Illinois State Trust Co. v. TERMINAL R. ASS'N OF ST. LOUIS, 18534.

• Decision Date: 05 April 1971
• Docket Number: No. 18534.,18534.
• Citation: 440 F.2d 497
• Parties: ILLINOIS STATE TRUST COMPANY, a Corporation, Guardian of the Estate of Daniel David Land, a Minor, and Arthur Land, Plaintiff-Appellants, v. TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, a Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

440 F.2d 497 (1971)

ILLINOIS STATE TRUST COMPANY, a Corporation, Guardian of the Estate of Daniel David Land, a Minor, and Arthur Land, Plaintiff-Appellants, v. TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, a Corporation, Defendant-Appellee.

No. 18534.

United States Court of Appeals, Seventh Circuit.

March 10, 1971.

Rehearing Denied April 5, 1971.

William B. Starnes, Karns, Starnes, Nester & Stegmeyer, Belleville, Ill., for plaintiffs-appellants.

Norman J. Gundlach, Roberts, Gundlach & Lee, Belleville, Ill., for defendant-appellee.

Before SWYGERT, Chief Judge, CUMMINGS and STEVENS, Circuit Judges.

SWYGERT, Chief Judge.

This is an appeal from the granting of defendant's motion for a directed verdict at the close of plaintiffs' evidence and the judgment entered thereon in a personal injury action removed to the district court pursuant to 28 U.S.C. § 1441(a) on the ground of diversity of citizenship, the jurisdictional amount-in-controversy requirement having been met. The cause of action arose out of an accident which occurred at the crossing of a public road over defendant's railroad right-of-way in Cahokia, Illinois, in which a young boy fell under the wheels of a railroad car while attempting to "hop a ride" on defendant's train, suffering serious injuries.^*

The facts before the trial court upon which the directed verdict was predicated are as follows. On March 30, 1969, David Land, then seven years of age, and Jimmy Bell, his friend of the same age, decided while playing together to ride Jimmy's bicycle to a service station in Cahokia "to get a drink." The two boys then set out for the Cargill Road railroad crossing nearby "to hunt for flares" — that is, to search the tracks for the red pyrotechnic flares sometimes used and carried by railroad men for signalling purposes. The boys were accompanied by "Snoopy," the Land family's dog. Jimmy hid his bicycle in the brush, and the two boys walked to the crossing. While they were drawing near to the crossing, defendant's train came to the crossing and stopped for about a minute so that a switch could be operated by the conductor to properly align the tracks for proceeding in the intended direction. The train then started up again. The two boys were apparently unobserved by any of the train crewmen at that time, although the engineer testified he saw one boy and a dog some distance from the tracks after the train was entirely past the crossing. As the train was passing through the crossing, Jimmy Bell climbed on a ladder at the rear of one boxcar. David Land then attempted to climb on a ladder at the front of the car immediately behind the one Jimmy was riding, but, as David attempted to board the train, "Snoopy," the dog, barked and jumped at the boy causing him to trip. David fell beneath a railroad car within a few feet of the crossing and suffered serious injuries to his left leg and right foot.

Also before the court was testimony that children had found partially burned flares along the tracks and had been given flares by railroad crewmen from time to time. Several children testified that if they stood near defendant's tracks at the crossing and elsewhere and called to the crewmen to throw them some flares, their efforts were rewarded more often than not by compliance with their requests. They further testified that the flares were sometimes thrown to them from the engine but more often came from the caboose. There was also testimony that children had hopped rides on trains at the crossing and elsewhere. However, there was no testimony that any of the crewmen on the train involved in this accident had ever given away flares or observed children hopping rides on trains in or near Cahokia. Two crewmen testified that they had observed children playing in the vicinity of the Cargill Road crossing — indeed, the switchman had reported that fact to his supervisor — but there is nothing in the record to indicate that the railroad had knowledge of any fact which would indicate that the Cargill Road crossing was particularly dangerous or that children were playing on the tracks or dangerously close thereto.

Plaintiffs raise two issues on this appeal: (1) did the district court err in denying their motion to remand the cause to the state court from which it was removed and (2) did the district court err in granting defendant's motion for a directed verdict, considering the foregoing evidence? We affirm the decision of the district court as to both issues.

I

Plaintiffs contend that the district court should have granted their motion to remand the action to the state court from which it was removed because diversity of citizenship between the parties was lacking; hence the district court was without subject matter jurisdiction. This argument is based on the theory that defendant was a citizen of Illinois for diversity purposes as are all of the plaintiffs. We agree with the district court that the defendant is a citizen of Missouri and that the motion to remand was without merit.

Pursuant to 28 U.S.C. § 1332(c), a corporation, for purposes of diversity jurisdiction, is a citizen of both the state of its incorporation and the state which is the situs of its principal place of business. The evidence shows that the defendant is a Missouri corporation, that its general offices and headquarters are located in Missouri, that its shareholders and board of directors hold all of their meetings in Missouri, that the vast majority of its officers have their offices in Missouri, that all its basic corporate records are kept in Missouri, that all its tax returns are prepared in and filed from Missouri, and that all its banking is conducted in Missouri. It is thus clear that Missouri is the only state of defendant's citizenship, despite the defendant's extensive operations in Illinois. Celanese Corp. of America v. Vandalia Warehouse Corp., 424 F.2d 1176 (7th Cir. 1970); Sabo v. Standard Oil Co., 295 F.2d 893 (7th Cir. 1961).

II

Plaintiffs further contend that the trial court's direction of the verdict against them was erroneous. Although there is disagreement among the circuits as to whether a federal standard for direction of verdicts or a state standard applies in diversity cases, e. g., Boeing Co. v. Shipman, 411 F.2d 365, 368 n. 2 (5th Cir. 1969), it is settled that in this circuit the applicable state standard applies. Wieloch v. Rogers Cartage Co., 290 F.2d 235, 237-238 (7th Cir. 1961). It is undisputed that Illinois law governs this cause of action, and the Illinois standard for direction of verdicts has recently been clarified. As the Illinois Supreme Court stated in Pedrick v. Peoria & E. R. R., 37 Ill.2d 494, 510, 229 N.E.2d 504, 513-514 (1967):

In our judgment verdicts ought to be directed and judgments n. o. v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.

Our inquiry thus...