Davila v. Hilton Hotels International

• Decision Date: 25 April 1951
• Docket Number: Civ. No. 6196.
• Citation: 97 F. Supp. 32
• Parties: DAVILA v. HILTON HOTELS INTERNATIONAL, Inc.
• Court: U.S. District Court — District of Puerto Rico

97 F. Supp. 32

DAVILA v. HILTON HOTELS INTERNATIONAL, Inc.

Civ. No. 6196.

United States District Court D. Puerto Rico. San Juan Division.

April 25, 1951.

Victor A. Coll, San Juan, P. R., for plaintiff.

McConnell & Valdes, San Juan, P. R., for defendant.

ROBERTS, District Judge.

The action here is for damages for defamation brought by plaintiff, a resident of Puerto Rico, against defendant, a corporation organized and existing under the laws of the State of Delaware. The suit was instituted in the District Court of Puerto Rico, San Juan Section, on March 12, 1951. The defendant corporation, on March 28, 1951, filed its petition for removal of the cause to this Court on grounds of diversity of citizenship within the meaning of Section 863 of Title 48, U.S.C.A. It appears from the record that the requisite diversity of citizenship does exist.

By virtue of Section 864 of Title 48, U. S.C.A., the provisions of law relating to the removal of causes from the courts of the several States to the courts of the United States, 28 U.S.C. §§ 1441-1450, are made applicable to the removal of causes from the courts of Puerto Rico to the District Court of the United States for Puerto Rico. It appears from the record that the petition for removal was timely, that there was a proper compliance with the provisions of law relating to the removal of causes, and, that the removal of this cause was properly accomplished.

On April 4, 1951, plaintiff moved for a remand of the cause to the District Court of Puerto Rico on ground that defendant, a foreign corporation, had qualified to do business in Puerto Rico in compliance with law regulating the doing of business therein by foreign corporations and had, thereunder, appointed an agent for the service of process in Puerto Rico and that, in so doing, had lost or waived its right to remove to this Court a cause instituted against it in an insular court.

There appears in the record a certificate, issued by the Acting First Assistant Secretary of Puerto Rico, wherein it is set forth that the defendant corporation, on July 12, 1948, complied with the provisions of insular law relating to the doing of business in Puerto Rico by foreign corporations and that "Mr. Frank G. Wangeman is the agent of said corporation in Puerto Rico, upon whom service of process may be made in accordance with Section 38 of our Private Corporation Act."

There is nothing in the record that indicates, nor did plaintiff contend, that defendant corporation had in any affirmative manner, or by any positive action, agreed to waive or relinquish its right to remove to the federal courts any cause of action brought against it in the insular courts. The contention of plaintiff is, in substance, that defendant corporation, by its compliance with the provisions of insular law relating to the doing of business in Puerto Rico by foreign corporations and by its appointment of an agent for service of process in Puerto Rico, gave its consent to be sued in the courts of Puerto Rico and thereby lost or waived its right to remove causes brought against it in the insular courts to the federal courts. This contention must be rejected.

It is well settled that when a foreign corporation complies with the provisions of state law regulating the right of foreign corporations to do business in that State and appointed an agent for the service of process therein, it thereby consents to be sued in the courts of such State, both state and federal. The authorities are clear that a federal district court within such State is a court of that State within the consent granted. Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 443, 66 S.Ct. 242, 90 L.Ed. 185; Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 309 U.S. 4, 6-7, 60 S.Ct. 215, 84 L.Ed. 537; Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 167-168, 60 S.Ct. 153, 84 L.Ed. 167.

It is equally well settled, however, that the mere grant of consent to be sued in the courts of a State by a foreign corporation as a condition on the right to do business therein, does not operate to deprive such corporation of its right to remove a cause brought against it in a court of that State to a federal court within that State. Mere compliance with statutes regulatory of the right of foreign corporations to do business within a State do not work a forfeiture of the right to remove when the prerequisite conditions therefor exist. The decisions uniformly hold that it is beyond the power of the States to impair the right to remove a cause on diversity grounds when the removal is timely and diversity does in fact exist. A statute which in terms purported to effect such a result would be unconstitutional. Harrison v. St. Louis & S. F. R. Co., 232 U.S. 318, 34 S.Ct. 333, 58 L.Ed. 621; Herndon v. Chicago, R. I. & P. Ry., 218 U.S. 135, 30 S.Ct 633, 54 L.Ed. 970; Southern Railway Co. v. Allison, 190 U.S. 326, 23 S.Ct. 713, 47 L.Ed. 1078; Stewart v. Ferer, 10 Cir., 163 F.2d 183, 185.

Plaintiff, in the instant case, urges that compliance with Section 38 of the Corporation Law of Puerto Rico, by defendant Corporation, constituted a waiver of its right to remove a cause from the insular to the federal courts. That a defendant may...