80 F. 422 | U.S. Circuit Court for the District of Southern New York | 1897
This is an action by 10 of the stockholders of the Bowery Insurance Company against its receiver and directors praying for an accounting by reason of the alleged malfeasance of the defendants and the consequent impairment of the capital stock of the company. The complainants are citizens of Rhode Island and Maryland and the defendants áre citizens of Hew York, Hew Jersey, Illinois and Kentucky. The sole ground of jurisdiction is the diverse citizenship of the parties. The defendant Mailler has filed a plea disputing the jurisdiction of the court upon the ground that he is not an inhabitant of the Southern district of Hew York but resides in the Eastern district. The act of August 18, 1888 (25 Stat. 433), is clear and explicit. It provides that no civil suit shall be brought in this court against any person “in any other district than that whereof he is an inhabitant.” There is but one exception to this rule to be found in the statute. Where jurisdiction is founded solely upon diverse citizenship the suit may also be brought in the district of the plaintiff, if a citizen, provided he can there obtain service upon the defendant. This proviso is not now involved. The act of 1888, correcting the act of 1887, has been repeatedly construed by the courts. It has been held that the words “plaintiff” and “defendant” as used in the first section are not intended to restrict the act to causes where there is but one plaintiff and one defendant, but that the words are used in a collective sense and apply to cases where there are several parties on one side or both sides of the controversy. Accordingly, in a cause like the present, if no other law applies, all of the defendants must be inhabitants of the district where the venue is laid. Smith v. Lyon, 133 U. S. 315, 10 Sup. Ct. 303; Bensinger Self-Adding Cash-Register Co. v. National Cash-Register Co., 42 Fed. 81. The general object of the act of 1888 was to restrict and not to enlarge the jurisdiction of the circuit courts and where the jurisdiction is based on citizenship it requires that the suit shall be brought “in the state of which one of the parties is a citizen, and in the district therein of which he is an inhabitant and resident.” Shaw v. Mining Co., 145 U. S. 444, 12 Sup.
“As no exception was made in that act [1875] of the cases provided for by sections 740, 741, and 742, Rev. St., it is at least open to some doubt as to whether suits will lie against nonresident defendants under those sections.”
The question has, however, been squarely decided in East Tennessee, V. & G. R. Co. v. Atlanta & F. R. Co., 49 Fed. 608, where the court in a well-reasoned opinion reaches the conclusion (page 616):
“That the special cases for which provision was made by the act of May 4, 1858, embodied in sections 740, 741, and 742 of the Revised Statutes, relating to the locality of suits in the states containing more than one district, were not within the contemplation of congress when that act [1875] was enacted, and are not repealed by it. * * * The provisions of the act of August 13, 1888, amendatory of the act of 1875, in respect to the questions under discussion, are in no particulars different from the latter act. These recent statutes, therefore, are likewise within the range of the authority of U. S. v. Mooney, 116 U. S. 104, 6 Sup. Ct. 304, and, in the opinion of the court, clearly did not repeal sections 740, 741 and 742 of the Revised Statutes.”
The act of 1888 makes no provision for cases where the plaintiff is a citizen of one state and the defendants are citizens of another state but reside in different districts. The last clause of section 740 provides for these cases, and if retained in the body of the law the federal courts will hold a class of causes which, under the constitution and the general theory of legislation since, appears to be within the scope of their jurisdiction. The court is of the opinion that the clause in question may with consistency be retained, that it is not in conflict with the law of 1888, and, therefore, that its repeal should not be declared. The plea is overruled. The defendant may answer within 20 days.