Central Trust Co. of New York v. Virginia, T. & C. Steel & Iron Co., 55 F. 769

55 F. 769 | U.S. Circuit Court for the District of Western Virginia | 1893

PAUL, District Judge,

(after stating the facts as above.) The foregoing statement of the facts presents the questions involved in such a confused and unsatisfactory condition as to require the court to separate the several matters a.t issue, and consider them in their respective relations to the several causes. The causes are certainly not such, in their present condition, as can be consolidated and heard together. The interests involved in the several suits pertain to separate and distinct corporations, as far as the same appear from the record. The parties are different. The complainant in one of the causes appears as defendant in another of the canses; and (he complainant in the two other causes brings suits against separate and distinct defendants in each of said causes. It is true that the petitioners for Intervention have asked the court to consolidate all these causes and hear them, together, and in the pleadings the counsel lor said petitioners seem to have assumed that the causes have been consolidated. But ilus is anticipating the court, and is an assumption, in advance of the court's consideration of the question, that the court would decide as requested. In the condition of the record, and in view of the weight of authorities on the question, the court must decline to consolidate these causes, because it does not appear to the court that it would be reasonable to do bo. Rev. St. U. S. § 921; Conk. Treatise, (5th Ed.) 385.

The cause of the Central Trust Company of New York v. the Virginia, Tennessee Carolina Steel & Iron Company being the only one of these causes in which a, full and elaborate answer has been, filed, the court will proceed to consider that cause; and in doing so will treat the petition of William McGeorge and others as the answer of codexendants, in which character said William McGeorge and others, who hove filed said petition, will be hereafter regarded. In the other causes the petitioners will be allowed to file amended petitions, if they so desire, showing to the court wbat interest, if any, they have in said causes.

The first question presented in the cause of the Central Trust Company of New York v. the Virginia, Tennessee & Carolina Steel & Iron Company is the question of jurisdiction, and, as will appear hereinafter, this is the only question which it will be necessary to consider. The complainant company in this cause alleges in its bill that it is á corporation created by and existing under the laws of the state of New York, and is a citizen and resident of said state of New York; and that the defendant company is a corporation created by and existing under the laws of the state of New Jersey, and is a citizen and resident of said state of New Jersey, and has a principal place of business and does business and owns property at Bristol and elsewhere in the state of Virginia, and in the western district of Virginia. It therefore appears upon the face of the record that neither the complainant company nor the defendant company is a citizen of the state of Virginia, and the alleged fact that the defendant company has a principal place of business and does business and owns property in the state of Virginia does not affect this condition of the cause. Chapter 137, § 5, 18 U. S. Stat., reads as follows:

“Sec. 5. That if, in any suit commenced in a circuit court or removed from a state court to a circuit court of the United States, it shall appear to the satisfaction of said circuit court, at any time after such suit has been brought or removed thereto, that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of said circuit court, * * * the said circuit court shall proceed no further therein, but shall dismiss the suit, * * * and shall make such order as to costs as shall be just.”

And the supreme court has said:

“Where the record does not show a case within the jurisdiction of a circuit court, this court will take notice of the fact, although no question of jurisdiction had been raised by the parties.” Grace v. Insurance Co., 109 U. S. 278, 3 Sup. Ct. Rep. 207.

The jurisdictional question is also directly raised in the petition of William McGeorge and others, which petition is now treated as an answer of codefendants, and was directly presented by said codefendants at the first opportunity they had to do so. The act of congress approved March 3, 1887, as corrected August 13, 1888,. determining the jurisdiction of the circuit court, provides that “when the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or the defendant” This brief statement of the law as to where suits must be brought between citizens of different states in the circuit courts of the United States would seem to settle the question of jurisdiction in this cause.

But counsel for the complainant company contend that, while this is the statutory provision, yet it may be waived, and that it has been waived in this cause, by the voluntary appearance of the defendant company, and its confession of judgment on the law side of this court, and by its appearing and consenting to the appointment of a receiver. The court thinks that this view might possibly be correct in a cause wherein the defendant voluntarily appears and pleads to the merits of the cause, provided the cause be one in which there is a controversy between citizens of •different states, and the suit is brought in the state of which either the plaintiff or the defendant is a citizen, but in a district of such state other than that of which either the plaintiff or the defendant is a resident. Whenever the requisite citizenship exists, — that is to say, in any cause in which either the plaintiff or the defendant is a citizen of the state in which the suit is brought, and the adverse party is a citizen of another state, — the constitutional and statutory foundation on which the jurisdiction of the circuit courts of the United States must be based has been established, and, that being done, the privilege of being sued, in such a cause, in the district of the state of which the defendant is a citizen, is one which the defendant might waive by voluntarily appearing and pleading to the merits of the controversy; for in such a cause the jurisdiction of the court exists by provision of constitutional and statutory law, and no tiling that either party to the suit could do could either give or take away that jurisdiction. The error of the counsel for the complainant company in this cause consists in ignoring the constitutional and statutory provision that the requisite citizenship must exist in order to confer jurisdiction on the court

