Nutt v. General Motors Acceptance Corporation of Indiana, Nos. 709

CourtUnited States Supreme Court
Writing for the CourtHUGHES
Citation80 L.Ed. 1135,56 S.Ct. 780,298 U.S. 178
Decision Date18 May 1936
Docket NumberNos. 709,710
PartiesMcNUTT, Governor of Indiana, et al. v. GENERAL MOTORS ACCEPTANCE CORPORATION OF INDIANA, Inc

298 U.S. 178
56 S.Ct. 780
80 L.Ed. 1135
McNUTT, Governor of Indiana, et al.

v.

GENERAL MOTORS ACCEPTANCE CORPORATION OF INDIANA, Inc.

Nos. 709, 710.
Argued April 1, 1936.
Decided May 18, 1936.

Appeal from the District Court of the United States for the Southern District of Indiana.

Page 179

Messrs. Philip Lutz, Jr., Atty. Gen., Joseph W. Hutchinson, Asst. Atty. Gen., and Leo M. Gardner, of Indianapolis, Ind., for appellants.

Messrs. John Thomas Smith, Phillip W. Haberman, and Duane R. Dills, all of New York City, and Paul Y. Davis, of Indianapolis, Ind., for appellee.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

Respondent, General Motors Acceptance Corporation of Indiana, brought this suit to restrain the enforcement of chapter 231 of the Acts of 1935 of the General Assembly of Indiana. That act provides for the regulation of the business of purchasing contracts arising out of retail installment sales, including provisions for licenses, for classifications of contracts, and for fixing maximum 'finance charges.' The validity of the act was challenged as depriving respondent of its property without due process of law and denying it the equal protection of the laws in violation of the Fourteenth Amendment of the Federal Constitution. An interlocutory injunction was sought and, upon hearing by three judges (28 U.S.C. § 380, 28 U.S.C.A. § 380), a final decree was entered, upon findings of facts and conclusions of law, granting a permanent injunction. No opinion was rendered. The case comes here by direct appeal.

The question arises whether the matter in controversy exceeds the sum or value of $3,000, exclusive of interest and costs, so as to give the District Court jurisdiction. Jud.Code, § 24(1), 28 U.S.C. § 41(1), 28 U.S.C.A. § 41(1). The complaint alleged that the requisite amount was involved and this

Page 180

allegation was denied by the answer. On the argument in this Court, leave was given to file an additional brief upon the question of jurisdiction and respondent has submitted its brief accordingly.

Respondent points to the allegations of its bill that the 'net worth' of its business exceeds $50,000; that in 1934 it purchased retail installment contracts in Indiana aggregating in excess of $7,000,000; that the value of such purchases for the first six months of 1935 was in excess of $4,000,000; and that during 1934 respondent purchased in Indiana approximately 23,000 installment sales contracts from more than 500 retail dealers. These allegations were sustained by the findings of the District Court. The bill also alleged that respondent maintained offices in Indiana for which it paid yearly an aggregate rental of $13,147; that it employed on the average 85 employees whose aggregate annual salaries amounted to about $150,000. Respondent also refers to its allegations that the act limits the amount which respondent 'may receive as its gross profit for the purchase of an installment contract to a sum not exceeding the maximum 'finance charge' which may be fixed by the Department of Financial Institutions,' by prohibiting respondent 'from purchasing any retail installment contracts at a less price than the unpaid balance thereon'; that the act limits the amount which may be given by respondent 'to retail sellers out of the gross 'finance charge' received from retail buyers under installment sale contracts' sold to respondent, by requiring the Department 'to fix this maximum amount without regard to any differentiation as between contracts sold to licensees by retail sellers with recourse against such sellers, and contracts sold by retail sellers without recourse against them'; and that in other respects the statute imposes burdensome requirements which impair the 'efficiency of the operations and earnings' of respondent.

