Central Trust Co. v. McGeorge - 151 U.S. 129 (1894)


U.S. Supreme Court

Central Trust Co. v. McGeorge, 151 U.S. 129 (1894)

Central Trust Company v. McGeorge

No. 965

Submitted November 27, 1893

Decided January 3, 1894

151 U.S. 129

Syllabus

Exemption from being sued out of the district of its domicil is a privilege which a corporation may waive, and which is waived by pleading to the merits.

The fact that neither the plaintiff nor the defendant resides in the district in which the suit is brought do not prevent the operation of the waiver.

Page 151 U. S. 130

When a defendant corporation voluntarily submits itself to the jurisdiction of a circuit court of the United States, its action cannot be overruled at the instance of stockholders and creditors not parties to the suit so brought, but who were permitted to become parties by an intervening petition.

On the 8th day of August, 1892, the Central Trust Company, a corporation created by and existing under the laws of the State of New York, filed a bill in equity in the Circuit Court of the United States for the Western District of Virginia against the Virginia, Tennessee and Carolina Steel and Iron Company, created by and existing under the laws of the State of New Jersey.

The bill alleged that the defendant company had a place of business and carried on its business at Bristol, in the Western District of Virginia, and owned property, real and personal at Bristol, and elsewhere in the State of Virginia; that the said defendant company was insolvent; that the plaintiff company had obtained a judgment on the law side of the court on which an execution had been sued out and returned by the marshal nulla bona, and prayed for the appointment of a receiver. The defendant company appeared by its President, John C. Haskell, and consented to the appointment of a receiver, and thereupon Judge Bond made an order appointing said John C. Haskell and D. H. Conklin receivers of said defendant company.

On the same day, two other bills were filed in suits styled as follows: The Central Trust Company of New York v. The South Atlantic and Ohio Railroad Company," and "The Virginia, Tennessee and Carolina Steel and Iron Co. v. The Bristol Land Company.

In each of said additional bills, the complainant company alleged the insolvency of the defendant company, as evidenced by a judgment obtained against it by confession in the court on its law side, on which an execution had issued and been returned on the same day as nulla bona. In the first-named of these last two suits, the defendant company appeared by its vice-President, John C. Haskell, and consented that a receiver should be appointed, and in the last-named suit the

Page 151 U. S. 131

defendant company appeared by its president, John C. Haskell, and consented to the appointment of a receiver, and thereupon Judge Bond appointed said John C. Haskell and D. H. Conklin receivers of each of said companies, respectively.

On the 19th day of October, 1892, a petition was presented to the circuit court by William McGeorge and others, claiming to be stockholders and creditors of the Virginia, Tennessee and Carolina Steel and Iron Company, and John M. Bailey, claiming to be the "valid receiver" of the corporations named, by virtue of an order made by Hon. D. W. Bolen, Judge of the Fifteenth Judicial Circuit of Virginia, in vacation, on the 6th day of August, 1890, asking that they might be made parties complainants or defendants, as the court might determine, and that the several causes named might be consolidated and heard together. The petition further alleged that the Virginia, Tennessee and Carolina Steel and Iron Company was the main and substantial company; that the South Atlantic and Ohio Railroad Company and the Bristol Land Company were mere offshoots or dependent companies; that the several confessions of judgments entered in the court on the 8th day of August, 1892, were made by a person who had no power or authority to make such confessions of judgment; that said judgments were procured by fraud and collusion between the representatives, respectively, of the complainant and defendant companies, and that the orders made by Judge Bond appointing receivers for each of said defendant companies were obtained by misrepresentation, fraud, and collusion by and between said representatives of the complainant and defendant companies. The said petition further alleged that in the cause of The Central Trust Company of New York v. The Virginia, Tennessee and Carolina Steel and Iron Company the court was without jurisdiction, for the reason that the complainant company was a corporation created by and existing under the laws of the State of New York, and a citizen and resident of said State of New York, and that the defendant company was a corporation created by and existing under the laws of the State of New Jersey, and a citizen and resident of said State of New Jersey.

Page 151 U. S. 132

The said petition was filed by leave of the court, and a rule was awarded, returnable on the 6th day of December, 1892.

The complainant company, the Central Trust Company of New York, filed an elaborate answer to said petition denying under oath its material allegations. The defendant company, the Virginia, Tennessee and Carolina Company, filed a separate answer to the said petition denying its allegations, as did also the other two defendant companies.

On the 16th day of May, 1893, the district judge filed an opinion and decree declining to consolidate the said cases and treating the petition of McGeorge and others as the answer of codefendants. The court decided that it had no jurisdiction, because while the parties complainant and defendant were citizens of different states, yet neither of them was a citizen of the state in which the suit was brought. The order appointing the receivers was accordingly vacated, and the bill of complaint dismissed. 55 F. 769. From this decree, an appeal was taken and allowed to this Court.



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