Celanese Corp. of America v. Vandalia Warehouse Corp.

• Citation: 424 F.2d 1176
• Decision Date: 15 April 1970
• Docket Number: No. 17786.,17786.
• Parties: CELANESE CORPORATION OF AMERICA and Federal Insurance Company, Plaintiffs-Appellees, v. VANDALIA WAREHOUSE CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

424 F.2d 1176 (1970)

CELANESE CORPORATION OF AMERICA and Federal Insurance Company, Plaintiffs-Appellees, v. VANDALIA WAREHOUSE CORPORATION, Defendant-Appellant.

No. 17786.

United States Court of Appeals, Seventh Circuit.

April 15, 1970.

Adolph K. Schwartz, St. Louis, Mo., Stanford S. Meyer, Belleville, Ill., Thomas W. Conklin, Upton, Conklin & Leahy, Chicago, Ill., of counsel, for appellant.

William B. Wham, Centralia, Ill., for appellees.

Before SWYGERT, Chief Judge, and KILEY and CUMMINGS, Circuit Judges.

CUMMINGS, Circuit Judge.

Plaintiff Celanese Corporation of America ("Celanese"), a New York corporation, sued the Vandalia Warehouse Corporation ("Vandalia") of Vandalia, Illinois, for failure to deliver to plaintiff 441 stored Columbia wood-pulp rolls. These goods were damaged by water while in defendant's custody. Federal Insurance Company ("Federal"), a New Jersey corporation, was joined as an additional party plaintiff, for it had paid Celanese for its loss and sued as subrogee. Defendant claimed that the damage was caused by an act of God, namely, a heavy wind and rainstorm. However, a jury verdict was rendered for plaintiffs, and a $16,224.25 judgment was entered for them, resulting in this appeal.

Jurisdiction

Defendant first argues that the trial court had no diversity jurisdiction because both plaintiffs, although foreign corporations, maintain "a principal place of business in the state of Illinois." This ground was raised after the trial, in a motion for judgment notwithstanding the verdict. An affidavit supporting that motion asserted that Federal had a Chicago office, was licensed to do business in Illinois and "was transacting a major amount of its insurance business" in Illinois in 1968. The affidavit also stated that Celanese was licensed to do business in Illinois, with four places of business in Chicago and its suburbs. No counter-affidavits were filed.

Section 1332(c) of the Judicial Code (28 U.S.C. § 1332(c)) provides:

"For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." (Emphasis supplied.)

The phrase "its principal place of business" in this statute refers to a corporation's single place of business (1 Moore's Federal Practice ¶ 0.773-1, p. 717.60 (1964)), and connotes its "center of corporate activity and * * * nerve center." Sabo v. Standard Oil Company of Indiana, 295 F.2d 893, 895 (7th Cir. 1961). The Celanese complaint alleged that its principal place of business was "in a state other than Illinois," and Federal's complaint alleged that its principal place of business was in the State of New York. These allegations were not controverted in the Answers, although the post-judgment Answer to the Federal complaint alleged that Federal had "a principal place of business in Illinois." At the oral argument here, defendant's counsel did not deny that the principal place of business of both Celanese and Federal was in New York. His affidavit does not show that either plaintiff had its principal place of business in Illinois. Under Section 1332(c) diversity of citizenship existed, and the district court therefore correctly denied the first ground of the motion for judgment notwithstanding the verdict.

Sufficiency of the Evidence

Defendant next urges that it was entitled to a directed verdict on the ground that the evidence showed that the damage was caused by a storm and not by its negligence. It is unquestioned that the goods of Celanese were delivered to Vandalia in good condition but were damaged by water on August 16, 1966, while stored in Vandalia's warehouse. It is well settled under Illinois law that these facts establish a prima facie case of negligence and shift the burden of proceeding to the bailee. 4 Illinois Law and Practice, "Bailments," § 19, p. 682 (1953). The ultimate burden of proof, however, remains on the bailor, and the bailee may rebut the presumption of negligence with evidence of due care. Miles v. International Hotel Co., 289 Ill. 320, 327-328, 124 N.E. 599 (1919); Clark v. Fields, 37 Ill.2d 583, 586, 229 N.E.2d 676 (1967). In this case, Celanese presented evidence of Vandalia's negligence which warranted submission of the case to the jury.

The evidence showed that the damage was caused by water entering the warehouse through a small opening in the roof. The roofing was only two years old and the building was periodically inspected. The roof was supported by horizontal beams supported by vertical columns. The beam ends rested in sockets or beam pockets in the brick walls. On the day of the accident one beam end slipped a few inches from a beam pocket, causing the roof to drop, with an attendant opening therein. On that day, there was a fifteen-minute windstorm with lightning and a downpour.

