Board of Levee Com'rs v. Hulse

• Decision Date: 18 February 1927
• Docket Number: No. 18659.,18659.
• Citation: 17 F.2d 785
• Parties: BOARD OF LEVEE COM'RS OF ORLEANS LEVEE DIST. v. HULSE et al.
• Court: U.S. District Court — Eastern District of Louisiana

17 F.2d 785 (1927)

BOARD OF LEVEE COM'RS OF ORLEANS LEVEE DIST. v. HULSE et al.

No. 18659.

District Court, E. D. Louisiana, New Orleans Division.

February 18, 1927.

Eberhard P. Deutsch, of New Orleans, La., for plaintiff.

W. J. Suthon (of Monroe & Lemann), of New Orleans, La., for defendant Globe Indemnity Co.

BURNS, District Judge.

The board of levee commissioners of the Orleans levee district is an agency of the state of Louisiana, created by the state Legislature by Act 93 of 1890, which provides that they are "constituted and created a body politic, with needful succession and corporate powers," having "power to sue and be sued in their corporate name, shall have a common seal, and shall have the franchise and power to do and perform all the purposes of this act, and to acquire, hold, own and convey all the property, real and personal, needful in the premises, and to alienate, mortgage and pledge the same for said purposes. The domicile of this board shall be in the city of New Orleans, where it shall be suable, and service of citation shall in all cases be made upon its president." Section 3.

The levee board filed this suit in the civil district court against one S. T. Hulse, a resident and citizen of Louisiana, and the Globe Indemnity Company, a corporation, citizen of the state of New York. Attached to the petition is a copy of the contract for certain levee work, upon which Hulse is alleged to have defaulted, and to the contract the bond is attached, under the terms of which the surety binds itself in solido with the contractor for the faithful performance of the contract.

The defendant surety company petitioned for and obtained an order for removal, whereupon the plaintiff moves for its remand to the state court. It is from the petition in its complete form that the cause of action and status of the parties must be determined, for the purpose of removal.

The first point made by plaintiff under the motion to remand proceeds upon the theory that it is only a nominal party; that the state of Louisiana, of which it is an agency, is the real party in interest; that the state courts, in other cases, have so recognized it, and relieved it of suit and from responsibility to a wider degree than individuals or other corporations might be; that, since the state of Louisiana is plaintiff, this court has no jurisdiction.

This point has been settled to the contrary in removal proceedings, where similar state agencies are incorporated and proceed in their corporate capacity. They are citizens of the state creating them, for the purpose of suits based on diverse citizenship in the federal court. Pearl River County v. Wyatt Lumber Co., 270 F. 26 (5 C. C. A.), and cases cited.

The defendant surety company contends that there is a separable controversy, viz. that the plaintiff's cause of action against its principal, Hulse, arises out of a contract for levee construction and is for $25,730.73; whereas that against itself is upon "the bond for $22,100 executed in connection with the aforesaid contract as required by the laws of Louisiana"; accordingly, that the first arises out of a conventional obligation, whereas the second arises out of a state statute, Act 224 of 1918, which is an act relating to contracts for public works. This contention is destroyed by the very terms of this act, which prescribes in detail for the method of contracting for public work, no less than for the method of...