201 F. 878 | 7th Cir. | 1912
The record is barren of anything to sustain jurisdiction, except the averment in the declaration. Inasmuch as the fiction is, not that the corporation itself is really a citizen, but that the stockholders are all citizens of the state which chartered the corporation, and that the corporation is a mere form through which such citizens are exercising their constitutional right of being heard in a federal court when the controversy is between, citizens of different states, the approved form of allegation is that the defendant -is a corporation organized and existing under the laws of the named state. From this formula of averment an irrebuttable presumption that the stockholders are citizens of the chartering state is held to arise. And, since the corporation itself cannot be in truth a citizen, an allegation that it is a citizen is inadmissible as a basis on which to found the aforesaid irrebuttable presumption. We are constrained, therefore, to hold that the aver-, ment of jurisdiction is bad, and to reverse the judgment for the want, of any showing of jurisdiction. Lafayette Ins. Co. v. French, 18 How. 404, 15 L. Ed. 451; Knight v. Lutcher & Moore Lumber Co., 136 Fed. 404, 69 C. C. A. 24_ .
If jurisdiction depended upon the presence or absence of an averment in the declaration respecting citizenship,- unquestionably we would be required to set aside all the proceedings in the trial court-back to the declaration, with leave to the plaintiff to file an amended declaration. But jurisdiction in-the trial court is not dependent upon,
In Mexican Central Railway v. Duthie, 189 U. S. 76, 23 Sup. Ct. 610, 47 L. Ed. 715, the declaration was deficient, the defendant joined issue on the merits, and a trial was had resulting in a verdict for the plaintiff. But there was nothing in the record preceding the verdict to show that there was, in truth, a controversy between citizens of different states. The trial court permitted the plaintiff to allege and to offer proof to sustain the fact of diversity of citizenship, and the Supreme Court held that this was within the power of the trial court. This decision further indicates, we think, that a defendant would not be denied the right of trial by jury, if, after verdict, an issue of fact respecting diversity of citizenship was framed and a trial by jury was desired.
If a defendant may hold tight to a defective jurisdictional averment as an anchor to windward and then go through, a trial on the merits, knowing that, if he wins on the merits, he can have the record cured so, that his opponent is forever stopped, while, if beaten, he may sue out a writ of error and insist to the appellate tribunal that it is powerless to do other than grant him a new trial on the merits, skill in fencing by the advocates would seem to be more influential in reaching results than justice between the parties; for, if a defendant in such circumstances should demand a new trial at the hands of the trial court on the ground that jurisdiction did not affirmatively appear in the record, that court, under the authority of the Duthie Case, supra, would give the plaintiff an opportunity to bring the fact of diversity of citizenship upon the record, after verdict, instead of setting the verdict aside. And we believe that an appellate tribunal is not inevitably bound to allow such a defendant any greater advantage by reason of his covering the objection than he would have had on disclosing it to the trial court; that an appellate tribunal has power to mold its mandate on affirmance or on reversal so as to give more importance to the substantial rights of the parties than to the feints and covers of advocates. In Grand Trunk Western Railway Co. v. Reddick, 160 Fed. 898, 88 C. C. A. 80, we followed the course of reversing a judgment, while leaving what we found to be a just verdict stand, pending an inquiry in the trial court into the fact of diversity of citizenship; and a reconsideration of the question has not led us to find any valid ground for departing from that decision.
It is true, as defendant insists, that we cannot ultimately determine the merits at this time. That is, we cannot now affirm a judgment which has not yet been entered and which will never be entered if the trial court finds that there was, in fact, no diversity of citizenship. The judgment heretofore entered, to which the present writ of error is addressed, must inevitably be reversed because this court, having only appellate jurisdiction on this writ of error, cannot conduct an
The judgment is reversed, with the direction to the trial court to permit plaintiff to file an amendment respecting diversity of citizenship and to permit the defendant to take issue, thereon, if it is so advised, and to grant to the parties the trial of such issue by a jury, unless the jury is duly waived, and to dismiss the action without prejudice, at plaintiff’s costs, if it be found that diversity of citizenship did not exist, but otherwise to enter judgment upon the verdict.