (default judgment entered on
improper service);
Williamson v.
Berry, 8 How. 541;
Scott v. McNeal,
154 U. S. 46;
Western Indemnity Co. v. Rupp, 235
U. S. 273.
On principle and authority, therefore, a judgment obtained in a
suit of which the defendant had no notice was a nullity, and the
party against whom it was obtained was entitled to relief. It
serves to illustrate the existence of appellee's right and the
method of its enforcement to note that, under the law of Louisiana
the railway company was not obliged to attack a void judgment in
the court that rendered it, but, in a court having jurisdiction of
the plaintiff's person, could have instituted a new and independent
proceeding to enjoin Simon from enforcing it.
See Sheriff v.
Judge, 46 La.Ann. 29, where a suit was brought in the 21st
District Court to enjoin the enforcement of a void judgment
obtained in the 17th District
Page 236 U. S. 123
Court.
See also Hibernia Bank v. Standard Guana Co., 1
La.Ann. 1321. Of course, the jurisdiction of the United States
courts could not be lessened or increased by state statutes
regulating venue or establishing rules of procedure. But,
manifestly, if a new and independent suit could have been brought
in a state court to enjoin Simon from enforcing this judgment, a
like new and independent suit could have been brought for a like
purpose in a federal court, which was then bound to act within its
jurisdiction and afford redress (
Hyde
v. Stone, 20 How. 175;
Reagan v. Farmers' Trust
Co., 154 U. S. 391;
Payne v.
Hook, 7 Wall. 429). The United States courts could
not stay original or supplementary proceedings in a state court
(
Mutual Reserve v. Phelps, 190
U. S. 159), or revise its judgment. But, by virtue of
their general equity jurisdiction, they could enjoin a party from
enforcing a void judgment.
2. The appellant, Simon, however, contends that, even if there
was equity in the bill, and even if the railway company could have
brought a new and independent suit in the state court to enjoin him
from using the judgment, yet, in the present case, the federal
court was without power to afford the same relief, because §
720 of the Revised Statutes provides that, except in bankruptcy
cases, a United States court shall not "stay proceedings in any
court of a state."
In 1793, when that statute was adopted (1 Stat. 334, c. 22),
courts of equity had a well recognized power to issue writs of
injunction to stay proceedings pending in court, in order to avoid
a multiplicity of suits, to enable the defendant to avail himself
of equitable defenses, and the like. It was also true that the
courts of equity of one state or country could enjoin its own
citizens from prosecuting suits in another state or country.
Cole v. Cunningham, 133 U. S. 107.
This, of course, often gave rise to irritating controversies
between the courts themselves,
Page 236 U. S. 124
which could, and sometimes did, issue contradictory
injunctions.
On principles of comity and to avoid such inevitable conflicts,
the Act of 1793 was passed.
Diggs v.
Wolcott, 4 Cranch 179,
8
U. S. 180 (1807), and
Hull v. Burr,
234 U. S. 712
(1914), (the first and last cases in this Court dealing with that
question), furnish typical instances in which the statute has been
applied. Those decisions, and the authorities therein cited, show
that, although the facts might have been such as to warrant an
injunction against a suit then pending in a state court, yet §
720 prevented the federal court from staying the proceedings in the
state court.
3. But when the litigation has ended and a final judgment has
been obtained, and when the plaintiff endeavors to use such
judgment, a new state of facts, not within the language of the
statute, may arise. In the nature of the case, however, there are
few decisions dealing with such a question. For where the state
court had jurisdiction of the person and subject matter, the
judgment rendered in the suit would be binding on the parties until
reversed, and there would therefore usually be no equity in a bill
in a federal court seeking an injunction against the enforcement of
a state judgment thus binding between the parties.
See Marshall
v. Holmes, 141 U. S. 600,
where
Nougue v. Clapp, 101 U. S. 551,
relied on by appellant, is discussed.
There have, however, been a few cases in which there was equity
in the bill brought to enjoin the plaintiff from enforcing the
state judgment, and where that equity was found to exist
appropriate relief has been granted. For example, in
Julian v.
Central Trust Co., 193 U. S. 112,
a judgment was obtained in a state court, execution thereon was
levied on property which, while not in possession of the federal
court, was in possession of a purchaser who held under the
conditions of a federal decree. It
Page 236 U. S. 125
was held that the existence of that equity authorized an
injunction to prevent the plaintiff from improperly enforcing his
judgment, even though it may have been perfectly valid in
itself.
Other cases might be cited involving the same principle. But
this is sufficient to show that if, in a proper case, the plaintiff
holding a valid state judgment can be enjoined by the United States
court from its inequitable use, by so much the more can the federal
courts enjoin him from using that which purports to be a judgment,
but is, in fact an absolute nullity.
Marshall v. Holmes,
141 U. S. 597;
Gaines v. Fuentes, 92 U. S. 10;
Barrow v. Hunton, 99 U. S. 85.
That the United States circuit court here could enjoin Simon
from enforcing a void judgment against the Southern Railway Company
has already been ruled in another branch of this very case. In
habeas corpus proceedings (
Ex Parte Simon, 208 U.
