Chicago, R. I. & P. Ry. Co. v. Stephens

• Citation: 218 F. 535
• Decision Date: 08 December 1914
• Docket Number: 2492.
• Parties: CHICAGO, R.I. & P. RY. CO. v. STEPHENS.
• Court: U.S. Court of Appeals — Sixth Circuit

218 F. 535

CHICAGO, R.I. & P. RY. CO. v. STEPHENS.

No. 2492.

United States Court of Appeals, Sixth Circuit.

December 8, 1914

[Copyrighted Material Omitted]

S. P Walker, of Memphis, Tenn., for plaintiff in error.

H. E Taylor, of Memphis, Tenn., for defendant in error.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

WARRINGTON Circuit Judge.

The railroad company seeks to reverse a judgment and set aside a verdict recovered against it for personal injuries sustained by Mrs. Stephens. The action was originally brought by Mrs. Stephens against the Chicago, Rock Island & Pacific Railroad Company and the receivers of the Missouri & North Arkansas Railroad Company. The receivers appeared specially by motion to dismiss the action as to them and their company, on the grounds that the company did not own or operate a railroad in Tennessee, and that the service attempted to be made upon them was insufficient. The motion was granted as to service, and Mrs. Stephens then filed an amendment to her declaration, stating her complaint against the Chicago, Rock Island & Pacific Railroad Company alone.

