Beneficial Industrial Loan Corporation v. Kline, Civ. No. 153.

• Decision Date: 16 October 1941
• Docket Number: Civ. No. 153.
• Parties: BENEFICIAL INDUSTRIAL LOAN CORPORATION et al. v. KLINE et al.
• Court: U.S. District Court — Southern District of Iowa

41 F. Supp. 854

BENEFICIAL INDUSTRIAL LOAN CORPORATION et al. v. KLINE et al.

Civ. No. 153.

District Court, S. D. Iowa, Central Division.

October 16, 1941.

J. R. McManus and M. H. Johnson, both of Des Moines, Iowa, for plaintiff.

Edward E. Baron and A. H. Bolton, both of Sioux City, Iowa, and Joseph I. Brody, of Des Moines, Iowa, for defendant Kline.

John M. Rankin, Atty. Gen., and Floyd Philbrick, 1st Asst. Atty. Gen., for defendant Melvin W. Ellis, Supt. of Banking.

DEWEY, District Judge.

The action is brought to enjoin Earl L. Kline from using the trade name of Personal Finance Company, and to enjoin Melvin W. Ellis, Superintendent of Banking of the State of Iowa, from continuing a permit or license to the said Kline to do business in Iowa under said name. The complaint alleges that the plaintiffs are citizens and residents of the State of Delaware, but does not allege the residence or citizenship of either of the defendants.

To this complaint the defendant Earl L. Kline files three motions: First, to drop as party plaintiff the Beneficial Industrial Loan Corporation; second, to dismiss or transfer the action to the Northern District of Iowa; and, third, to drop Melvin W. Ellis, Superintendent of Banking of the State of Iowa, as party defendant.

These motions came on for hearing in open court at Des Moines, Iowa, on the 11th day of October, 1941.

During the arguments the plaintiffs asked leave to file an amendment to the petition and to set out the residence and citizenship of the parties defendants. This request was denied by the court pending consideration of the motions.

It is claimed, but not in the petition, that the jurisdiction of this court is based upon diversity of citizenship only.

Arguments of the defendant Kline that the case should be dismissed because of the failure of the plaintiff to set out the citizenship of the defendants is answered by Section 274c of the Judicial Code, Sec. 399, Title 28, U.S.C.A., providing that the plaintiff has the right, where he has failed to set out in his petition the citizenship of the defendants, to amend his pleading to so show, if he can, and that, if such jurisdiction is thus shown, the action shall be continued as though the diversity of citizenship had been fully and completely pleaded at the inception of the suit.

The parties have confused the question of jurisdiction and venue. From arguments it is apparent that the defendants are citizens of the State of Iowa and the plaintiffs are non-residents with citizenship in Delaware, and that the amount in controversy exceeds $3,000. These facts confer jurisdiction and, as the plaintiff is entitled to file his amendment showing these facts, and, if he does so, the jurisdiction relates back to the time of the filing of the original petition, then there is no question but that this court would have jurisdiction.

The bothersome question is whether or not it has venue of the defendant Kline. The venue statutes for consideration are Sections 112 and 113 of Title 28, U.S.C. Section 112, so far as important here, provides: "* * * 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."

This statute confines the jurisdiction of actions in personam to the district in which the defendant is an inhabitant, and there is no exception to the rule. Ladew v. Tennessee Copper Co., 218 U.S. 357, 31 S.Ct. 81, 54 L.Ed. 1069; Seaboard Rice Milling Co. v. Chicago, R. I. & P. R. Co., 270 U. S. 363, 46 S.Ct. 247, 70 L.Ed. 633; Putnam v. Ickes, 64 App.D.C. 339, 78 F.2d 223, 224.

Section 113, so far as important, provides: "When a State contains more than one district, every suit not of a local nature, in the district court thereof, against a single defendant, inhabitant of such State, must be brought in the district where he resides; but if there are two or more defendants, residing in different districts of the State, it may be brought in either district, * * *."

This is a suit in personam and not of a local nature, so that, very definitely, the venue, where the defendants are residents of the same state, is extended to any district of a state in which one of the defendants resides.

One of the motions of the defendant Kline recites that he is a resident of Sioux City, Iowa, which is not within the Southern District of Iowa, and in argument it was the claim of the plaintiff that Melvin W. Ellis, Superintendent of Banking, is a resident of the Southern District of Iowa because of the provisions of Section 9130 of the Code of Iowa, 1939, providing that the office of the Superintendent of Banking shall be at the seat of government, which is at Des Moines, but it is well known that Mr. Ellis is a resident of the Northern District of Iowa, and, under this situation, it appears to the court,...