Hough v. Societe Electrique Westinghouse De Russie

• Decision Date: 06 March 1916
• Citation: 231 F. 341
• Parties: HOUGH v. SOCIETE ELECTRIQUE WESTINGHOUSE DE RUSSIE et al.
• Court: U.S. District Court — Southern District of New York

231 F. 341

HOUGH v. SOCIETE ELECTRIQUE WESTINGHOUSE DE RUSSIE et al.

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

March 6, 1916

This is an action originally brought in the Supreme Court of the state of New York against a French corporation doing business in Russia and Robert H. McCarter, who was appointed its liquidator by resolution of the shareholders at a general meeting held in the city of Paris on the 30th day of June 1913. At the proper time the defendants filed a petition for removal in the state court, with the necessary bond, setting forth that the action had been commenced on the 27th of January, 1915, by service of the summons upon the defendant McCarter, the liquidator of the corporation, at 71 Broadway in the city of New York, and that thereafter, on the 8th day of March, 1915, a copy of the verified complaint was served upon the attorneys for the defendant, who had appeared specially for the purpose of removing and dismissing. The petition then alleged that the controversy was between the plaintiff, who was a citizen of New York, the defendant company, and McCarter, who was a citizen of the United States, resident in the city of London, and that the allegation in the complaint that McCarter was a citizen of the state of New York was false and fraudulent. The petition likewise alleged that the cause of action was for breach of a contract entered into in Russia between the plaintiff and the defendant company through McCarter, who was then its president; that the corporation still existed and had not been dissolved; that McCarter, as its liquidator, had no title to the assets; that the company had no assets in the state of New York, and had never transacted any business there, and that under the laws and customs of France the function and powers of McCarter as liquidator were simply those of an attorney in fact or general agent, to collect the assets, pay the debts, and wind up the affairs; that McCarter was acting in pursuance of the resolution aforesaid, and not under any statute or common law of the republic of France. The petition further alleged that the plaintiff had fraudulently and improperly joined McCarter as liquidator for the sole purpose of preventing removal to this court, and that the plaintiff in the complaint did not set forth facts sufficient to constitute a cause of action against McCarter as liquidator, who was therefore not a necessary or proper party, the controversy being wholly between the plaintiff and the French corporation.

The order of removal was made in the state court. The plaintiff moves to remand the case to the Supreme Court, and the defendants to dismiss the suit against both defendants-- against the corporation on the ground that no jurisdiction could be acquired over it, and against the defendant McCarter upon the ground that as liquidator, in which capacity alone he is joined, no cause of action is shown against him. In support of both motions the parties submitted extended affidavits relating to the law of France, designed to show that the defendant McCarter, as liquidator, could or could not be sued outside the republic of France and that the service was therefore void.

Charles K. Carpenter, of New York City, for plaintiff.

M. W Wynne and H. E. Chapin, both of New York City, for defendants.

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

The first question to be considered is the motion to remand, for if that should be granted this court has no jurisdiction to pass on the question of the validity of the service against McCarter. McCarter's testimony shows that he is a citizen of the United States, and alleges that he resides in London England; that he came to New York shortly after the outbreak of the Great War, and is now temporarily sojourning in New York on that account. He does not rest his right of removal upon the fact that he is a citizen of any of the states, for the record is barren of any evidence upon that score. One may be a citizen of the United States, and yet not be a citizen of any state. The Slaughter House Cases, 16 Wall. 36, 74, 21 L.Ed. 394. Yet, under sections 24 and 28 of the Judicial Code, no case may be removed, unless the defendants are citizens of some other state than the plaintiff. As the citizenship in another state of McCarter has not been shown, and as the jurisdiction of this court must be proved, the motion to remand must be disposed of in precisely the same way as though he was in fact a citizen of New York, of which the plaintiff is a citizen.

Therefore the motion to remand is good, unless McCarter can show that he has been joined with the fraudulent purpose of preventing a removal into this court. Upon this issue he must show more than...