1. Jurisdiction. Although eleven assignments are presented with the writ of error, defendant's counsel in their brief attempt to waive all of them except the first, sixth, and eleventh. This waiver is effective without doubt, save as to the second. That assignment is based upon a claim of error in entering judgment against defendant 'for the reason that it does not appear in proof' that defendant 'was a nonresident of the state of Tennessee,' and upon the further claim that the declaration alleges that defendant 'was a resident of the state of Arkansas, but fails to allege that it was a nonresident of Tennessee. ' It is the duty of the court to consider the question thus presented, in spite of the failure of counsel to argue it or the effort to waive it, because jurisdiction cannot be acquired by consent, nor be presumed; it must affirmatively appear upon the face of the record. M.C. & L.M. Ry. Co. v. Swan, 111 U.S. 379, 382, 4 Sup.Ct. 510, 28 L.Ed. 462; Thomas v. Board of Trustees, 195 U.S. 207, 211, 25 Sup.Ct. 24, 49 L.Ed. 160; Nichols Lumber Co. v. Franson, 203 U.S. 278, 282, 27 Sup.Ct. 102, 51 L.Ed. 181; Chi., B. & Q. Ry. Co. v. Willard, 220 U.S. 413, 419, 31 Sup.Ct. 460, 55 L.Ed. 521. Jurisdiction was invoked and rested only on the ground of diversity of citizenship. It is plain enough from the pleadings and proofs that Mrs. Stephens is a citizen of Tennessee and a resident of Memphis; but difficulty arises with respect to the Rock Island Company. It is alleged in the declaration that the company is 'a corporation existing and doing business in the state of Arkansas and Tennessee,' and, in the amendment, that the company 'is a citizen of the state of Arkansas; * * * that the said railroad company is a corporation * * * operating a line of railroad from Wheatley, Ark., into Memphis, Tenn.' In the summons issued against the railroad it is stated that the Rock Island Company is 'a citizen of (the) state of Arkansas. ' Nothing further appears in the record tending to show the corporate character or place of origin of the company; indeed, these facts do not seem to have been regarded as important elements of the issues. The trouble with the allegations of the declaration is that they would not, if admitted, be sufficient under the authorities to justify taking jurisdiction of the action; for they charge that the company is 'a corporation existing and doing business in the state of Arkansas and Tennessee. ' This might be true, and still the corporation might not have been created under the laws of either of those states, or it might have been only in virtue of the laws of Tennessee of which state the plaintiff is a citizen. The allegations of the amendment, however, amount to an assertion that the company is a corporation and a citizen of the state of Arkansas, and, if admitted, it might be said with much show of reason that this is tantamount to alleging that the company was organized as a corporation under and according to the laws of Arkansas; for in no other way could the corporation be a 'citizen' of that state within the meaning of the federal jurisdictional clauses touching controversies or suits of a civil nature 'between citizens of different states' article 3, Sec. 2, Const.; section 24, Judicial Code. ^[1] Still, the corporate character of defendant is neither admitted nor proved here; and according to the controlling decisions an allegation that a corporation is a citizen of a given state is not sufficient to show jurisdiction. La Fayette Ins. Co. v. French, 59 U.S. (18 How.) 404, 405, 15 L.Ed. 451; Muller v. Dows, 94 U.S. 444, 445, 27 L.Ed. 207. See, also, American Sugar Refining Co. v. Johnson, 60 F. 503, 511, 9 C.C.A. 110 (C.C.A., 5th Cir.); Atlantic Coast Line Co. v. Whilden, 195 F. 263, 115 C.C.A. 254 (C.C.A., 5th Cir.); Parker Washington Co. v. Cramer, 201 F. 878, 879, 120 C.C.A. 216 (C.C.A., 7th Cir.); United States v. New York S.S. Co., 216 F. 61, 63, 132 C.C.A. 305 (C.C.A., 2d Cir.). ^[2] What disposition then should be made of the case? If, after verdict and judgment and while the case was in control of the court below, the plaintiff had sought to amend her declaration by appropriate and definite allegations, and to show that the Rock Island Company was in truth a corporation created in accordance with the laws of Arkansas, she would no doubt have been given opportunity to cure the defect in question. Mexican Central Railway v. Duthie, 189 U.S. 76, 77, 23 Sup.Ct. 610, 47 L.Ed. 715. It is true that the Chief Justice said in the course of the opinion in that case that if the petition had remained as it was originally framed, and the case had been carried to the Circuit Court of Appeals, that court 'would have been constrained to reverse the judgment and remand the cause for a new trial, with leave to amend'; but the orders of reversal in the cases there referred to seem to have been to remand the causes 'for further proceedings,' and not in terms for new trial (and see Denny v. Pironi, 141 U.S. 121, 124, 11 Sup.Ct. 966, 35 L.Ed. 657, and citations); and it is not perceived why the reversal of the judgment should necessarily include the setting aside of the verdict. Permitting the verdict to stand in a case like this and reversing the judgment, only to remand the cause with permission to frame and try an issue of fact with respect alone to diversity of citizenship, would no more deprive the defendant of the right of trial by jury than was done in the Duthie Case, just cited (Parker Washington Co. v. Cramer, supra, 201 F. 880, 120 C.C.A. 216; Toledo Traction Co. v. Cameron, 137 F. 48, 54, 55, 69 C.C.A. 28 (C.C.A., 6th Cir.); McEldowney v. Card (C.C.) 193 F. 475, 483, by Sanford, District Judge); and the trial court could then exercise its powers under section 954 of the Revised Statutes (Comp. St. 1913, Sec. 1591) as completely as the trial court did in the Duthie Case. Such a course as this is sanctioned even in criminal cases, where the sentence is erroneous. Ballew v. United States, 160 U.S. 187, 202, 203, 16 Sup.Ct. 263, 40 L.Ed. 388; Haynes v. United States, 101 F. 817, 820, 42 C.C.A. 34 (C.C.A., 8th Cir.); Whitworth v. United States, 114 F. 302, 305, 52 C.C.A. 214 (C.C.A., 8th Cir.); Mitchell v. United States, 196 F. 874, 878, 116 C.C.A. 436 (C.C.A., 9th Cir.). True, in the instant case no attempt was made by counsel in the court below, and none has been made here, to provide for curing the defect; it scarcely need be said that in such circumstances the defect cannot be cured in this court (Fred Macey Co. v. Macey, 135 F. 725, 729, 68 C.C.A. 363 (C.C.A., 6th Cir.)); and we cannot pursue a course here like the one we have this day adopted in La Belle Box Co. v. Stricklin, 218 F. 529, 134 C.C.A. 257. We have the impression, however, that the facts will warrant the amendment and show the required diversity; for (a) the assignment of error touching jurisdiction is, as we have seen, based simply upon the absence of proof that the Rock Island 'was a nonresident of the state of Tennessee,' which of course is entirely consistent with the organization of the company in another state (and see Butterfield v. Miller, 195 F. 200, 204, 205, 115 C.C.A. 152 (C.C.A., 6th Cir.)), and (b) in attempting to waive assignments, as before indicated, counsel for defendant frankly state in their brief that: 'After careful consideration the defendant is of the opinion that none of these other assignments are well taken, and will therefore not burden the court with a discussion of them.'

We are therefore constrained to believe that the case should be considered upon its merits, with the purpose of avoiding another trial if reversible error is not found and diversity of citizenship in fact existed. Atlantic Coast Line R. Co. v. Whilden, supra, 195 F. 263, 115 C.C.A. 254; Atchison, T. & S.F. Ry. Co. v. Gilliland, 193 F. 608, 611, 113 C.C.A. 476 (C.C.A., 9th Cir.); Newcomb v. Burbank, 181 F. 334, 336, 337, 104 C.C.A. 164 (C.C.A., 2d Cir.); Parker Washington Co. v. Cramer, supra, 201 F. 880, 881, 120 C.C.A. 216. We are the more content to adopt this course because defendant appears to have presented its full defense upon the merits, and, upon proper amendment below, will be given opportunity to contest the jurisdictional issue.

2. The Merits. According to allegations of the declaration and proofs offered, the Missouri & North Arkansas Railroad Company operates a line of railroad between Crosby and Wheatley, Ark., and the Chicago, Rock Island & Pacific Railroad Company a line between Wheatley and Memphis. Mrs Stephens, to whom we shall hereafter refer as 'plaintiff,' purchased of the ticket agent stationed in the depot of the...