Kidd v. Hilton of San Juan, Inc.

• Decision Date: 08 February 1966
• Docket Number: Civ. No. 380-65.
• Citation: 251 F. Supp. 465
• Parties: William KIDD, Plaintiff, v. HILTON OF SAN JUAN, INC., Clubman, Inc., and Corporación Hotelera de Puerto Rico, Defendants.
• Court: U.S. District Court — District of Puerto Rico

251 F. Supp. 465

William KIDD, Plaintiff, v. HILTON OF SAN JUAN, INC., Clubman, Inc., and Corporación Hotelera de Puerto Rico, Defendants.

Civ. No. 380-65.

United States District Court D. Puerto Rico, San Juan Division.

February 8, 1966.

COPYRIGHT MATERIAL OMITTED

Baker & Woods, San Juan, P. R., for plaintiff.

McConnell, Valdés & Kelley, Mario Canales Delgado, Correa Suárez, González Correa & Santos Correa, San Juan, P. R., for defendants.

CANCIO, District Judge.

This case is before us on motions by each of the defendants to dismiss the action for lack of jurisdiction under 28 U.S.C. 1332.

In the complaint, plaintiff averred that he is a citizen of the United States and a resident of the State of New Hampshire. He further asserted that the defendant Hilton of San Juan, Inc. is a corporation organized and existing under the laws of Delaware, being qualified to do business in the Commonwealth of Puerto Rico; and that defendants Clubman, Inc. and Corporación Hotelera de Puerto Rico are corporations organized and existing under the laws of the Commonwealth of Puerto Rico. Jurisdiction is claimed under 28 U.S.C. 1332.

Defendants rely on two arguments to deny diversity jurisdiction. In the first place, they insist that plaintiff, William Kidd, is actually a domiciliary of the Commonwealth of Puerto Rico. In the second place, defendants argue that the plaintiff is not the real party in interest; but that the real party in interest in Ponce de León Men's Shop, Inc., allegedly a de facto corporation which defendant would be estopped from denying.

Hearings were heard on the motions, evidence relating to the question of jurisdiction was received, and briefs were requested and presented.

1. The first question presented is whether or not plaintiff was a resident of the State of New Hampshire at the time this action began; or whether or not he was at that time a citizen of the Commonwealth of Puerto Rico.

Plaintiff has brought forth evidence to the effect that on August 23, 1965 he had already removed himself to the State of New Hampshire and that he did not intend to return to reside in Puerto Rico. This is partially in the form of a letter written by plaintiff on that date to his attorney.—Suit was filed on September 3, 1965.—He further offers as proof of his intention to be domiciled in New Hampshire hat he has withdrawn and closed his bank accounts in Puerto Rico; that he has given up his living quarters in Puerto Rico; that he sold his automobile and his household furniture; that what furniture was not sold was shipped to New Hampshire; that he has joined a Club in that State; that he has registered in a Church there; that he attempted to vote there but was unable to do it because of state residential requirements; that in New Hampshire he has submitted bids in order to get contracts on electrical engineering work, because he has made the decision of practicing privately his profession, electrical engineering; that he has opened bank accounts in New Hampshire.

Having considered all of these factors, including the letter (which might be thought of as self-serving), and having heard the plaintiff's testimony, which was perfectly credible to the Court, we must come to the conclusion that the plaintiff has in effect abandoned his domicile in Puerto Rico and has acquired domicile in New Hampshire, and that this event happened before the date the suit was filed.

To constitute "domicile", there must be both the fact of a fixed habitation or abode in a particular place and an intention to remain there permanently or indefinitely (animus manendi). Owens v. Huntling, 9 Cir., 115 F.2d 160. Residence in fact, coupled with the purpose to make the place of residence one's home, are the essential elements of domicile. Penn Mutual Life Ins. Co. v. Fields, D.C., 81 F.Supp. 54.

It appears from the arguments and the evidence brought forward that these two elements have been in existence at least since August 23, 1965. The fact that the plaintiff has returned to Puerto Rico in order to prosecute his claims, including the right to store space, are not indicative of an animus revertendi, for these claims, if substantiated, represent economic benefits which he can realize without having to return to Puerto Rico on a permanent basis. Once realized, these credits would be of a pecuniary value not only in Puerto Rico but also in New Hampshire and anywhere else.

Diversity is determined at the moment when the action is commenced. McNello v. John B. Kelly, Inc. (3rd Cir. 1960), 283 F.2d 96. Although this may not seem to be the best of rules, if the change is made with a bona fide intent to remain permanently, the motive of changing even if done in order to confer jurisdiction to this Court, is immaterial. Morris v. Gilmer, (1889), 129 U.S. 315, 9 S.Ct. 289, 32 L.Ed. 690. Be it as it may, as a matter of fact there is no evidence that could lead us to believe that that was his motive. On the contrary, he had plenty of motive to go back to his home state.

Hence, we conclude that the plaintiff's domicile is at present in the State of New Hampshire and that the jurisdiction of this Court can not be attacked on those grounds.

2. Defendant further contends that the real party in interest on the plaintiff's side is not plaintiff himself, the natural person, but rather "Ponce de León Men's Shop", which defendant claims is a de facto corporation.

Under the de facto doctrine, an organization may be held to be a corporation de facto where there has been a colorable attempt¹ to make it a corporation de jure. Hence, it is necessary that several requirements exist. These requirements are essentially three:

(a) the existence of laws under which the corporation might have been validly incorporated;

(b) a colorable attempt to comply with that law; and

(c) some use or exercise of the corporate privileges.

A corporation de jure is one created in strict or substantial conformity to the governing corporation statutes, and whose right to exist and act as such can not be successfully attacked in a direct proceeding by the state. Fletcher Cyclopedia Corporations. Sec....