Plaintiffs' rebuttal evidence revealed that at the Vandalia airport, three miles from the warehouse, the maximum wind velocity on the critical date was 13.8 miles per hour, with gusts up to 20.7 miles per hour, and that rainfall totaled a little over two-tenths of an inch. Plaintiffs also showed that the vertical support columns beneath the beams were leaning in different directions. After the accident, the beam was put back in its pocket and a short timber post was placed under it for additional support.

Although the jury could have concluded that the roof opening was caused by lightning or wind damage, there was evidence that would permit it to find that the warehouse was in an unsafe condition and that the storm was only of foreseeable intensity.¹ Therefore, on the evidence admitted, a directed verdict for defendant was not warranted.

Misjoinder

Defendant also asserts that it was prejudiced by the participation of Celanese in the proceedings after the addition of Federal as the real party in interest. No objection was raised to the continuance of Celanese as a party to the proceedings at the time the plaintiffs moved for the addition of Federal. No motion to drop Celanese as an improper party was filed by defendants until after the culmination of the trial. Under Rule 21 of the Federal Rules of Civil Procedure, "Misjoinder of parties is not ground for dismissal of an action." The proper remedy is a timely motion to drop the improper party, and Vandalia therefore waived its objection to the continued presence of Celanese. Crest Auto Supplies, Inc. v. Ero Manufacturing Company, 360 F.2d 896, 898 (7th Cir. 1966); Ziegler v. Akin, 261 F.2d 88, 91 (10th Cir. 1958); see also Meyercheck v. Givens, 180 F.2d 221, 223 (7th Cir. 1950); 3A Moore's Federal Practice, ¶ 21.03, p. 2905 (1969). Moreover, the jury was presented with testimony showing that Celanese had filed its proof of loss with Federal and had subsequently been paid, so that there was no prejudice to defendant in retaining Celanese as a plaintiff.

Evidence

Vandalia also charges several errors in the conduct of the trial. Defendant first contends that the court erred in admitting into evidence plaintiffs' Exhibit 15, a report relating to surface weather conditions at Vandalia airport on the date of the storm. This exhibit was a photostatic copy of a document located in the Archives of the National Weather Records Center in Asheville, North Carolina. The copy bore the stamped statement, signed by a "Certifying Officer," that "this Form is a true copy of the official record of the Environmental Science Services Administration." Although offered as a certified copy of the original record, Exhibit 15 lacks the seal of any official of the United States Government. The testifying witness was not a federal employee and gave no evidence supporting the authenticity of the purported certification. No previous stipulation as to this document's authenticity existed and defendant objected on the grounds that this exhibit "was not properly identified, no proper foundation, and it purports to report incidents at a point three miles from this warehouse, which is too remote to have any bearing on the issues of this case."² We are therefore compelled to consider this fustian objection and conclude that because of the deficiency of the attempted certification, this document was not properly authenticated and should not have been admitted into evidence.

Rule 44 of the Federal Rules of Civil Procedure governs proof of official documents such as Exhibit 15. That rule contains specific standards for authentication of domestic records in paragraph (a) (1) as well as the further incorporation of existing federal and state law in paragraph (c).³ In this case, the absence of any appropriate seal from this exhibit precludes compliance with the procedures established in Rule 44(a) (1). See Van Cedarfield v. Laroche, 252 F.2d 817, 820-821 (1st Cir. 1958). In addition, Celanese has disclosed no statutory or common law rule, federal or state, which would dispose of the need of authentication as a requisite to the admission of a copy of an official document. Cf., e. g., 28 U.S.C. §§ 1732(b), 1733(b); Mullican v. United States, 252 F.2d 398, 400-404 (5th Cir. 1958); Yaich v. United States, 283 F.2d 613, 617 (9th Cir. 1960). Nor has Celanese produced any support for the authenticity of the certification of Exhibit 15 by the "Certifying Officer" without the affixation of the appropriate governmental seal of which judicial notice could be taken. See Smith v. United States, 30 U.S. (5 Pet.) 292, 300-301, 8 L.Ed. 130; cf. Ill.Rev. Stat., Ch. 51, §§ 16, 18 (1969); see also V, VII Wigmore, Evidence, §§ 1679, 2164 et seq. (1940); McCormick, Law of Evidence, § 186, p. 398 (Hornbook Series, 1954); Preliminary Draft of Proposed Rules of Evidence for the United States District Courts, Rule 9-02. The lack of any seal...