Parker Washington Co. v. Cramer

• Decision Date: 18 November 1912
• Docket Number: 1,858.
• Citation: 201 F. 878
• Parties: PARKER WASHINGTON CO. v. CRAMER.
• Court: U.S. Court of Appeals — Seventh Circuit

201 F. 878

PARKER WASHINGTON CO. v. CRAMER.

No. 1,858.

United States Court of Appeals, Seventh Circuit.

November 18, 1912

Sheppard Barclay, of St. Louis, Mo., for plaintiff in error.

B. J Wellman and P. L. McArdle, both of Chicago, Ill., Thomas T Fauntleroy and P. H. Cullen, both of St. Louis, Mo., for defendant in error.

Before BAKER, SEAMAN, and KOHLSAAT, Circuit Judges.

BAKER Circuit Judge.

Defendant in error, plaintiff below, filed his declaration in the Circuit Court of the United States for the Northern District of Illinois to recover damages for personal injuries alleged to have been sustained by him through the negligence of the defendant. Respecting jurisdiction on the ground of diversity of citizenship, the declaration alleged that the plaintiff was a citizen of Illinois, and that the defendant, a corporation, was a citizen of New Jersey. Without challenging the truth or the sufficiency of the jurisdictional averment, defendant went to trial upon the merits, and the jury returned a verdict for plaintiff, and the court thereupon entered the judgment to which this writ of error is addressed.

The record is barren of anything to sustain jurisdiction, except the averment in the declaration. Inasmuch as the fiction is not that the corporation itself is really a citizen, but that the stockholders are all citizens of the state which chartered the corporation, and that the corporation is a mere form through which such citizens are exercising their constitutional right of being heard in a federal court when the controversy is between citizens of different states, the approved from of allegation is that the defendant is a corporation organized and existing under the laws of the named state. From this formula of averment an irrebuttable presumption that the stockholders are citizens of the chartering state is held to arise. And, since the corporation itself cannot be in truth a citizen, an allegation that it is a citizen is inadmissible as a basis on which to found the aforesaid irrebuttable presumption. We are constrained, therefore, to hold that the averment of jurisdiction is bad, and to reverse the judgment for the want of any showing of jurisdiction. Lafayette Ins. Co. v. French, 18 How. 404, 15 L.Ed. 451; Knight v. Lutcher & Moore Lumber Co., 136 F. 404, 69 C.C.A. 248.

How far back must the proceedings in the trial court be torn up and held for naught? If defendant had raised in limine a question of the sufficiency of the jurisdictional averments, an amendment in due form would have been allowed at once. And, if defendant had filed a special plea to the jurisdiction on the ground that the controversy was not between citizens of different states, a trial of that issue of fact, and by a jury if defendant so desired, could have been had before defendant pleaded his defense to the cause of action and went to trial on the merits. Indeed, prior to Act March 3, 1875, c. 137, 18 Stat. 470 (U.S. Comp. St. 1901, p. 508), a defendant could only take issue on the averments of citizenship by a plea in abatement. But while the Act of 1875 leaves the question of jurisdiction open throughout the case and makes it the duty of the trial court and of reviewing courts, of their own motion, to be satisfied that jurisdiction exists, nevertheless the nature of the question of jurisdiction is inherently the same as it was prior to 1875; that is, it is a matter of abatement. It may end the instant suit, but does not touch or affect the cause of action.

If jurisdiction depended upon the presence or absence of an averment in the declaration respecting citizenship unquestionably we would be required to set aside all the proceedings in the trial court back to the declaration, with leave to the plaintiff to file an amended declaration. But jurisdiction in the trial court is not dependent upon the allegation, but upon the actual fact of diversity of citizenship. An undenied allegation in the declaration may be taken as truthfully presenting the facts; but, if the declaration is wholly deficient, jurisdiction nevertheless exists if the fact of diversity of...