Page 181

Respondent invokes the principle that jurisdiction is to be tested by the value of the object or right to be protected against interference. Hunt v. New York Cotton Exchange, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. 821; Bitterman v. Louisville & Nashville R. Co., 207 U.S. 205, 28 S.Ct. 91, 52 L.Ed. 171, 12 Ann.Cas. 693; Berryman v. Board of Trustees of Whitman College, 222 U.S. 334, 32 S.Ct. 147, 56 L.Ed. 225; Glenwood Light Co. v. Mutual Light Co., 239 U.S. 121, 36 S.Ct. 30, 60 L.Ed. 174; Healy v. Ratta, 292 U.S. 263, 54 S.Ct. 700, 78 L.Ed. 1248. But in the instant case, the statute does not attempt to prevent respondent from conducting its business. There is no showing that it cannot obtain a license and proceed with its operations. The value or net worth of the business which respondent transacts in Indiana is not involved save to the extent that it may be affected by the incidence of the statutory regulation. The object or right to be protected against unconstitutional interference is the right to be free of that regulation. The value of that right may be measured by the loss, if any, which would follow the enforcement of the rules prescribed. The particular allegations of respondent's bill as to the extent or value of its business throw no light upon that subject. They fail to set forth any facts showing what, if any, curtailment of business and consequent loss the enforcement of the statute would involve. The bill is thus destitute of any appropriate allegation as to jurisdictional amount save the general allegation that the matter in controversy exceeds $3,000. That allegation was put in issue and the record discloses neither finding nor evidence to sustain it.

In the absence of any showing in the record to support that general allegation, the question is upon which party lay the burden of proof. Respondent contends that the burden of proving the lack of jurisdiction rests upon the party challenging the jurisdiction and cites decisions of this Court to that effect. The question is thus sharply presented.

Page 182

The jurisdiction of the District Court in a civil suit of this nature is definitely limited by statute to one—'where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and (a) arises under the Constitution or laws of the United States, or treaties made, or which shall be made, under their authority, or (b) is between citizens of different States, or (c) is between citizens of a State and foreign States, citizens, or subjects.' Jud.Code, § 24(1), 28 U.S.C. § 41(1), 28 U.S.C.A. § 41(1).

Further, the Act of March 3, 1875, c. 137, § 5 (18 Stat. 472) as now applied to the District Courts (Jud.Code, § 37, 28 U.S.C. § 80, 28 U.S.C.A. § 80), explicitly charges those courts with the duty of enforcing these jurisdictional limitations. The provision in its present form is as follows: 'If in any suit commenced in a district court, or remove from a State court to a district court of the United States, it shall appear to the satisfaction of the said district court, at any time after such suit has been brought or removed thereto, that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of said district court, or that the parties to said suit have been improperly or collusively made or joined, either as plaintiffs or defendants, for the purpose of creating a case cognizable or removable under this chapter, the said district court shall proceed no further therein, but shall dismiss the suit or remand it to the court from which it was removed, as justice may require, and shall make such order as to costs as shall be just.'

It is incumbent upon the plaintiff properly to allege the jurisdictional facts, according to the nature of the case.' 'Where the law gives no rule, the demand of the plaintiff must furnish one; but where the law gives the rule, the legal cause of action, and not the plaintiff's demand, must be regarded.' Wilson v. Daniel, 3 Dall.

Page 183

401, 407, 408, 1 L.Ed. 655; Barry v. Edmunds, 116 U.S. 550, 560, 6 S.Ct. 501, 29 L.Ed. 729; Vance v. W. A. Vandercook Co. (No. 2), 170 U.S. 468, 481, 18 S.Ct. 645, 42 L.Ed. 1111; Lion Bonding Co. v. Karatz, 262 U.S. 77, 85, 86, 43 S.Ct. 480, 67 L.Ed. 871. Where the pleadings properly alleged the jurisdictional facts, as, for example, with respect to diversity of citizenship and jurisdictional amount, it was necessary at common law, and before the passage of the act of 1875, to raise the issue of want of jurisdiction by plea in abatement. And where the jurisdictional issue was thus raised, the burden of proof was upon the defendant. The objection was waived by pleading to the merits. D'Wolf v. Rabaud, 1 Pet. 476, 498, 7 L.Ed. 227; Sheppard v. Graves, 14 How. 505, 510, 14 L.Ed. 518; De...

