G. & C. Merriam Co. v. Saalfield

delivered the opinion of the court!

This is a direct appeal from the District Court under § 238, Jud. Code, upon the sole question of the jurisdiction

The facts are as follows: In December 1908, appellant filed its original bill against Saalfield in the then Circuit Court of the United States for the Northern District of Ohio, for relief against unfair competition in the business of pubfishing and selling dictionaries. Saalfield was duly served with process, appeared, and made defense. The Circuit Court having dismissed the bill, the Circuit Court of Appeals reversed the decree ( 190 Fed. Rep. 927 ; 198 Fed. Rep. 369 ), and remanded the cause with direction for an injunction and an accounting in conformity with its opinion. The District Court made a decree 'in accordance with the mandate September 11, 1912, with an order of reference for the accounting. Thereafter and on December 16, 1912, the supplemental bill was filed, setting up in substance that since the entry of the decree of September 11 complainant had discovered, and it charged the fact to be, that Ogilvie had from the beginning actively conducted, controlled, and directed the defense of the suit, having selected, retained, and paid, as solicitors and counsel for defendant Saalfield, the firm of Weed, Miller and Nason, of Cleveland, Ohio, and Mr. George F. Bean, of Boston, Massachusetts, who, in pursuance of said retainer, appeared on behalf of Saalfield, but acted for and under instructions of Ogilvie; that in fact Ogilvie was the proprietor of the dictionaries involved in the suit, which were published and sold for his benefit and profit by Saalfield under a contract proyiding for the payment of royalties to Ogilvie; that pending the suit Saalfield had

Upon the fifing of the supplemental bill and an affidavit setting forth that Ogilvie was a non-resident of the Northern District.of Ohio, and that as alleged in the supplemental bill the firm of Weed, Miller and Nason, of Cleveland, and George F. Bean, of Boston, Massachusetts, who had appeared respectively as solicitors and counsel for defendant Saalfield in the defense of the suit, were in fact retained and employed by Ogilvie for that purpose and paid by him and acted under his instructions and directions, complainant moved for and obtained an order authorizing substituted service of process against Ogilvie, to be made within the District upon the Cleveland attorneys, and in the District of Massachusetts upon George F. Bean. Service was made accordingly, and the process returned; and it appearing from an affidavit made by defendant, Ogilvie, and filed in the cause on February 22, 1913, that he had had actual notice of the supplemental bill, an interlocutory decree pro confesso was entered, and this was followed, on October 16, 1913, by a final decree for the recovery against him of profits amounting with interest to $81,312.78, besides costs. Thereafter Ogilvie, by solicitors appearing specially for the purpose, moved to quash the service of the writ of subpoena issued against him and to set aside all proceedings based thereon. The District Court, having heard testimony, granted the

There is a motion to dismiss, based upon the familiar ground that the “jurisdiction of the court” referred to in § 238, Jud. Code, mea,ns its jurisdiction as a Federal court, and-not its general jurisdiction as a judicial tribunal; the insistence being that the contention of complainant below presented no more than a general question of procedure in equity,: and not one peculiar to the District Court as a Federal court. But the distinction referred to bears upon the nature of the jurisdiction exercised or refused to be exercised after a valid service of process upon the defendant, and does not affect the question whether the court has acquired jurisdiction over the person, which is the one here involved. This question may be reviewed on direct appeal. Shepard v. Adams, 168 U. S. 618 , 623; Remington v. Cent. Pac. R. R., 198 U. S. 95 , 99; Board of Trade v. Hammond Elevator Co., 198 U. S. 424 , 434; Commercial Accident Co. v. Davis, 213 U. S. 245 , 256; Mechanical Appliance Co. v. Castleman, 215 U. S. 437 , 440; Herndon-Carter Co. v. Norris & Co., 224 U. S. 496 , 498. In Bache v. Hunt, 193 U. S. 523 , the decision that was held not reviewable on direct appeal was rendered upon a plea to the jurisdiction of the court over the subject-matter. In Courtney v. Pradt, 196 U. S. 89 , the suit had been removed from a Kentucky state court to the United States Circuit Court, where Pradt filed a special demurrer, assigning as causes that the court had not jurisdiction of the person or of the subject-matter. The court dismissed the suit for want of jurisdiction, and it appeared from its opinion that this was done because Pradt, who was sued as executor, was appointed as such in Wisconsin, and a suit against a Wis

Appellant’s, case upon the merits is rested upon the theory that Ogilvie was privy to the original suit- against Saalfield, and an actual though not an ostensible party thereto, in such a real sense that the final decree therein would be res judicata against him; that the District Court had jurisdiction to entertain the suit as against him notwithstanding he resided outside the district, because by voluntarily coming in and defending for Saalfield he had submitted to the jurisdiction and waived the objection, and because the supplemental bill was a dependent and ancillary proceeding, and therefore properly brought in the district wherein the original proceeding was pending; and, finally, that because of its being an ancillary proceeding, substituted service upon the solicitors representing Ogilvie in the original, proceeding was sufficient to subject him to the jurisdiction for the purposes of the supplemental bill. There is a faint attempt to sustain the jurisdiction on the theory that Ogilvie’s affidavit, filed February 22, 1913, as mentioned in the interlocutory decree pro confesso, amounted to a general appearance, because it was submitted in opposition to a motion for injunction on the supplemental bill, and because it “argued the case upon the merits.” This may be overruled at once. The affidavit shows on its face that it was to be used only as evidence for defendants Saalfield and the Publishing Company, and was not to be construed as an appearance by Ogilvie.

The District Court, while raising some question whether the solicitors and counsel who had appeared for Saalfield at Ogilvie’s expense had not concluded their services in

In so holding, the court applied the doctrine that has. been laid down in a number of cases, that a third party, does not become bound by a decree because of his participation in the defense unless his- conduct in that regard was open and avowed or otherwise known to the opposite party, so that the latter would haye been concluded by an adverse judgment. See Andrews v. National Pipe Works, 76 Fed. Rep. 166 , 173; Lane v. Welds, 99 Fed. Rep. 286 , 288. We need not consider the soundness of the doctrine, for appellant does not question it, insisting only that it is not applicable here because Ogilvie’s control of the defense made in Saalfield’s name became known to appellant during the progress of the suit, and before final decree; it being contended that the decree of September 11, 1912, was interlocutory and not final.

But it is familiar law that only a final judgment is res judicata as between the parties. And it is evident that a decree cannot be res judicata as against a third party participating in the defense unless it is so far final as to be res judicata against the defendant himself. Hence, if the decree of September 11 was not final as between appellant and Saalfield, it cannot be res judicata, as against. Ogilvie; and thus the fundamental ground for proceeding against the latter by supplemental bill with substituted service of process disappears. This sufficiently shows the weakness of appellant’s position, which, upon analysis, is

Final orders affirmed.