270 F.2d 550

Arthur C. ROUMEL, Appellant, v. DRILL WELL OIL COMPANY, Appellee.

No. 17593.

United States Court of Appeals Fifth Circuit.

Sept. 30, 1959.

*551W. B. Browder, Jr., Midland, Tex., Stubbeman, McRae, Sealy & Laughlin, Midland, Tex., of counsel, for appellant.

R. Marvin Pierce, Wichita Falls, Tex., Henry D. Akin, Jr., Dallas, Tex., for ap-pellee.

Before RIVES, Chief Judge, and CAMERON and JONES, Circuit Judges.

CAMERON, Circuit Judge.

October Í, 1957, appellee Drill Well Oil Company1 brought suit in a Texas state court against appellant Arthur C. Roumel, a non-resident of the State of Texas who was a resident citizen of Washington, D. G., 2 praying for relief in *552connection with certain oil and gas leases situated in the State of Texas. The complaint alleged that plaintiff had, March 1, 1957, filed liens upon the Labor and Materialmen’s Lien Records of the counties in which the leased lands were situated, and that defendant Roumel was, or claimed to be, owner of undivided interests in the leases which plaintiff was operating, having acquired them under Trustee’s deed on May 7, 1957, and that Friedman had acquired them by assignment from plaintiff May 21, 1956. The prayer of the complaint was for personal judgment against Roumel and Friedman for something over $18,000.00 and “for foreclosure of liens and for such further relief to which plaintiff may be entitled.”

The clerk of the state court issued a citation for personal service dated Oct. 2, 1957, and the United States Marshal for the District of Columbia certified that he served it on Roumel Oct. 7th, the return being filed in the state court October 15th. The citation was issued under authority of Rule 108 of Vernon’s Rules of Civil Procedure, State of Texas.3 Appellant seasonably filed in the state court a petition removing the suit to the United States District Court and filed his answer, stating as his first defense that the court did not have jurisdiction of his person.

The record does not contain an order denying the plea to the jurisdiction until the final judgment on the merits was entered Oct. 6, 1958. At the beginning of the hearing on the merits April 3, 1958, however, the trial court stated that the first defense of Roumel was overruled.4 Appellant Roumel had, on the day the trial began, filed his amended answer to the supplemental complaint of the company filed three days before. In this amended answer Roumel stated that it was being filed “after * * * the plea to the Court’s jurisdiction as pleaded in defendant’s original answer has been overruled, and exception taken by this defendant, * * In the final judgment entered by the court below Oct. 6, 1958, the court formally overruled appellant’s motion to dismiss for want of jurisdiction.5

At the threshold of the case, therefore, is the question of the correctness of the court’s action in assuming jurisdiction over appellant for the ren*553dition of a personal judgment.6 The judgment made no mention of any liens, did not purport to deal with title to any property, and was in fact nothing but a personal judgment in favor of the company and against Roumel for what the court adjudged to be his part of the operating and developing expenses.

Appellant contends that the court was without jurisdiction to render a personal judgment against him, it being undisputed that he was a non-resident of the State of Texas. The court did not assign any reason for its action in denying Rou-mel’s plea to the jurisdiction and motion to dismiss, and we are limited to appel-lee’s statement of the basis of the court s ruling.7

We do not agree with the reasoning of the court below as described by appellee, nor with the appellee’s argument. The court below recognized that the mere mention of liens of the general character of materialmen’s liens in appellee’s pleadings did not invest the proceeding with an in rem character. From the argument before us it appears undisputed that Texas has statutes providing for attachment of the property of non-residents and garnishment of debts due them, but ap-pellee did not choose to avail itself of any of those rights.

*554It is clear that Texas has not attempted, by Rule 108 of its Rules of Civil Procedure or by any means, to vest jurisdiction in its courts to render personal judgments against non-residents. Wherever it has been drawn in question, Rule 108 has been held to be nothing more than a notice to a non-resident of the pendency of a suit involving property within the State of Texas. When called upon to apply the rule as conferring jurisdiction upon a Texas court to render a personal judgment against a non-resident,8 Judge Allred, of the United States District Court for the Southern District of Texas, characterized the rule as one “usually employed in proceedings in rem” and stated: “This type of service was, of course, a complete nullity and did not subject defendants to the jurisdiction of the state court.”9

