Du Roure v. Alvord

• Decision Date: 16 February 1954
• Citation: 120 F. Supp. 166
• Parties: DU ROURE v. ALVORD et al.
• Court: U.S. District Court — Southern District of New York

120 F. Supp. 166

DU ROURE v. ALVORD et al.

United States District Court, S. D. New York.

February 16, 1954.

Bernard Bernstein, New York City, for plaintiff, Stanley D. Halperin, New York City, of counsel.

Cravath, Swaine & Moore, New York City, for defendant Ellsworth C. Alvord, Alfred McCormack, John J. O'Connell, New York City, of counsel.

Tompkins, Boal & Tompkins, New York City, for defendant E. F. Hutton & Co.

DIMOCK, District Judge.

Plaintiff, a citizen of France and resident of New York City, moves for a preliminary injunction. She seeks an order restraining defendant Alvord, a citizen of the United States and resident of Washington, D. C., from further asserting ownership in any of the shares of capital stock of Hekor Investment Holding Company, Ltd., a Canadian corporation (hereinafter referred to as "Hekor") and an order restraining defendant E. F. Hutton & Company, a New York partnership with partners residing in New York, New Jersey, California, Texas, Illinois and Connecticut, from recognizing such claim of defendant Alvord or acting upon his instructions and directions as owner of such stock. Defendant E. F. Hutton & Company, hereinafter referred to as "Hutton", cross-moves to dismiss the complaint as to it for failure to state a claim for relief against it. Defendant Alvord moves to dismiss for lack of jurisdiction and improper venue and that this court decline jurisdiction on the ground of forum non conveniens. These motions were argued together, and since the issues raised are inter-related, I treat them together.

The action is one for a declaratory judgment that defendant Alvord has no interest in the Hekor stock. There is but one party plaintiff and the only defendants are Alvord and the members of the partnership.

First I turn to the fundamental issues of jurisdiction and venue specifically raised by defendant Alvord's motion to dismiss.

Plaintiff alleges that her father owned all the capital stock of Hekor and that, upon his death in 1951, title to the stock vested in her as his heir. Defendant Alvord contends that the claim which plaintiff asserts against him is not a personal right of action, but rather a claim which belongs to the estate of her deceased father, and argues from this that a representative of the estate is the "real party in interest" in this suit. Defendant further contends that the New York ancillary administrator c. t. a. of the estate of plaintiff's deceased father is the real party in interest. That is one of the grounds of defendant Alvord's motion to dismiss.

Rule 17(a) of the Federal Rules of Civil Procedure, 28 U.S.C., provides, as here material: "Every action shall be prosecuted in the name of the real party in interest * * *." The "real party in interest" has been held to mean the party who, by the substantive law, has the right sought to be enforced. United States v. Allbaugh, D.C.D.Neb., 83 F. Supp. 109, 115; Capo v. C-O Two Fire Equipment Co., D.C.N.J., 93 F.Supp. 4, 6; Koepp v. Northwest Freight Lines, D.C.Minn., 10 F.R.D. 524, 526. See also 3 Moore's Federal Practice 1305 (2d ed.).

Plaintiff alleges that her father died domiciled in France and that, under the law of France, title to all of his property vested in her at the moment of his death. She argues that the New York courts would recognize her right to maintain this action because, under the New York conflict of laws rule, her title to the stock in suit would be determined by the law of France.

In a case not founded on a substantive federal right this court sits as another court of New York and is bound to apply the law of New York as to any matters which substantially affect the outcome of the action. See Guaranty Trust Co. v. York, 326 U.S. 99, 108-109, 65 S.Ct. 1464, 89 L.Ed. 2079; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477; Sampson v. Channell, 1 Cir., 110 F.2d 754, 128 A.L.R. 394, certiorari denied 310 U. S. 650, 761-762, 60 S.Ct. 1099, 84 L.Ed. 1415. Under the law of New York, plaintiff's allegation of title to personal property under the law of France would entitle her to maintain this action on her own behalf. See Berney v. Drexel, 33 Hun 34; Roques v. Grosjean, 66 N.Y.S. 2d 348; cf. Sultan of Turkey v. Tiryakian, 213 N.Y. 429, 108 N.E. 72. Therefore, defendant Alvord's attack on the ground that plaintiff is not the real party in interest fails.

Defendant Alvord also moves to dismiss the complaint on the ground that, even if this court has jurisdiction of the action, venue is improperly laid in this district because all the defendants do not reside in this district, and an alien plaintiff may sue only in the district in which all the defendants reside.

Section 1391(a) of the Judicial Code, Title 28 U.S.Code, provides: "A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside."

Plaintiff argues that this is a civil action in which jurisdiction is founded only on diversity of citizenship, that she is a "resident" of this district within the meaning of this provision, and that she is therefore entitled to bring this action in this district.

Defendant Alvord argues that this section does not apply to a suit between an alien and a citizen because such a suit is not "founded only on diversity of citizenship" and because an alien cannot be deemed a "resident" within the meaning of the provision.

The basic venue provision, which, with certain changes not here material, remained essentially intact until the 1948 revision of the Judicial Code, was first enacted on March 3, 1887. The portion here important provides: "* * * no civil suit shall be brought before either of said courts against any person by any original process of proceeding in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant". Act of March 3, 1887, c. 373 § 1, 24 Stat. 552-553. Thus, prior to 1948, the statutes explicitly limited the right of a plaintiff to sue in the district of his residence to the case in which jurisdiction was founded only on the fact that the action was between "citizens of different States". See Galveston, H. & S. A. R. Co. v. Gonzales, 151 U.S. 496, 506-507, 14 S.Ct. 401, 38 L.Ed. 248; Lehigh Valley Coal Co. v. Washko, 2 Cir., 231 F. 42; Vidal v. South American Securities Co., 2 Cir., 276 F. 855, 865. Accordingly an alien could maintain a suit in the federal courts against a citizen only in the district of the defendant's residence unless the defendant waived his privilege to be sued only in that district.

When the Judicial Code was revised in 1948, this language, "where the jurisdiction is founded only on the fact that the action is between citizens of different States," was changed to "wherein jurisdiction is founded only on diversity of citizenship". The rest of the provision remains substantially the same, i. e. the action may be brought "only in the judicial district where all plaintiffs or all defendants reside". 28 U.S.C. § 1391 (a). Plaintiff contends that, by making this change in language, Congress intended to change the pre-existing law that an alien had a right to maintain a suit against a citizen of a state only in the district of the residence of the defendant. The old statute said in substance that, where jurisdiction is founded "on the fact that the action is between citizens of different States," suit may be brought in the district of the residence of either the plaintiff or the defendant. The new statute described the class of cases where suit may be brought in the district of the residence of either the plaintiff or the defendant as: where jurisdiction is founded "on diversity of citizenship". Can it be said that an action brought by an alien against a citizen of a State is an action where jurisdiction is founded "on diversity of citizenship"? That is literally true of the case at bar since plaintiff is a French "citizen" and defendants are citizens of States. It would not be true if plaintiff's allegiance were to England because Englishmen are British "subjects", not British "citizens", Medvedieff v. Cities Service Oil Co., D.C.S.D.N.Y., 35 F.Supp. 999, a distinction recognized by the framers of the Constitution when they provided, in Article III, section 2, that the judicial power should extend to controversies between a state or the citizens thereof and foreign states, citizens "or subjects". Jurisdiction in an action such as...