First Carolinas Joint Stock Land Bank of Columbia v. New York Title & Mortgage Co.

• Decision Date: 25 January 1932
• Citation: 59 F.2d 350
• Court: U.S. District Court — District of South Carolina
• Parties: FIRST CAROLINAS JOINT STOCK LAND BANK OF COLUMBIA v. NEW YORK TITLE & MORTGAGE CO.

59 F.2d 350 (1932)

FIRST CAROLINAS JOINT STOCK LAND BANK OF COLUMBIA v. NEW YORK TITLE & MORTGAGE CO.

District Court, E. D. South Carolina.

January 25, 1932.

Ervine F. Belser, of Columbia, S. C., for plaintiff.

Thomas, Lumpkin & Cain, of Columbia, S. C., for defendant.

GLENN, District Judge.

Plaintiff in this action is the First Carolinas Joint Stock Land Bank, chartered under the Farm Loan Act, title 12 USCA §§ 811-823, inclusive. Plaintiff has its principal place of business at Columbia, S. C. It is authorized to operate in South Carolina and the contiguous state of North Carolina.

The defendant is a corporation organized and existing under the laws of New York doing business in South Carolina, but nonresident thereto. Upon suit brought by the plaintiff against the defendant, the defendant has taken the formal steps necessary for removal to this court, United States District Court for the Eastern District of South Carolina. In its petition for removal, the defendant alleges among other things, that the plaintiff, First Carolinas Joint Stock Land Bank, is a citizen of South Carolina. From this it would necessarily follow that a diversity of citizenship is alleged between the plaintiff and defendant.

Of course, if the plaintiff is not a corporation which has its residence and citizenship for jurisdictional purposes in South Carolina, there is no diversity of citizenship, and a remand would necessarily follow.

Of course it is conceded by all that the citizenship of a corporation organized under an act of Congress does not make the corporation a citizen of any state. The general rule undoubtedly is that the citizenship of a federal corporation created to operate in one or more states is national only. Such a corporation has no state citizenship for jurisdictional purposes unless Congress so enacts.

We start with the familiar proposition that for many years it was consistently held that incorporation under the laws of the United States was a ground for giving a federal court original jurisdiction of such a corporation. This principle of law was brought down to date in the case of American Bank & Trust Company et al. v. Federal Reserve Bank of Atlanta, 256 U. S. 356, 41 S. Ct. 499, 65 L. Ed. 989. But since that date, to wit, by an Act of February 13, 1925, paragraph 12, title 28 USCA § 42, Congress took away jurisdiction on the ground of federal incorporation alone, so that the true situation seems now to be that a corporation organized under an act of Congress has no state citizenship for jurisdictional purposes unless Congress specifically declares such corporation to have a state citizenship.

Congress has declared that national banks shall be deemed to be citizens of the state where they operate. Congress has likewise vested Federal Intermediate Credit Banks with state citizenship. But a search of the Federal Farm Loan Act and amendments thereto (12 USCA) fails to show that Congress has anywhere vested Joint Stock Land Banks with a state citizenship. They must therefore be governed, for jurisdictional purposes, by the general rule. The general rule governing jurisdiction of corporations incorporated by or under acts of Congress is that laid down by the plain terms of the statute of February, 1925. This statute provides that "no district court shall...