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4627 practice notes
  • Ramirez v. Allstate Vehicle & Prop. Ins. Co., CIVIL ACTION NO. 7:20-cv-00211
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 29, 2020
    ...2003).32 Manguno v. Prudential Prop. & Cas. Ins. Co. , 276 F.3d 720, 723 (5th Cir. 2002) ; accord McNutt v. Gen. Motors Acceptance Corp. , 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936).33 Howery v. Allstate Ins. Co. , 243 F.3d 912, 916 (5th Cir. 2001).34 Sharkey v. Quarantillo , 541......
  • Community Ins. Co. v. Rowe, No. C-3-98-422.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • August 12, 1999
    ...the burden of establishing the existence of federal subject matter jurisdiction. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). This is no less true where, as here, it is the defendant, rather than the plaintiff, who seeks the fe......
  • Smith v. Abbate
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • December 13, 1961
    ...defendant, the plaintiff bears the burden of supporting the allegations by competent proof. McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 188-189 56 S.Ct. 780, 784, 785, 80 L.Ed. 1135; KVOS, Inc. v. Associated Press, 299 U.S. 269, 278 57 S.Ct. 197, 200, 81 L.Ed. 183; Gibbs v. Bu......
  • Gomez v. Wilson, No. 71-1484.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 23, 1973
    ...at notes 43-46. 39 See text infra at notes 45-57. 40 See text infra at notes 58-70. 41 E. g., McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Louisville & N. R.R. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908); King Bridge C......
  • Request a trial to view additional results
4626 cases
  • Ramirez v. Allstate Vehicle & Prop. Ins. Co., CIVIL ACTION NO. 7:20-cv-00211
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 29, 2020
    ...2003).32 Manguno v. Prudential Prop. & Cas. Ins. Co. , 276 F.3d 720, 723 (5th Cir. 2002) ; accord McNutt v. Gen. Motors Acceptance Corp. , 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936).33 Howery v. Allstate Ins. Co. , 243 F.3d 912, 916 (5th Cir. 2001).34 Sharkey v. Quarantillo , 541......
  • Community Ins. Co. v. Rowe, No. C-3-98-422.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • August 12, 1999
    ...the burden of establishing the existence of federal subject matter jurisdiction. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). This is no less true where, as here, it is the defendant, rather than the plaintiff, who seeks the fe......
  • Smith v. Abbate
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • December 13, 1961
    ...defendant, the plaintiff bears the burden of supporting the allegations by competent proof. McNutt v. General Motors Acceptance Corp., 298 U. S. 178, 188-189 56 S.Ct. 780, 784, 785, 80 L.Ed. 1135; KVOS, Inc. v. Associated Press, 299 U.S. 269, 278 57 S.Ct. 197, 200, 81 L.Ed. 183; Gibbs v. Bu......
  • Gomez v. Wilson, No. 71-1484.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 23, 1973
    ...at notes 43-46. 39 See text infra at notes 45-57. 40 See text infra at notes 58-70. 41 E. g., McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Louisville & N. R.R. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908); King Bridge C......
  • Request a trial to view additional results
1 books & journal articles
  • The Development of Regulation
    • United States
    • ANNALS of the American Academy of Political and Social Science, The Nbr. 196-1, March 1938
    • March 1, 1938
    ...of the finance 4 charge, the This statute is discussed in the case of Mc- amount of any other Nutt v. General charge specifying Motors, 298 U. S. 178. its Chap. 474; amended in 1937, purpose, the net balance due from chaps. 377 and 417. the buyer, the terms of the payment of 188 such net ba......

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