In a suit arising under Articles 2037 and 2038 (declared to be now Rule No. 108, Texas Rules of Civil Procedure) of Vernon’s Annotated Civil Statutes, the Texas Court of Civil Appeals10 reversed a personal judgment obtained by service of non-resident notice such as is here involved. The suit was by a member of a dissolved partnership against another member, and it referred to monies in the hands of a resident trustee who was collecting the accounts of the partnership, but who was not made a party to the suit. In reaching the conclusion that a personal judgment could not stand, the court stated:

“ * * * He [the trustee] was not made a party to the suit and the judgment is not binding upon him or the funds in his hands. He resided in Palo Pinto County, where the oil well was situated and where the funds which had been collected on the claim were apparently in his possession. No attachment or garnishment was levied- upon or run against the funds in his hand as trustee; nor was any process issued against the original debtor subjecting any balance that might be due on the original claim or debt to the jurisdiction of the court. The suit or proceeding was therefore not one in rem, because the court acquired no jurisdiction over either the funds in the hands of the trustee, or over any balance that might be due by the original debtor on the claim in suit. The suit or proceeding was merely to establish an interest in the claim or debt, or was to establish an alleged contractual right to an interest therein as against the appellant alone. No interest in the trust fund as against the trustee could be determined, because the trustee was not a party to the suit. Nor had the trust fund been subjected to the jurisdiction of the court. The suit or proceeding was clearly one in per-sonam, and consequently the service of the nonresident notice only on appellant was insufficient to confer jurisdiction on the trial court to adjudicate the cause or to sustain the personal judgment rendered against appellant.” [Italics added.]

The court cited Articles 1975 and 1976 of Vernon’s Statutes as being in pari materia and listed cases under those statutes as being applicable to a proceeding under Rule 108. Among the cases there cited was Erwin v. Holliday, Tex.Com. App.1938, 131 Tex. 69, 112 S.W.2d 177, affirming and adopting the opinion of the Court of Civil Appeals, 1935, 85 S.W.2d 355. The two opinions discuss fully the character of suits involving property in Texas and of notices to nonresidents provided by Texas statutes. These two decisions are authority for the principle that a suit to cancel a receipt obtained by fraud was a personal action not maintain*555able upon such nonresident notices even though the party bringing the suit “also sought a decree declaring him to be the owner of one-fourth of seven-eighths of the first oil produced from a well upon a certain 50 acres of land * * The action there approaches much more nearly to one in rem, than the one before us. No Texas case is cited which has any tendency to question these principles or to sustain appellee’s position with respect to them.11

The recurrent, albeit obscure, arguments of appellee that appellant waived his contention that the court below did not have jurisdiction over him for the rendition of a personal judgment are equally without substance. The specific language of Rule 12(b), F.R.C.P. answers appellee’s position: “No defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion.”12 The same rule gave appellant the right to raise the jurisdictional question by a preliminary motion, but with the specific provision that the right should be “at the option of the pleader.” The fact is that the first paragraph of appellant’s original answer was a plea to the jurisdiction of the court, and the same is true of his supplemental answer. From the facts recited above, it is manifest that this defense had been called up and acted upon adversely to appellant before any evidence on the merits was introduced.

Finally, we deal with appellee’s contention that the three Supreme Court cases listed supra,13 considered together, support the opinion of the court beioW that Roumel was subject to in personam jurisdiction and to rendition by the court below of a personal judgment against him based upon the “minimal contacts” theory. It is difficult to discern how appellee can get any comfort out of Vanderbilt. On the other hand, the Supreme Court, through Mr. Justice Black, said (354 U.S. at page 418, 77 S.Ct. at page 1362): “It has long been the constitutional rule that a court cannot adjudicate a personal claim or obligation unless it has jurisdiction over the person of the defendant/’ *556citing the landmark case of Pennoyer v. Neff, supra.

