Central States Co-ops. v. Watson Bros. Transp. Co., 9291.

• Decision Date: 20 January 1948
• Docket Number: No. 9291.,9291.
• Citation: 165 F.2d 392
• Parties: CENTRAL STATES CO-OPS. v. WATSON BROS. TRANSP. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

165 F.2d 392 (1947)

CENTRAL STATES CO-OPS. v. WATSON BROS. TRANSP. CO.

No. 9291.

Circuit Court of Appeals, Seventh Circuit.

December 12, 1947.

Rehearing Denied January 20, 1948.

Theodore R. Sherwin, and Julius L. Sherwin, both of Chicago, Ill., for appellant.

Thomas G. McBride and Brenner & McBride, all of Chicago, Ill., for appellee.

Before EVANS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

MAJOR, Circuit Judge.

This appeal is from a judgment awarding to plaintiff the right to possession of certain property, in an action based upon the forcible entry and detainer statute of the State of Illinois. The judgment was entered upon a jury verdict directed by the court at the close of the defendant's evidence. The cause was instituted in the Municipal Court of the City of Chicago and removed on petition of the defendant to the District Court.

We are first met with the question of the jurisdiction of the District Court. This jurisdictional issue is raised in this court for the first time by the defendant, after having invoked the jurisdiction of the District Court and obtained an adverse judgment at its hands.

Plaintiff is a corporation and a citizen of the District of Columbia, while the defendant is a corporation and a citizen of the State of Nebraska. The court's jurisdiction, if such it had, is dependent upon Sec. 24 (1) of the Judicial Code, as amended by Congress in 1940, 54 Stat. 143, Act April 20, 1940, 28 U.S.C.A. § 41 (1), which so far as here material provides:

"The district courts shall have original jurisdiction as follows: First. Of all suits of a civil nature, * * * where the matter in controversy * * * (b) is between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory * * *."

The italicized portion of the provision just quoted was added by the amendment of 1940. More specifically, the court prior to the 1940 amendment had jurisdiction only of controversies between citizens of different states. By the amendment that jurisdiction was enlarged to include controversies between the citizen of a state and one of the District of Columbia.

A decision as to the jurisdictional issue is dependent solely upon the constitutionality of the 1940 amendment. This issue poses the question as to whether Congress was empowered to thus enlarge the jurisdiction of Federal courts.

We need no more than mention the firmly established rule that a jurisdictional question may be raised at any stage of the proceedings. In fact, it is the duty of a reviewing court on its own volition and irrespective of whether the question has been raised by the parties to examine into the matter of jurisdiction. Treinies v. Sunshine Mining Co., 308 U.S. 66, 70, 60 S.Ct. 44, 84 L.Ed. 85; Texas v. Florida, 306 U.S. 398, 405, 59 S.Ct. 563, 83 L.Ed. 817, 121, A.L.R. 1179. Jurisdiction cannot be waived; neither can it be acquired by assent of the parties. United States v. Corrick, 298 U.S. 435, 440, 56 S. Ct. 829, 80 L.Ed. 1263; Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 79 L.Ed. 338. Jurisdiction is subject to the same test where the case is before the court on removal from a State court as though it had been originally brought in the Federal court. Employers Reinsurance Corp. v. Bryant, 299 U.S. 374, 57 S.Ct. 273, 81 L.Ed. 289.

This ironclad rule takes no note of the apparent hardships and unfairness which its application may produce. Illustrative is the situation before us where the defendant, after invoking the jurisdiction of the Federal court, not only failed to call the attention of the court to the matter of its jurisdiction so that it might have an opportunity to rule thereon but raised no question until it had become the defeated party in the litigation. Plaintiff concedes that the jurisdictional question may be raised at any time but attempts to escape the rule by arguing that merely a constitutional question is presented which, like most other questions, cannot be raised for the first time on appeal. We need not cite or discuss the cases relied on by plaintiff in this respect for the reason that they are, in our judgment, beside the point. After all, the question here goes directly to the court's jurisdiction, and the fact that such jurisdiction involves the validity of the statute upon which it is predicated does not, in our judgment, impair the right of a litigant or the duty of the court on its own motion to consider and decide the issue. None of the cases called to our attention makes any distinction between a case where jurisdiction is dependent upon the constitutionality of a law and one where it rests upon any other basis.

