Baumgarten v. Alliance Assur. Co., Ltd., of London, England

• Decision Date: 17 April 1907
• Docket Number: 14,234.
• Citation: 153 F. 301
• Parties: BAUMGARTEN et al. v. ALLIANCE ASSUR. CO., LIMITED, OF LONDON, ENGLAND.
• Court: U.S. District Court — Northern District of California

153 F. 301

BAUMGARTEN et al. v. ALLIANCE ASSUR. CO., LIMITED, OF LONDON, ENGLAND.

No. 14,234.

United States Circuit Court, N.D. California.

April 17, 1907

Edward Lynch and Bertin A. Weyl, for plaintiffs.

T. C Van Ness, for defendant.

DE HAVEN, District Judge.

This is an action to recover a personal judgment against the defendant, an alien corporation, upon certain policies of insurance against fire, executed and delivered by it to the plaintiffs in the city of San Francisco, state of California. The amount sued for exceeds, exclusive of costs and interest the sum of $2,000. The action was originally commenced in the superior court of the city and county of San Francisco, in this state, and the defendant within the time allowed by law to plead to the complaint appeared in the state court demurred to the complaint, and at the same time filed its petition for removal of the case to this court, as provided in Act March 3, 1887, c. 373, 24 Stat. 552, as corrected and amended by Act August 13, 1888, c, 866, 25 Stat. 433 (U.S Comp.

St. 1901, p. 508). In its petition for removal the defendant alleges that when the suit was commenced, and at the date of filing such petition, the plaintiffs were and are citizens of the state of California, and that the defendant 'was and still is a citizen of, and a corporation duly organized and existing under and by virtue of the laws of, and a resident of, the United Kingdom of Great Britain and Ireland. ' Upon the filing of the petition and giving the bond required by law, the state court made an order removing the case into this court, and plaintiffs have moved to remand the same to the state court.

It is provided in section 1 of the act above referred to that:

'The Circuit Courts of the United States shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, * * * in which there shall be a controversy between citizens of different states, * * * or a controversy between citizens of a state and foreign states, citizens, or subjects.'

And it is further provided in section 2 of the same act that all such suits then pending, or which may be subsequently brought in any state court, 'may be removed into the Circuit Court of the United States for the proper district by the defendant or defendants therein, being nonresidents of that state.'

As before stated, the petition for removal of the case to this court alleges that the defendant is a corporation organized and existing under and by virtue of the laws of the United Kingdom of Great Britain and Ireland, and a resident of that kingdom. This is a sufficient allegation that the defendant is a nonresident of this state, if an alien corporation doing business in the state and having a branch office therein for the purpose of the transaction of such business is in the sense of the law to be deemed a resident of the country under whose law it was created and exists; and whether it is to be so regarded or not is the only question presented by the motion to remand. It has been held by the Supreme Court in a long line of decisions that a corporation organized under the laws of any of the United States is, in contemplation of law, a citizen and resident of the state in which it was incorporated. In Bank of Augusta v. Earle, 13 Pet. 519, 10 L.Ed. 274, the court, in speaking upon this subject, said:

'It (the corporation) must dwell in the place of its creation, and cannot migrate to another sovereignty. But, although it must live and have its being in that state, yet it does not by any means follow that its existence there will not be recognized in other places; and its residence in one state creates no insuperable objection to its power of contracting in another.'

This is quoted with approval in Shaw v. Quincy Mining Company, 145 U.S. 444, 12 Sup.Ct. 935, 36 L.Ed. 768; the court saying:

'This statement has been often reaffirmed by this court, with some change of phrase, but always retaining the idea that the legal existence, the home, the domicile, the habitat, the residence, the citizenship of the corporation, can only be in the state by which it was created, although it may do business in other states whose laws permit it.'

It is claimed by the plaintiffs that this rule is not applicable to an alien corporation, and that such a corporation may properly be held to be a resident of any state where it has an office and engages in the transaction of business through local agents. This was so decided in Miller v. Eastern Oregon Gold Mining Company (C.C.) 45 F. 348, and in Gilbert v. New Zealand Ins. Co., 49 F. 884, 15 L.R.A. 125. The argument in support of this proposition is thus stated in Miller v. Eastern Oregon Gold Min. Co. (C.C.) 45 F. 348, just cited:

'It is not probable that Congress intended to give a corporation, the subject of a foreign state, engaged in business, with a local habitation in the United States, the option of suing a citizen of the United States in a national court, and to deny such citizen having a controversy with or a

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