S. 144), he sought relief from the punishment imposed
because of his violation of the temporary injunction granted in
this cause. He there claimed that the attachment for contempt was
void because the court was without power to issue the injunction
which he had violated. On that subject, this Court said:
"This is not a suit
coram non judice and wholly void by
reason of Rev.Stat. § 720, forbidding United States courts to
stay by injunction proceedings in any state court. The circuit
court had jurisdiction of the cause. That must be assumed at this
stage, and finally unless we overrule the strong intimations in
Marshall v. Holmes, 141 U. S. 589, and the earlier
cases cited in that case."
The appellant insists, however, that
Marshall v.
Holmes, referred to as conclusive unless overruled, does not
support the jurisdiction of the circuit court, because there no
injunction was granted by the United States court.
In that case, Mrs. Marshall brought a suit, in a Louisiana
court, and obtained a temporary injunction restraining
Page 236 U. S. 126
Holmes, sheriff, from levying Mayer's judgments, alleged to be
fraudulent. Her petition for removal to the United States court was
denied, and the case proceeded to final hearing in the state court,
where the temporary injunction was dissolved. That decree was
affirmed by the Supreme Court of Louisiana. The case was then
brought here to review the order refusing to allow the case to be
removed to the federal court. In discussing that issue, the
appellee contended that
"it was not competent for the circuit court of the United
States, by any form of decree, to deprive Mayer of the benefit of
his judgment at law, and that Mrs. Marshall could obtain the relief
asked only in the court in which the judgment had been
rendered."
In considering that contention (which is substantially the same
as that urged by the appellant Simon here), the court asked
"whether, where the requisite diversity of citizenship existed,
the circuit court of the United States could not deprive a party of
the benefit of a judgment fraudulently obtained by him in a state
court."
In answering this question, the court pointed out the difference
between enjoining a court and enjoining a party, and the difference
between setting aside a judgment for irregularity and setting it
aside for fraud. It was held that the case was removable since,
there being diversity of citizenship, the circuit court of the
United States had jurisdiction to award Mrs. Marshall protection by
preventing the plaintiff from enforcing his judgments if they were
found to be fraudulent in fact, saying that the
"Authorities would seem to place beyond question the
jurisdiction of the circuit court to take cognizance of the present
suit, which is nonetheless an original, independent suit because it
relates to judgments obtained in the court of another jurisdiction.
While it cannot require the state court itself to set aside or
vacate the judgment in question, it may, as between the parties
before it, if the facts justify such relief, adjudge that Mayer
shall
Page 236 U. S. 127
not enjoy the inequitable advantage obtained by his judgments. A
decree to that effect would operate directly upon him, and would
not contravene that provision of the statute prohibiting a court of
the United States from granting a writ of injunction to stay
proceedings in a state court. It would simply take from him the
benefit of judgments obtained by fraud."
And if a United States court can enjoin a plaintiff from using a
judgment, proved to be fraudulent, it can likewise enjoin him from
using a judgment absolutely void for want of service.
4. The appellant, Simon, further contends that
Marshall v.
Holmes is not applicable here, because that was a removal
case, and it is urged that, even if a federal court can grant an
injunction in a case removed, it cannot award the same relief in a
bill originally brought in the federal court. But that is a clear
case of distinction without a difference, and was not the basis of
the decision.
Indeed, (excluding ancillary bills,
Madisonville Traction
Co. v. Mining Company, 196 U. S.
245), it seems always to have been assumed that the
prohibition of § 720 applied to cases removed to the United
States courts, as well as to those originally instituted therein.
Such was true in
Diggs v.
Wolcott, 4 Cranch 179, the first reported case
arising under the law. There, a bill in chancery was filed in a
Connecticut court to enjoin a suit then pending in a Connecticut
court. The case was removed to the United States circuit court, and
after removal, the injunction was granted. On appeal, the decree
was reversed on the ground that a United States court could not
(even on removal) "stay proceedings in a state court." In later
decisions, it has been pointed out that if there was a difference
between cases brought and those removed, it would have been easy,
as the law then stood, for the nonresident to bring a suit for
injunction in a state court, remove it to the federal court, secure
therein the injunction sought, and thus evade
Page 236 U. S. 128
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 F. 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 doing
business within the State of Louisiana, that there had been no
fraud in the procurement of the judgment, but 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
Page 236 U. S. 129
the district court of the Parish of Orleans. The circuit court
made no finding on the question of fraud, but ruled (184 F. 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 is quoted at
length a statement of the Supreme Court of Louisiana in
Gouner
v. Missouri Valley Bridge Co., 123 La. 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 domicil. 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 F. 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
Page 236 U. S. 130
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, put the decision here on the special fact,
relied on in the court below, that in this case, the cause of
action arising within the State of Alabama, and the suit therefor,
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
extraterritorial 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
Page 236 U. S. 131
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 the state"
(p. 18). The Old Wayne Life Association, having executed and
delivered, in Indiana, a policy of insurance on the life of a
citizen of Pennsylvania (p. 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's 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 commission 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 [p.
204 U. S.
21]. . . . Conceding, then, that, by going into
Pennsylvania without first complying with its statute, the
defendant association may be held to have assented to the service
upon the insurance commissioner of process in a suit brought
against it there in respect of business transacted by it
Page 236 U. S. 132
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 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
Affirmed.
