Anderson v. Standard Accident Ins. Co.
| Decision Date | 18 December 1940 |
| Docket Number | No. 91 Civ. A.,91 Civ. A. |
| Citation | 36 F. Supp. 7 |
| Parties | ANDERSON et ux. v. STANDARD ACCIDENT INS. CO. |
| Court | U.S. District Court — Eastern District of Louisiana |
J. Elton Huckabay, Justin C. Daspit, and Claude E. Fernandez, all of Baton Rouge, La., for plaintiffs.
Eraste Vidrine and James G. Schillin, both of New Orleans, La., for defendant.
The plaintiffs, citizens of Louisiana, residing within the New Orleans Division of this Eastern District of Louisiana, bring their suit in the Baton Rouge Division of said District, against the defendant foreign corporation, incorporated under the laws of Michigan, and domiciled in the City of Detroit, on the theory that said defendant being duly authorized to do business in this State, and being actually so doing, has for its agent for the service of process the Secretary of State, and may, therefore, be sued at the domicile of said officer which, it is alleged, is the only "domicile" within this State that said foreign corporation may be said to have, and because, so plaintiffs contend, such defendant can not be sued except at its said "domicile".
The defendant corporation carried public liability insurance upon the automobile of one Peter Ferrara, which was the car involved in the fatal accident that resulted in the death of Mary Anderson, the minor daughter of the plaintiffs. The accident took place within the limits of the New Orleans Division of the Eastern District of Louisiana.
This damage suit for her death is brought against the insurer alone.
Peter Ferrara, the assured, is alleged to be also residing, as do plaintiffs, within the New Orleans Division of the Eastern District of Louisiana.
When the jurisdiction of the Court, in any civil suit, is founded exclusively on the fact that the action is between citizens of different states, such suit must be brought only in the district of the residence of either the plaintiff or the defendant. Jud. Code § 51, as amended, 28 U.S.C.A. § 112.
Despite the positive language of this venue statute, which reads: "* * * no civil suit shall be brought in any district court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; but where 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", it is well settled that these provisions do not operate as a deprivation of the original jurisdiction conferred upon federal District Courts by Jud.Code § 24, as amended, 28 U.S.C.A. § 41, as to all suits "between citizens of different States", where the value of the matter in controversy, exclusive of interest and costs, exceeds $3,000; but merely accord and establish a privilege concerning the place where a defendant may be sued; and such privilege may be waived either before or after suit, or simply by failing to assert it. McLean v. State of Mississippi ex rel. Roy, etc., 5 Cir., 1938, 96 F.2d 741, 119 A.L.R. 670, and United States Supreme Court cases therein cited.
In this civil suit, now before the Court, the Eastern District of Louisiana is the district of the residence of the two plaintiffs.
The corporation's place of residence can legally be nowhere else than within the limits of the sovereignty that created it. No corporation can change its domicile at will, and although one may be permitted to transact business where its charter does not operate, this does not bring about a "residence" beyond the limits of the State where the corporation had its legal birth. Germania Fire Insurance Company v. John R. Francis, 1871, 78 U.S. 210, 11 Wall. 210, 20 L.Ed. 77; Booth et al. v. St. Louis Fire Engine Mfg. Co., etc., C.C.E.D.Mo.E.D., 1889, 40 F. 1; Myers et al. v. Murray, Nelson & Co., C. C.S.D.Iowa, W.D., 1890, 43 F. 695, 11 L. R.A. 216; Baughman v. National Water-Works Company, C.C.W.D.Mo.W.D., 1891, 46 F. 4; Babcock & Wilcox Co. et al. v. Spaulding et al., etc., 1 Cir., 1936, 86 F.2d 256.
When federal jurisdiction depends exclusively on diversity of citizenship, a corporation can only be sued in the state of its incorporation or in the district of the plaintiff's residence. Southern Pacific Co. v. Denton, 1892, 146 U.S. 202, 13 S.Ct. 44, 36 L.Ed. 942.
This suit, therefore, was properly brought in the Eastern District of Louisiana.
The real question at issue is: Did plaintiffs have the legal right to bring the suit in the Baton Rouge Division, and should it now be transferred for trial to the New Orleans Division?
Under 28 U.S.C.A. § 114, when, by statute, a District contains more than one division, such as is the case with respect to the Eastern District of Louisiana, every suit (not of a local nature) against a single defendant must be brought in the division wherein he resides, unless such privilege be waived expressly or impliedly.
Since this provision only applies when a suit is brought within the District where the defendant actually resides, it has no application here in determining the question whether plaintiffs may maintain their present suit in the Baton Rouge Division, rather than in the New Orleans Division, of this Eastern District of Louisiana: the defendant foreign corporation does not reside in the District. Reich v. Tennessee Copper Co., D.C.E.D. Tennessee, S.D., 1913, 209 F. 880; Sartor et al. v. United Gas Public Service Co. Inc., D.C.W.D. Louisiana, Monroe Division, 1933, 3 F.Supp. 946; Sartor et al. v. Arkansas Nat. Gas. Co., D.C.W.D. Louisiana, Monroe Division, 1933, 7 F.Supp. 1016.
The suit here in question is not of a local nature, and it is against a single defendant; but the defendant does not "reside" in the Baton Rouge Division, nor within any other portion of the Eastern District. Gray v. Reliance Life Ins. Co. of Pittsburgh, et al., D.C.W.D. Louisiana, 1938, 24 F.Supp. 144; 23 American Jurisprudence, 524.
Plaintiffs' counsel, however, earnestly contend that, under Louisiana law, the defendant foreign corporation, for the purposes of this suit, has the domicile of the Secretary of State as its legal domicile, and that, therefore, the action was properly brought, and should be maintained, in the Baton Rouge Division, since that officer is domiciled in the City of Baton Rouge, and has been instituted the agent of the corporation for the service of process, by virtue of the Louisiana Act No. 105 of 1898.
This is clearly untenable, even if this court's decision, under the circumstances, were to be governed by Louisiana law; which it is not.
The general rule that, in civil matters, one must be sued at his domicile (Louisiana Code of Practice, Art. 162), gives way to various exceptions; as, for instance, those contained in paragraph 10 of Art. 165 of said Code ( Act No. 156 of 1934), viz.:
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