Defendant contends that the sole power of Congress relative to the 1940 amendment is lodged in Art. III of the Constitution, which provides, so far as here material:

"Section 1. The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. * * *

"Section 2. The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, * * * to Controversies * * * between Citizens of different States * * *."

It has been firmly established, as plaintiff concedes, that a citizen of the District of Columbia is not a citizen of a State within the meaning of the constitutional article lastly quoted. Hepburn v. Ellzey, 2 Cranch 445, 2 L.Ed. 332; Barney v. Baltimore City, 6 Wallace 280, 18 L.Ed. 825; Hooe v. Jamieson, 166 U.S. 395, 17 S.Ct. 596, 41 L.Ed. 1049; O'Donoghue v. United States, 289 U.S. 516, 53 S.Ct. 740, 77 L.Ed. 1356. It, therefore, appears plain that the amendment of 1940 which conferred diversity jurisdiction of a controversy between a ctizen of a State and a citizen of the District of Columbia was in excess of the power granted by Art. III, which limited such jurisdiction to controversies between citizens of different states.

Plaintiff makes no argument to the contrary, in fact tacitly concedes that such is the situation, but contends that this excess power of Congress is to be found in Art. I, Sec. 8, which provides:

"The Congress shall have Power * * * Clause 17 To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, * * *.

"Clause 18 To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

It is argued that the power "To exercise exclusive Legislation in all Cases whatsoever, over such District" is sufficiently broad and comprehensive to permit Congress to provide for diversity jurisdiction between a citizen of the District of Columbia and one of a State, notwithstanding the limitation imposed by Art. III. It is urged that these two provisions of the Constitution must be construed together, and when so construed the requisite power exists for the 1940 amendment. The precise question before us has not been passed upon by the Supreme Court or by a Circuit Court of Appeals. It has, however, been given much attention and study by the District Courts, as is evidenced by the fact that the question has been considered, decided, and an opinion published by nine of such courts. The District Court of Virginia, in Winkler v. Daniels, 43 F.Supp. 265, and the District Court of California in Glaeser v. Acacia Mut. Life Ass'n, 55 F.Supp. 925, held the amendment constitutional. On the other hand, a District Court of Pennsylvania, in McGarry v. City of Bethlehem, 45 F. Supp. 385, a District Court of Missouri in Federal Deposit Ins. Corp. v. GeorgeHoward, 55 F.Supp. 921, a District Court of New York in Behlert v. James Foundation, etc., 60 F.Supp. 706, a District Court of Massachusetts in Ostrow v. Samuel Brilliant Co., 66 F.Supp. 593, a District Court of South Carolina in Wilson v. Guggenheim, 70 F.Supp. 417, a District Court of Maryland in Feeley v. Sidney S. Schupper Interstate Hauling System, D.C., 72 F.Supp. 663, and a District Court of Virginia in Willis v. Dennis, D.C., 72 F.Supp. 853, held the amendment unconstitutional. Thus is would seem that the District Courts of the country have experienced a "field day" in constitutional erudition. The score to date is two in favor of and seven opposed to constitutionality.

As a prelude to a consideration of the precise question before us, it may be pertinent to note two rather recent observations by the Supreme Court concerning Art. III (sometimes referred to as the Judiciary Article).

In Federal Radio Commission v. General Electric Co., 281 U.S. 464, at page 469, 50 S.Ct. 389, 390, 74 L.Ed. 969, the court, concerning its own jurisdiction, stated:

"It the Supreme Court was brought into being by the judiciary article of the Constitution, is invested with judicial power only, and can have no jurisdiction other than of cases and controversies falling within the classes enumerated in that article."

In Lockerty v. Phillips, 319 U.S. 182, at page 187, 63 S.Ct. 1019, 1022, 87 L.Ed. 1339, the court had before it a situation wherein Congress had restricted the jurisdiction of Federal courts in certain matters. The court stated:

"All federal courts, other than the Supreme Court, derive their jurisdiction wholly from the exercise of the authority to `ordain and establish' inferior courts, conferred on Congress by Article III, § 1, of the Constitution. Article III left Congress free to establish inferior federal courts or not as it thought appropriate. It could have declined to create any such courts, leaving suitors to the remedies afforded by state courts, with such appellate review by this Court as Congress might prescribe."

Plaintiff's...