A. careful examination oí the cases cited by the counsel for the complainant company will make this clear. The first case cited is that of Grade v. Palmer, 8 Wheat. 699. This was a controversy, not between citizens of different states, but between a citizen of one of the states and an alien, a subject of Great Britain; and the reasoning of the court in that case, maintaining the jurisdiction of the circuit court of the United States, is in no wise applicable to this cause. The second case cited is Ex parte Scholl enberger, 96 U. S. 377. In this case the requisite citizenship existed to confer jurisdiction on the circuit court of the United States for the eastern district of Pennsylvania. It was a suit brought by a citizen of the state of Pennsylvania against a foreign insurance company doing business in that state. The next cases cited are those of Lexington v. Butler, 14 Wall. 282, and Claflin v. Insurance Co., 110 U. S. 81, 3 Sup. Ct. Rep. 507. These were cases of removal of suits from a state court to the circuit court of the United States for the district of the state in which said suits were originally brought. The law as declared in the latter of these cases applies to both, and is conclusive of the questions raised therein. It is that the restrictions upon an assignee as to bringing a suit originally in a circuit court of the United States do not apply to his right to have his suit removed into such court from a state court in which it had been originally brought. The court does not see the bearing of these cases upon the question under consideration. The next case cited is that of Railway Co. v. McBride, 141 U. S. 127, 11 Sup. Ct. Rep. 982. In this case the requisite citizenship of the parties was established to give the circuit court of the United States for the western district of Arkansas jurisdiction. It was a controversy between citizens of the state of Arkansas and a railway company, citizen of the state of Missouri, and the suit was brought in the stale of which one of the parties was a citizen. Justice Brewer, in rendering the decision of the supreme court, described the actiou as “one to recover money, the sum claimed being in excess of $2,000, and was between citizens of different states, and was brought in the district and state of the residence of the plaintiff. It was therefore within the general jurisdiction of the circuit courts of the United States, under section 1, c. 866, 25 Stat. 433; and, if the jurisdiction was founded Only on the fact that the action was between citizens of different states, it was brought in a circuit court of a proper district.” So the cases cited do not sustain the views of the counsel for the complainant company.

The provisions of the statute under consideration have recently been before the supreme court, namely, in the case of Shaw v. Mining Co., 145 U. S. 444, 12 Sup. Ct. Rep. 935, in which Justice Gray, speaking for the court, stated that “the single question in this case is whether, under the act of March 3, 1887, c. 373, § 1, as corrected by the act of August 13, 1888, c. 866, * * * a corporation incorporated in one state of the Union, and having a usual place of business in another state, in which it has not been incorporated, may he sued in a circuit court of the United States held in the latter state, by a citizen of a different state.” And the supreme court in that case decided that question in the negative. In the case of Southern Pac. Co. v. Denton, 146 U. S. 202, 13 Sup. Ct. Rep. 44, the doctrine laid down in the former case is reaffirmed. But counsel for the complainant company further contend that, although the statute says: “Where the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall be brought in the district of the residence of either the plaintiff or the defendant,” — yet, notwithstanding this statutory provision, parties residing in any two different states, respectively, may, by, consent, sue or be sued in a United States circuit court held in any other state, such state not being a state of which either the plaintiff or the defendant is a citizen. As has been said by the supreme court: “It needs no citation of authorities to show that the mere consent of parties cannot confer upon a court of the United States the jurisdiction to hear and decide a case. If this were once conceded, the federal courts would become the common resort of persons who have no right, either under the constitution or the laws of the United States, to litigate in those courts.” Bank v. Calhoun, 102 U. S. 260. In order to give the court jurisdiction it is essential that a controversy should exist between a citizen of another state and a citizen of the state in which the suit is brought. This does not appear to he so in this suit, and the court is therefore clearly of opinion that it has no jurisdiction in this cause. It appears that 'the order appointing receivers in this cause was improvidently awarded for want of jurisdiction by the court, and must be vacated; the receivers must be discharged; and the suit must be dismissed, at the cost of the complainant company.