Hartford Fire Ins. Co. v. Erie R. Co.

• Decision Date: 26 May 1909
• Citation: 172 F. 899
• Parties: HARTFORD FIRE INS. CO. v. ERIE R. CO.
• Court: U.S. District Court — Southern District of New York

172 F. 899

HARTFORD FIRE INS. CO. v. ERIE R. CO.

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

May 26, 1909

This is an action to recover damages for the destruction by fire of certain houses in the village of South Lima, Livingston county, N.Y., by sparks projected from the defendant's engines. At the close of the plaintiff's opening the defendant moved to dismiss the action upon three separate grounds: First, under section 657 of the Revised Statutes (U.S. Comp. St. 1901, p. 529), for want of jurisdiction because the causes of action arose in territory formerly included in the Northern district of New York; second because the jurisdiction of this court had been procured through collusion, under Act March 3, 1875, c. 137, 18 Stat 470 (U.S. Comp. St. 1901, p. 507Sec.; and, third, because the causes of action were not assignable at common law.

The complaint sets up seven causes of action. In the second cause of action the complaint alleges that the defendant, by its negligent emission of sparks and fire from its locomotive set fire to the house of one Tamar Y. Ryers, and that the house burned down, causing her a loss of $4,423.67; that for this loss she was partly insured by two insurance companies; that the two insurers have paid a part of the loss upon the policies; and that both insured and insurers have assigned their claims to the plaintiff. In each of the other six causes of action the plaintiff alleges that the defendant set fire negligently to the house of Tamar Y. Ryers, and that the fire, on account of a high wind blowing at the time, spread itself to the dwelling, near by, of the plaintiff's assignor. The plaintiff alleges in each case the payment to the insured of the whole or a part of the loss by insurance companies, among which, in two instances, the plaintiff was itself one to an aggregate sum of $1,750. In each cause of action the pleader alleges that the insured and insurers assigned all claims against the defendant to the plaintiff. The total aggregate of claims for damages done by the defendant to all the buildings amounts to $36,561.16.

The plaintiff is a foreign insurance company, but the only individual or corporation assignors which are nonresidents of the state of New York are the Aetna Fire Insurance Company, which has paid losses aggregating $3,793.75, and the London Assurance Company, which has paid a loss of $923.67. The defendant is a New York corporation. The assigned claims of the Aetna Fire Insurance Company are divided up between the third, fourth, and seventh causes of action, being $717.75 on the third, $2,376 on the fourth, and $700 on the seventh. The plaintiff itself paid $150 upon the loss set forth in the third cause of action and $1,600 upon that in the fifth. The claim of the London Assurance Company is in the second cause of action.

McGuire & Wood, for plaintiff.

Stetson, Jennings & Russell, for defendant.

HAND District Judge (after stating the facts as above).

Three questions are presented: First, the jurisdiction of this court under section 657 (U.S. Comp. St. 1901, p. 529); second, the jurisdiction under Act March 3, 1875, c. 137, 18 Stat. 470 (U.S. Comp. St. 1901, p. 507); third, whether the complaint sets up a good cause of action. The last is not a jurisdictional question.

I understand the plaintiff concedes that, if the former Northern district of New York had not been subdivided, this action could not be entertained by the Circuit Court for the Southern district of New York, for it is a case of original jurisdiction; and no one contends, I think, that the cause of action did not arise in the territory comprised within the old limits of the Northern district of New York. If so, the case would have been strictly within the prohibition of the statute, and the defendant could not confer jurisdiction on this court by waiver. The plaintiff, therefore, bases, or must base, its claim entirely upon the theory that the division of the former Northern district of New York under Act May 12, 1900, c. 391, 31 Stat. 175 (U.S. Comp. St. 1901, p. 394), into two districts, changed the meaning of section 657, so that it applied only to that territory which has since 1900 been comprised within the new Northern district of New York.

Congress intended, by dividing the districts, to create new facilities for the dispatch of judicial business in the territory comprised within the old district, and it cannot have intended to throw some of the litigation which formerly belonged in the Northern district of New York upon the Southern district of New York. This necessarily results, if the plaintiff is right, and if actions arising within a part of the former Northern district can now be tried in the southern district, though formerly they could not. Certainly nothing has arisen since the year 1818 which made it desirable to increase the jurisdiction of the Southern district of New York, whose proper work has so greatly increased since that time. Least of all was that desirable at the very moment when the capacity of the former Northern district was doubled by the addition of a new District Judge. So far as the reasonable purpose of an enactment guides its interpretation, this act will not bear the plaintiff's construction.

Aside from the purpose of the act, it is quite clear to me that the words 'Northern district of New York' must be read as though they meant 'territorial limits of the present district. ' It is the locality of the cause of action which is to determine jurisdiction, and it is fair to construe the limits as only a convenient mode of designating a fixed territory. No doubt the significance of general terms in an act will change, as those terms may themselves be varyingly described by other acts from time to time. The punishment for larceny means the punishment for what the Legislature may from time to time make larceny. The phrase 'Northern district of New York' is not a general term. It described, when it was used, a definite territory, as though it had used metes and bounds. It is quite true that the descriptive term has since been given another meaning; but that does not change the particular legislative intent to include just the territory, properly described in 1818 by that description, for, as I have said, it was the locus of origin of the wrong that excluded it from the jurisdiction of this court. It cannot be assumed that this intention changed when the old district was divided.

Although the statute has never been construed in this respect, I think the Circuit Court is without jurisdiction of any of the causes of action, and I will dismiss the complaint as to all upon the first ground raised.

Upon the second ground I will deny the motion as to the third fourth, and seventh causes of action, and grant it as to the rest. Upon the plaintiff's opening he frankly stated that all the assignments had been obtained without consideration and were held practically in trust for the assignors; that is to say, the proceeds, or some portion of them, were to be turned back to the assignors in the event of success. This would very clearly constitute a collusive assignment, under Farmington v. Pillsbury, 114 U.S. 138, 5 Sup.Ct. 807, 29 L.Ed. 114, Lehigh Mining Co. v. Kelly, 160 U.S. 327, 16 Sup.Ct. 307, 40 L.Ed. 444, Lake County Commissioners v. Dudley, 173 U.S. 243, 19 Sup.Ct. 398, 43 L.Ed. 684, and Waite v. Santa Cruz, 184 U.S. 302, 22 Sup.Ct. 327, 46 L.Ed. 552; and if all the claims were obtained in this way it would be my duty to dismiss the complaint as to all seven causes of action. But there are other considerations which apply to ...