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Le Mieux Bros. v. Tremont Lumber Co.
140 F.2d 387
5th Cir.
1944
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WALLER, Circuit Judge.

LеMieux Brothers, Inc.; a Louisiana corporation, performed certain services at the request of the Tremont Lumber Comрany, Ltd., a Louisiana corporation, with no definite understanding as to the amount to be paid for such services. After the rendition оf the services and before the bringing of this suit, the stockholders of LeMieux Brothers, Inc., of Louisiana, which will hereafter be referred tо as “the Louisiana corporation”, caused a corporation to be formed under the laws of Delaware under the same name, to which the Louisiana corporation assigned and conveyed all of its assets by a formal instrument of convеyance and assignment. Thereupon the Louisiana corporation was dissolved. The assignee, the Delaware corрoration, sued in the United States District Court of the Western District of Louisiana for the recovery of the reason able value оf the services of its assignor ‍‌‌‌‌​‌‌‌‌​‌‌​​‌‌​‌‌‌‌‌‌‌‌‌​​​‌‌​‌​​​​​‌​​​‌‌‌‌​​‍from Tremont Lumber Company.

Defendant moved to dismiss for lack of jurisdiction, asserting that the court did not havе jurisdiction of any suit to recover upon the assigned chose in action since, under Sec. 41(1), Title 28 U.S.C. A., 1 such a suit could not have been prosecuted in such court to recover upon such chose in action if no assignment had been made. Plaintiff insists that LeMieux Brоthers, Inc., of Louisiana, was, in substance, merely transplanted to, and became a corporation and citizen of, Delаware. It insists that LeMieux Brothers of Delaware owns the same assets, has the same name, is owned by the same stockholders in the same proportions, and that ‍‌‌‌‌​‌‌‌‌​‌‌​​‌‌​‌‌‌‌‌‌‌‌‌​​​‌‌​‌​​​​​‌​​​‌‌‌‌​​‍in actuality it is the same corporation, merely domiciled in another State. It further insists that the right of action which it seeks to maintain is not a chose in action arising out of contract, to which said section applies, but that it is а right of action arising by operation of law. The lower court, rejecting the contention of plaintiff, dismissed the complaint fоr lack of jurisdiction, thereby provoking this appeal.

United States District Courts are courts of limited jurisdiction. Creatures of statute, they have only such jurisdiction as the statutes expressly confer, and this jurisdiction must always affirmatively appear. The provisions in the sеction under consideration were enacted for the purpose of preventing suits by assignees under assignments made for the еxpress purpose of giving jurisdiction to the federal courts which would not otherwise have existed. Bushnell v. Kennedy, 9 Wall. 387, 76 U.S. 387, 19 L.Ed. 736. Whenever the questiоn of jurisdiction of the federal District Court is presented it will be presumed that the court ‍‌‌‌‌​‌‌‌‌​‌‌​​‌‌​‌‌‌‌‌‌‌‌‌​​​‌‌​‌​​​​​‌​​​‌‌‌‌​​‍is without jurisdiction unless the contrary affirmatively aрpears. Utah-Nevada Company v. De Lamar, 9 Cir., 133 F. 113.

Choses in action dealt with in said section are those rights of action acquirеd by assignment as distinguished from rights acquired by operation of law, such as subrogation, resulting, or constructive, trusts, succession, and the like. This and оther courts have held that even though a conventional assignment was executed, nevertheless, if the assignee was possеssed of the right to sue by virtue of equitable subrogation, the subrogee or assignee would not be prohibited from maintaining an action in thе federal court. American Surety Co. v. Lewis State Bank, 5 Cir., 58 F.2d 559; City of New Orleans v. Whitney, 138 U.S. 595, text 605, 606, 11 S.Ct. 428, 34 L.Ed. 1102; Brown v. Fletcher, 235 U.S. 589, 35 S.Ct. 154, 59 L.Ed. 374. In the present case, however, plaintiff is purely an assignee. The Louisiаna and the Delaware corporations were separate and distinct entities. The title to the chose in action was acquired by plaintiff solely by virtue of the transfer and assignment ‍‌‌‌‌​‌‌‌‌​‌‌​​‌‌​‌‌‌‌‌‌‌‌‌​​​‌‌​‌​​​​​‌​​​‌‌‌‌​​‍from the Louisiana corporation and was in nowise dependent upon equitable considerations. We are not now confronted with a situation where the court should look through, or disregard, corporate entities in order to protect equities of third parties.

A corporation is a creation of the State оf its incorporation, and may not become a citizen of another State, within the purview of the statute under consideratiоn, merely by conveying its assets to another corporation by the same name in that other State and thereupon being dissolved in the State of its creation.

Appellant urges that the rendition of the services by its assignor to defendant, at the request of the lаtter, does not constitute a contract, expressed or implied, under the laws of the State of Louisiana, but that the right to be paid for such services arises as a quasi contractual right, .implied by law, rather than created by contract. It is the universal rule in States having a common-law ‍‌‌‌‌​‌‌‌‌​‌‌​​‌‌​‌‌‌‌‌‌‌‌‌​​​‌‌​‌​​​​​‌​​​‌‌‌‌​​‍background that where one renders services to another at the request of the latter there arises an implied contract to pay the servant the reasonable value of those services. An implied contract is as binding as an expressed contract, and has as its origin, or base, the agreement between the parties. The law operates on the agreement as distinguished from becoming a part of the agreement.

Title IV, of Conventional Obligations, Article 1761, Louisianа Civil Code, reading as follows: “A contract is an agreement, by which one person obligates himself to another, to give, to do or permit, or not to do something, expressed or implied hy such agreement,” was cited by the lower court in support of its conclusion that implied contracts were recognized under the laws of Louisiana. We concur. It is our view that the transaction should be denominated an implied contract, but whether the arrangement in question be called a quasi contract or an implied сontract, the rights here sought to be enforced arose out of a contractual relation, and the rights accruing thereundеr constituted a chose in action within the purview of Sec. 41(1), Title 28, U.S.C.A., which should not be confused with rights that arise purely by operation оf law. LeMieux Brothers, Inc., of Louisiana could not have brought this suit in the court below against Tremont Lumber Company of Louisiana, and it must fоllow that LeMieux Brothers, Inc., of Delaware, assignee of LeMieux Brothers, Inc., of Louisiana, cannot maintain the suit in said court

The judgment below is affirmed.

Notes

1

“No district court sliall have cognizance of any suit * * * to recover upon any * * * chose in action in favor of any assignee * * * unless such suit might have been prosecuted in such court to recover upon said * * * chose in action if no assignment had been made. * *

Case Details

Case Name: Le Mieux Bros. v. Tremont Lumber Co.
Court Name: Court of Appeals for the Fifth Circuit
Date Published: Jan 26, 1944
Citation: 140 F.2d 387
Docket Number: 10866
Court Abbreviation: 5th Cir.
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