A suit in the district court to enjoin the defendant from
further prosecuting a suit against the plaintiff in a state court,
upon the ground that the process served in the state court was void
and was not due process of law within the meaning of the Fourteenth
Amendment, is forbidden by Jud.Code § 265. (Rev.Stats. § 720). P.
258 U. S.
360.
264 F. 959 affirmed.
Appeal from a decree of the circuit court of appeals affirming a
decree of the district court which dismissed the bill in a suit
brought by the appellant to restrain the appellee from prosecuting
an action in a state court.
MR. JUSTICE PITNEY delivered the opinion of the Court.
The appellee, William R. Kane, a citizen and resident of New
Jersey, having in the year 1917 commenced in the supreme court of
that state an action at law against appellant, a corporation of
Illinois, seeking recovery of $20,000 damages for conversion of
certain personal property, and having sought to acquire
jurisdiction over defendant
in personam by service of the
summons and complaint upon the secretary of state under a statute
that made him the proper official to be served in the absence of a
person designated by the company itself in the year 1910 as its
agent upon whom process against the corporation might be served,
and appellee having proceeded in the action to the extent of
causing an interlocutory judgment to be entered against the
company
Page 258 U. S. 359
in default of its appearance to answer the complaint, and being
thereupon entitled under the state practice, in the absence of
objection, to take further proceedings and through an assessment of
damages to procure a final judgment, appellant brought this suit in
equity in the United States District Court for New Jersey, praying
an injunction to restrain further prosecution of the action at law
by appellee, upon the ground that his alleged cause of action, if
any, arose outside the state; that appellant did not then or at any
time transact business within the state; that it had designated an
office and named a local representative in 1910, and made a proper
statement to enable it lawfully to transact business in that state
in compliance with the state law, for a temporary purpose which had
expired; that, while such agency for receipt of process against
appellant continued, it related only to actions arising out of
business transacted in the state; that the attempted service of
process upon the secretary of state, as appellant's agent, was void
and of no effect, and was not due process of law within the meaning
of the Fourteenth Amendment, and that appellee's threatened
prosecution of his suit to final judgment would result in a taking
of appellant's property without due process of law, to its
irremediable injury.
Appellee answered, alleging in substance (among other things)
that he had a good cause of action arising out of a conversion of
personalty entrusted to appellant in the course of business
transacted by it; that appellant had made itself subject to the
laws of New Jersey by voluntarily filing a certificate enabling it
to transact business in that state, and could not limit the effect
of such filing, and that, under the laws of that state, the service
of the summons and complaint upon the secretary of state was good
service and conferred upon the supreme court jurisdiction over
appellant.
Page 258 U. S. 360
The cause came on for final hearing upon the bill and answer and
a stipulation of the parties that the matters set forth in those
pleadings should be taken as the facts in the case, whereupon the
district court held that the proceedings in the state court were
within the letter and spirit of the prohibition of § 265, Judicial
Code, which reenacted § 720, Rev.Stats.:
"The writ of injunction shall not be granted by any court of the
United States to stay proceedings in any court of a state, except
in cases where such injunction may be authorized by any law
relating to proceedings in bankruptcy.
See 256 F. 271. The
Circuit Court of appeals affirmed the decision upon the same
ground, 264 F. 959, and an appeal brings the case here."
In this Court, as in the courts below, appellant's chief
reliance is upon
Simon v. Southern Railway, 236 U.
S. 115. Without intimating that in other respects the
cases are parallel, it is a sufficient ground of distinction that
this is an attempt to use the process of the federal court to
restrain further prosecution of an action still pending in a state
court, while that cited was a case of enjoining a successful
litigant from enforcing a final judgment of a state court held void
because procured without due process. As was pointed out in that
case, pp.
236 U. S. 123
et seq., the prohibition originated in the Act of Congress
of March 2, 1793, c. 22, 1 Stat. 334, § 5, was based upon
principles of comity, and designed to avoid inevitable and
irritating conflicts of jurisdiction. But when the litigation in
the state court has come to an end and final judgment has been
obtained, the question whether the successful party should in
equity be debarred from enforcing the judgment, either because of
his fraud or for the want of due process of law in acquiring
jurisdiction, is a different question, which may be passed upon by
a federal court with out the conflict which it was the purpose of
the Act of 1793 to avoid.
Page 258 U. S. 361
That appellant objection to the action sought to be restrained
rests upon a fundamental ground, and one based upon a provision of
the Constitution of the United States, does not render the effort
to stay proceedings in the state court any the less inconsistent
with § 265 Judicial Code. That section would be of little force did
it not apply to cases where, save for its prohibition, good ground
would exist for enjoining the prosecution of a pending suit. And,
as to the federal question involved, Congress at all times,
commencing with the first Judiciary Act (September 24, 1789, c. 20,
§ 25, 1 Stat. 73, 85), has maintained upon the statute book such
provisions as it deemed needful for reviewing judicial proceedings
in the state courts involving a denial of federal rights, but has
confined them to a direct review by this Court, and deferred this
until final judgment or decree in the state court of last resort.
At the same time, since 1793, the prohibition of the use of
injunction from a federal court to stay proceedings in a state
court has been maintained continuously, and has been consistently
upheld.
Hull v. Burr, 234 U. S. 712,
234 U. S. 723,
and cases cited. In exceptional instances, the letter has been
departed from while the spirit of the prohibition has been
observed; for example, in cases holding that, in order to maintain
the jurisdiction of a federal court properly invoked, and render
its judgments and decrees effectual, proceedings in a state court
which would defeat or impair such jurisdiction may be enjoined.
French v. Hay,
22 Wall. 250;
Dietzsch v. Huidekoper, 103 U.
S. 494,
103 U. S. 497;
Julian v. Central Trust Co., 193 U. S.
93,
193 U. S. 112;
Traction Co. v. Mining Co., 196 U.
S. 239,
196 U. S. 245;
Looney v. Eastern Texas R. Co., 247 U.
S. 214,
247 U. S. 221. The
effect of this, as will be observed, is but to enforce the same
freedom from interference on the one hand that it is the prime
object of § 265 to require on the other.
Besides a challenge of the jurisdiction of the state court for
want of due process over defendant
in personam, to be
Page 258 U. S. 362
interposed in that court, and, if overruled, followed by
invoking the revisory jurisdiction of this Court, the final
judgment may be questioned collaterally, if in truth there be a
want of due process, either defensively, as in
Pennoyer v.
Neff, 95 U. S. 714,
95 U. S.
723-733;
see also York v. Texas, 137 U. S.
15,
137 U. S. 20-21;
Western Indemnity Co. v. Rupp, 235 U.
S. 261,
235 U. S. 273;
Baker v. Baker, Eccles & Co., 242 U.
S. 394,
242 U. S.
401-403; or by adopting the more aggressive method
pursued in
Simon v. Southern Railway, supra. See also
Wells Fargo & Co. v. Taylor, 254 U.
S. 175,
254 U. S.
183-185. In short, observance by the federal courts,
towards litigants in the state courts, of the comity prescribed by
§ 265, requires orderly procedure but involves no impairment of the
substance of constitutional right.
The case before us presents no exceptional feature, and the
courts below correctly disposed of it.
Decree affirmed.