It is understandable that the court below could have gathered from some of the language of McGee, then just published, that the Supreme Court had launched upon a severe breach with the stable moorings of the historical concepts illustrated by Pennoyer v. Neff; but that language must be interpreted in the light of the facts with which the court was there dealing. The Court of Civil Appeals of Texas14 had refused to honor a default judgment rendered by a California court, on the ground that under the Fourteenth Amendment, California’s statutes did not constitutionally authorize a personal judgment against International. Those statutes provided that delivery by a non-admitted insurance company of insurance contracts to residents of California constituted an appointment by the insurer of the insurance commissioner as its agent for the service of process in a suit based upon such contract. The Supreme Court reversed and found the limits on the power of state courts recognized in Pennoyer v. Neff to be a matter which had been the subject of “prolific controversy, particularly with respect to foreign corporations.” The court found that there was a clearly discernible trend towards expanding the permissible scope of state jurisdiction in such matters, particularly with respect to foreign corporations.15

Viewed against the background of its facts and of the authorities upon which its decision was based, McGee therefore does not represent the breach with Pen-noyer v. Neff which appellee seeks to ascribe to it, and does not furnish authority for the action by the court below upon appellant’s challenge to its jurisdiction.

*557It is not necessary to attempt to probe the intricacies of Hanson v. Denckla beyond nothing that Mr. Justice Black, dissenting 16 thought that the majority decision “stems from principles stated the better part of a century ago in Pennoyer v. Neff. * * * ” The majority did not indicate that it was taking back anything said in McGee, International Shoe Co. or Vanderbilt supra, but it declined to hold that a Florida court had either in rem or in personam jurisdiction over a Delaware corporation, trustee of intangibles which were indicia of ownership of property in Florida. The court said (357 U.S. at page 251, 78 S.Ct. at page 1238): “But it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.” What the court did in Hanson was to approve the action of a Delaware court declining to enforce a Florida judgment even though Mrs. Donner, the settlor of the trust upon the Delaware corporation, was a resident of Florida and had died there and her estate was being administered there and more than ninety-five per cent of the beneficiaries of the trust and of her estate resided there.

However much the concepts concerning state jurisdiction to render judgments may be in flux, it is clear that none of the cases discussed furnish authority for the action taken by the court below in this case. At the time it announced its rejection of appellant’s challenge to the jurisdiction, it had heard no evidence concerning any contacts he may have had with the State of Texas, and the court made no finding of any such contacts. Even accepting appellee’s estimate of the facts ultimately developed at the hearing on the merits (the showing being at best meager and confused), this case is not brought within the ambit of any ease cited or discussed. Appellee’s contentions as to the facts may be thus summarized :

Appellee, on May 21, 1956, sold to William Joseph Friedman, III, and others an undivided one-half interest in certain leases owned by it in Texas, and Friedman held title to the fractional interest purchased by him until it was transferred by trustee’s sale May 7,1957 to appellant. This sale was in connection with a suit filed in a Texas court by appellant against Friedman, which resulted in a judgment dated Dec. 9, 1957 reciting that appellant had been the equitable owner of the interests held by Friedman since their acquisition by him. During the time he held title, Friedman was advised of certain water-flooding operations being conducted by appellee and he recognized his status to be that of owner of a working interest with appellee in said leases and he contributed a portion of the maintenance and development expenses. After the conveyance to appellant, the latter was kept advised of appellee’s operations and was rendered bills for the share of the operating costs appellee claimed he owned, but he never made any payments thereon.

All of the cases relied upon involved foreign corporations whose contacts with the states wherein the suits were brought were made through the activities of its agents. Cf. our decisions in Rosenthal v. Frankfort Distillers Corp., 5 Cir., 1951, 193 F.2d 137; Employers’ Liability Assurance Corp. v. Lejeune, 5 Cir., 1951, 189 F.2d 521; and Stanga v. McCormick Shipping Corp., 5 Cir., 1959, 268 F.2d 544. At most, the only contact appellant had with Texas was that he was the owner of an undivided interest in some oil leases there. He was at all times an individual who had his residence and citizenship in the District of Columbia and was not present in Texas either actually or through the conduct of any business activities there. The cases are therefore inapplicable to the facts before us.

Being of the clear opinion that appellant was not subject to suit in the State of Texas in which a personal judgment could be rendered against him and that the facts before the court below demonstrated his status without controversy, *558we think it was error for the court below to deny his plea to the jurisdiction and to proceed to trial and to the entry of a personal judgment against him.

The judgment of the lower court is, therefore, reversed and the cause remanded for further proceedings consistent with this opinion.

Reversed and remanded.

Roumel v. Drill Well Oil Co.
270 F.2d 550

Case Details

Name
Roumel v. Drill Well Oil Co.
Decision Date
Sep 30, 1959
Citations

270 F.2d 550

Jurisdiction
United States

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