Simon v. Southern Railway Company

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 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 § 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 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 State 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.

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 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, 52 L. ed. 429, 28 Sup. Ct. Rep. 238, 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 the 'service upon the secretary of state' required by the statute.

The circuit court did not consider the question of fraud, but held (184 Fed. 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 (115 C. C. A. 58, 195 Fed. 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.

Messrs. Henry L. Lazarus, Herman Michel, Eldon S. Lazarus, David Sessler, and Girault Farrar for appellant.

Messrs. J. Blanc Monroe, Monte M. Lemann, and Alfred P. Thom for appellee.

Statement by Mr. Justice Lamar:

Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court: