Seavey v. Boston & Maine RR

• Decision Date: 20 June 1952
• Docket Number: No. 4627.,4627.
• Parties: SEAVEY v. BOSTON & MAINE R. R.
• Court: U.S. Court of Appeals — First Circuit

197 F.2d 485 (1952)

SEAVEY v. BOSTON & MAINE R. R.

No. 4627.

United States Court of Appeals First Circuit.

June 20, 1952.

Anthony Brayton, Boston, Mass., for appellant.

Parker Brownell, Boston, Mass., for appellee.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

WOODBURY, Circuit Judge.

Seavey, a citizen of Massachusetts, brought the instant action in the United States District Court for the District of Massachusetts against the Boston & Maine Railroad, alleging it to be a corporation organized under the laws of New York, to recover for personal injuries which he alleged he sustained in a head-on collision in Vermont between a train of the defendant upon which he was riding as a passenger and another train. The defendant answered denying negligence on its part and in addition asserting its incorporation in Massachusetts wherefore it challenged the court's jurisdiction. At the same time it filed a motion to dismiss for lack of jurisdiction and when this motion came on for hearing it was stipulated that the defendant, in addition to being incorporated under the laws of New York as alleged in the complaint, was also incorporated under the laws of Massachusetts.¹ There being no doubt whatever that the value of the matter in controversy was well over $3,000 exclusive of interest and costs, and that no federal question of any sort was involved, the court below forthwith granted the motion to dismiss, and entered the final judgment dismissing the action for want of jurisdiction from which the plaintiff has taken this appeal.

It is conceded, and it is obvious, that federal jurisdiction, if it exists, must rest upon Title 28 U.S.C. § 1332(a) (1) wherein original jurisdiction is conferred upon the district courts "of all civil actions where the matter in controversy exceeds the sum or value of $3,000 exclusive of interest and costs, and is between: Citizens of different States". And the only question here is whether there is the requisite diversity of citizenship in view of the fact that the defendant corporation, in addition to existing under the laws of New York as alleged (and incidentally also under the laws of New Hampshire) also exists under the laws of Massachusetts where the plaintiff is a citizen.

The ruling of the court below dismissing the action for lack of jurisdiction is in conformity with precedents in this circuit, Goodwin v. N. Y., N. H. & H. R. R. Co., C.C., D.Mass.1903, 124 F. 358; Peterborough R. R. v. Boston & Maine R. R., 1 Cir., 1917, 239 F. 97; Geoffroy v. New York, N. H., & H. R. R. Co., 1 Cir., 1927, 16 F.2d 1017, and with a case in the Fourth Circuit in which the multi-state corporation was plaintiff, Town of Bethel v. Atlantic Coast Line R. Co., 4 Cir., 1936, 81 F.2d 60, certiorari denied, 298 U.S. 682, 56 S.Ct. 952, 80 L.Ed. 1402, and also with an earlier case in the Eighth Circuit. Missouri Pac. Ry. Co. v. Meeh, 1895, 69 F. 753, 30 L.R.A. 250. But the ruling below is squarely in conflict with a recent case in the Third Circuit. Gavin v. Hudson & Manhattan R. Co., 3 Cir., 1950, 185 F.2d 104.

While we agree with much that is said in the case last cited we do not agree with its result, but adhere to the previous decisions of this court cited above.

We agree with the Third Circuit that the state in which the claim sued upon arises, be it for tort or contract, is irrelevant for the reason that the causes of action on such claims are transitory. And we agree that the chronological order of incorporation in the several states involved is without legal significance. Also we think it unimportant whether the corporation is the result of a merger or consolidation, or whether the charter or charters of incorporation subsequent to the first one were issued to natural persons or to a corporate entity already existing under the laws of some other state. Moreover, like the Third Circuit in the Gavin case we can and do distinguish the situation presented when a foreign corporation is compelled by local law to incorporate in a state in order to do business therein, for the defendant's incorporation in New Hampshire and Massachusetts was substantially simultaneous and so far as we can tell free, and for all that appears it voluntarily became a New York corporation many years later for purposes of its own. Compare Southern R. Co. v. Allison, 190 U.S. 326, 23 S.Ct. 713, 47 L.Ed. 1078, with Patch v. Wabash Railroad Co., 1907, 207 U.S. 277, 283, 284, 28 S.Ct. 80, 52 L.Ed. 204. Furthermore we agree with the Third Circuit that no important political, economic, sociological or ethical considerations are involved, but all that is required is a clear guide, such as is given by the rules of the road for traffic, to tell citizens whether they may sue a corporation organized in their own state and also in another in their local federal court or whether they may not.

There are no decisions of the Supreme Court directly in point that we have been able to find, and such authorities as there are in that Court "do not help us very much", as Judge Goodrich remarked in the Gavin case, 185 F.2d 107. However, it appears to be the rule that for jurisdictional purposes a multi-state corporation must be regarded in each state of its incorporation as solely domesticated therein so that in consequence a citizen of another state can sue such a corporation under the diversity jurisdiction in a state where it is incorporated, even though the corporation is also organized under the laws of the state of the plaintiff's citizenship. See Railway Company v. Whitton's Adm'r, 1871, 13 Wall. 270, 283, 20 L.Ed. 571; Muller v. Dows, 1876, 94 U.S. 444, 447, 24 L.Ed. 207; Pennsylvania R. Co. v. St. Louis, Alton & Terre Haute R. Co., 1886, 118 U.S. 290, 298, 6 S.Ct. 1094, 30 L.Ed. 83. See also Memphis, etc., R. R. Co. v. State of Alabama, 1882, 107 U.S. 581, 585, 2 S.Ct. 432, 27 L.Ed. 518. It has been so held in this circuit. Boston & Maine R. R. v. Hurd, 1 Cir., 1901, 108 F. 116, 56 L.R.A. 193, certiorari denied, 1902, 184 U.S. 700, 22 S.Ct. 939, 46 L.Ed. 765; Boston & Maine R. R. v. Breslin, 1 Cir., 1935, 80 F.2d 749, 103 A.L.R. 695, certiorari denied, 1936, 297 U.S. 715, 56 S.Ct. 590, 80 L.Ed. 1000. Thus, assuming of course that the jurisdictional amount is involved, a citizen of state X can sue a corporation organized under the laws of state Y in the United States District Court for the District of Y even though the corporate defendant is also organized under the laws of state X. In view of the line of cases so holding, the Court of Appeals for the Third Circuit in the Gavin case found it incongruous to hold that a citizen of state X could not also sue the corporate defendant in state X. Judge Goodrich writing for the Court said:

"Defendant says that these plaintiffs from New Jersey could sue the New York defendant corporation in New York or that a New Yorker could come over to New Jersey and sue the defendant as a New Jersey corporation. But, says defendant, it cannot be sued in a federal court in New York by a New Yorker or in New Jersey by a New Jerseyite. Such a rule if adopted may be an effective means of promoting additional passenger business for the Hudson & Manhattan, but we think it would be pretty hard to explain its reason to a layman. Such a consideration should make us think twice before accepting the result. If a legal rule fails to satisfy the untechnical requirements of ordinary common sense the premises behind the rule had better be carefully examined."

While we have no little respect for the "untechnical requirements of ordinary common sense" it must be conceded that here we are perforce required to deal with unrealistic legal fictions inexplicable to a layman,...