Central Trust Company v. McGeorge/Opinion of the Court

The court below, in holding that it did not have jurisdiction of the cause, and in dismissing the bill of complaint for that reason, acted in view of that clause of the act of March 3, 1887, as amended in August, 1888, which provides that 'no civil suit shall be brought in the circuit courts of the United States against any person, by any original process or proceeding, in any other district than that whereof he is an inhabitant;' and, undoubtedly, if the defendant company, which was sued in another district than that in which it had its domicile, had, by a proper plea or motion, sought to avail itself of the statutory exemption, the action of the court would have been right.

But the defendant company did not choose to plead that provision of the statute, but entered a general appearance, and joined with the complainant in its prayer for the appointment of a receiver, and thus was brought within the ruling of this court, so frequently made, that the exemption from being sued out of the district of its domicile is a personal privilege which may be waived, and which is waived by pleading to the merits.

In Ex parte Schollenberger, 96 U.S. 378, which arose under the judiciary act of 1875, it was said: 'The act of congress prescribing the place where a person may be sued is not one affecting the general jurisdiction of the courts. It is rather in the nature of a personal exemption in favor of a defendant, and it is one which he may waive. If the citizenship of the parties is sufficient, a defendant may consent to be sued anywhere he pleases, and certainly jurisdiction will not be ousted because he has consented.'

So, under the act of February 18, 1875, (18 Stat. 316,) which exempted national banks from suits in state courts in counties other than the county or city in which the bank was located, it was held, in Bank v. Morgan, 132 U.S. 141, 10 Sup. Ct. 37, that such exemption was a personal privilege, which could be waived by appearing to such a suit brought in another county, and making defense without claiming the immunity granted by congress.

Railway Co. v. McBride, 141 U.S. 127, 131, 11 Sup. Ct. 982, was a case wherein it was contended in this court that the court below-the circuit court of the United States for the western district of Arkansas-had no jurisdiction, because the suit was brought against a railway company whose domicile was in another state, and therefore within the operation of the judiciary act of 1887, as amended in 1888, providing that no suit shall be brought against any person in any other district than that whereof he is an inhabitant; but it was held (citing Ex parte Schollenberger, 96 U.S. 378, and Bank v. Morgan, 132 U.S. 141, 10 Sup. Ct. 37) that, 'without multiplying authorities on this question, it is obvious that the party who, in the first instance, appears and pleads to the merits, waives any right to challenge thereafter the jurisdiction of the court, on the ground that the suit had been brought in the wrong district.'

The court below based its ruling on Shaw v. Mining Co., 145 U.S. 444, 12 Sup. Ct. 935, and on Southern Pac. Co. v. Denton, 146 U.S. 202, 13 Sup. Ct. 44, and it is true that the right of a corporation to avail itself of the exempting clause of the act of 1887 was there maintained; but in both cases the defendants specially appeared and set up such right,-in the one case by a motion to set aside the service of the process, and in the other by a special demurrer.

The opinion in Shaw v. Mining Co. contains a full history of the legislation on this subject, and refers to the several questions that have arisen and been determined by this court under such legislation. The court, speaking through Mr. Justice Gray, said: 'The Quincy Mining Company, a corporation of Michigan, having appeared specially for the purpose of taking the objection that it could not be sued in the southern district of New York by a citizen of another state, there can be no question of waiver, such as has been recognized where a defendant has appeared generally in a suit between citizens of different states, brought in a wrong district. * *  * All that is now decided is that, under the existing act of congress, a corporation incorporated in one state, only, cannot be compelled to answer in a circuit court of the United States held in another state, in which it has a usual place of business, to a civil suit, at law or in equity, brought by a citizen of a different state.'

In Southern Pac. Co. v. Denton, where the subject was again elaborately discussed, it was said: 'It may be assumed that the exemption from being sued in any other district might be waived by the corporation by appearing generally, or by answering to the merits of the action, without first objecting to the jurisdiction;' and the case of Pailway Co. v. McBride, 141 U.S. 127, 11 Sup. Ct. 982, was cited to that effect.

The court below suggested that the present case is distinguishable from the others in which it was held that the right of exemption might be waived, in that neither the plaintiff nor the defendant resided in the district in which the suit was brought,-that is, the Mercantile Trust Company, the plaintiff, had its residence in New York, and the Virginia, Tennessee & Carolina Company, the defendant, was a corporation of New Jersey.

But a similar state of facts existed in the case of Shaw v. Mining Co., inasmuch as Shaw, the plaintiff, was a citizen of Massachusetts, and the mining company was a corporation of the state of Michigan, and the suit was brought in the circuit court for the southern district of New York. Nor do we see any reason for a different conclusion, as to the subject of waiver, when the question arises where neither of the parties is a resident of the district, from that reached where the defendant only is such resident.

It is scarcely necessary to say that, as the defendant company had submitted itself to the jurisdiction of the court, such voluntary action could not be overruled at the instance of stockholders and creditors not parties to the suit as brought, but who were permitted to become such by an intervening petition.

In view, then, of the authorities cited, and upon principle, we conclude that the court below erred in vacating the order appointing receivers and in dismissing the bill of complaint; and we reverse its decree to that effect, and remand the cause, with directions for further proceedigns not inconsistent with this opinion.