Imperial Refining Co. v. Wyman

• Decision Date: 08 April 1889
• Parties: IMPERIAL REFINING CO. v. WYMAN et al.
• Court: U.S. District Court — Northern District of Ohio

38 F. 574

IMPERIAL REFINING CO. v. WYMAN et al.

United States Circuit Court, N.D. Ohio, Eastern Division.

April 8, 1889

Henderson Kline & Tolles, for plaintiff.

L. A Russell and John W. McVicker, for defendants.

HAMMOND J.

The plaintiff's declaration or petition avers that it is an incorporation duly organized under and by virtue of the laws of the state of Pennsylvania, and that the defendants are citizens of the state of Ohio. The answer admits that the defendants are citizens of Ohio but otherwise 'denies each and every allegation and averment of the said petition not above specifically admitted. ' It is conceded that under the practice in Ohio this general denial puts in issue the averments of the petition as to the incorporation, and under it the defendant has offered proof, subject to the exception of the plaintiff which has been reserved, tending to show that the plaintiff is not an incorporation at all under any law of Pennsylvania, but only a limited partnership, which is composed of persons unknown, who hold some 3,000 certificates of shares of interest in the capital of the concern; wherefore it is contended that the court has no jurisdiction, it not being shown that the averment of the plaintiff in that behalf is true. The plaintiff was organized under the Pennsylvania acts of 1874, entitled, in Brightley's Digest of Purdon's Laws of Pennsylvania for 1873-1878, p. 1891, 'Limited Partnerships,' which do indeed provide for an apparently different character of organized associations than those 'Corporations' provided for by another chapter of the same laws found under this latter title in the same digest at page 1839. Yet the plaintiff claims that, whatever distinctions there may be between the two classes of organizations, the laws under which it is organized give it a suable capacity and all other essential attributes necessary to create a 'corporation' to all intents and purposes within the purview of the laws of the United States regulating the jurisdiction of its courts over corporations; and the learned counsel cite the case of Insurance Co. v. Massachusetts, 10 Wall. 566, which was not, however, one involving the jurisdiction of the federal courts in its relation to corporations as 'citizens' of the states, and does not decide the point sought to be raised here, unless it may be inferentially; and it will be found, I think, that it is not safe always to infer very much, however naturally from such decisions upon a question like that suggested here, particularly in view of the dissenting opinion in that case. However, we are not at this moment called upon to decide that question, if it shall arise at all in this case. The objection of the plaintiff to the testimony is that it is incompetent and irrelevant to the issue made by the pleadings, because, it is urged, a general denial cannot, in the federal courts, raise this jurisdictional question, since a plea to the merits waives the matter of jurisdiction, if proper averments appear of record to confer it, which can only be challenged by a special plea in that behalf. Such was undoubtedly the law prior to the practice conformity act of 1872, and the judiciary act of 1875, (Rev. St. Sec. 914; 18 St. 472, § 5) and is still the law, notwithstanding those acts, in my opinion. And there is a good reason for it, found in the fact that in a certain but very particular and somewhat peculiar sense the federal courts are tribunals of limited jurisdiction; and the rule that the jurisdiction of all courts of limited powers in that general sense which is not at all applicable to the federal courts, must exhibit itself, has been applied to them nevertheless, and their jurisdiction must appear upon the technical record. So that, if we permit a mere general denial to put in issue these special averments of jurisdiction along with all other averments, we should have the jurisdictional facts tried and settled without any minute made of that issue upon the technical record, and there would be no showing whether the suit failed for want of jurisdiction in this limited tribunal or upon other grounds of a more formidable effect when passed into the general judgment. Therefore, if for no other reason, if the state courts, which are not troubled with this limited quality in their jurisdiction, have prescribed for them a different practice on this subject, the federal courts cannot, in the nature of the matter, adopt that practice, and it will be observed that the act of 1872 only requires us to conform to the state practice 'as near as may be,' which saying was inserted in the act for the very purpose of not embarrassing the courts of the United States with incongruous rules of state practice, such as that relied on here would be. Besides this, I find the decisions of the supreme court of the United States as uniform on this point since the practice conformity act of 1872 as before, though I find in them no mention of that act in its relation to this matter. D'Wolf v. Rabaud, 1 Pet. 476, 498; Society v. Pawlet, 4 Pet. 480, 501 Evans v. Gee, 11 Pet. 80, 83; Smith v. Kernochen, 7 How. 198, 216; Sheppard v. Graves, 14 How. 505, 512; Jones v. League, 18 How. 76, 81; Dred Scott v. Sandford, 19 How. 393, 400-403, 458, 472-475, 518, 532, 567-571,-- where this rule of federal pleading is fully and thoroughly discussed upon reason and authority; Spencer v. Lapsley, 20 How. 264; Railroad Co. v. Quigley, 21 How. 202; De Sobry v. Nicholson, 3 Wall. 420, 423; U.S. v. Insurance Cos., 22 Wall. 99, 100; Pullman v. Upton, 96 U.S. 328, 329; Express Co. v. Railroad Co., 99 U.S. 191, 198; Williams v. Nottawa, 104 U.S. 209; Farmington v. Pillsbury, 114 U.S. 138, 143, 5 S.Ct. 807; Hartog v. Memory, 116 U.S. 588, 6 S.Ct. 521. As to the act of 1875, Sec. 5, supra, one would suppose, after the decisions in Williams v. Nottawa, supra, and Farmington v. Pillsbury, supra, that this federal rule of pleading had been designedly changed, so that the court should, as the act seems to direct, dismiss a case whenever and however the want of jurisdiction might appear; and the latter of the above cases specifically says that 'the old rule established by the decisions, which required all objections to the citizenship of the parties, unless shown on the face of the record, to be taken by plea in abatement before pleading to the merits, was changed, and the courts were given full authority to protect themselves against the false pretenses of apparent parties. * * * It was intended to promote the ends of justice, and is equivalent to an express enactment by congress that the circuit courts shall not have jurisdiction of suits which do not really and substantially involve dispute or controversy, of which they have cognizance, nor of suits in which the parties have been improperly or collusively made or joined for the purpose of creating a case cognizable under the act. ' And the other case quite as emphatically declares that 'in extending a long way the jurisdiction of the courts of the United States, congress was specially careful to guard against the consequences of collusive transfers to make parties, and imposed the duty on the court, on its own motion, without waiting for the parties, to stop all further proceedings, and dismiss the suit the moment anything of the kind appeared.'

Now, it will be noticed that the fifth section of the act of 1875 makes no distinction in this careful guardianship of the jurisdiction, between those suits which 'do not really and substantially involve a dispute or controversy properly within the jurisdiction of said circuit court' and those in which 'the parties to said suits have been improperly or collusively made or joined, either as plaintiffs or defendants,' and commands the courts in either class to reject the jurisdiction in precisely the same terms. And so, on the authority of the act as interpreted in the two cases just mentioned, which involved the turpitude of collusive assignments, the circuit court, in Hartog v. Memory, 23 F. 835, in a case which involved no turpitude, but was a mistake, made 'in good faith,' as to the citizenship of the defendant, very naturally supposed that the rule of pleading as to the jurisdiction had been changed by the act of 1875, as the supreme court had said it was, and that it imposed the duty on the court, 'without waiting for the parties,' and 'on its own motion,' of dismissing the case if the facts developed a want of jurisdiction, as was directed in the extracts already made from ...