Patten v. Dodge Mfg. Corporation, No. 20.

CourtNew York District Court
Writing for the CourtSLICK
Citation23 F.2d 852
PartiesPATTEN v. DODGE MFG. CORPORATION.
Decision Date20 January 1928
Docket NumberNo. 20.

23 F.2d 852 (1928)

PATTEN
v.
DODGE MFG.
CORPORATION.

No. 20.

District Court, D. Indiana, South Bend Division.

January 20, 1928.


William J. Peck, of Peoria, Ill., for plaintiff.

Parker, Crabill, Crumpacker & May, of South Bend, Ind., for defendant.

SLICK, District Judge.

Plaintiff is a citizen of Illinois. Defendant is a corporation organized under the laws of the state of Delaware. When defendant was incorporated it took over the assets of a number of corporations, among them being one having a very similar name, to wit, the Dodge Manufacturing Company. The name of defendant is Dodge Manufacturing Corporation.

The Dodge Manufacturing Company owned and operated for many years a large manufacturing establishment in the city of Mishawaka, St. Joseph county, Indiana. It became heavily involved and owed something like $2,000,000, and in 1922 a reorganization was made, and it was decided to incorporate a new corporation to take over all the assets of the Dodge Manufacturing Company and its subsidiaries, to be named the Dodge Manufacturing Corporation.

It was further decided to incorporate this new corporation under the laws of the state of Delaware, instead of Indiana, for the reason that counsel for the company believed the laws of Delaware more favorable than the laws of Indiana. When the defendant was organized, it had 100,000 shares of common stock, no par, and 25,000 shares of preferred stock, of the par value of $100 each.

Immediately after its incorporation, it proposed to the Dodge Manufacturing Company to take over all the assets and assume the liabilities of that company, and to issue to the stockholders of that company 10 shares of common stock of the Dodge Manufacturing Corporation for each share of common stock of the Dodge Manufacturing Company, and to issue one share of preferred stock of the new company for each share of preferred stock of the old. This proposal was accepted, and the stock was exchanged on that basis. The total assets of the Dodge Manufacturing Company, eliminating holdings in capital stock of certain subsidiary companies, were between $6,000,000 and $7,000,000.

The old corporation, the Dodge Manufacturing Company, practically went out of existence, although it was not dissolved,

23 F.2d 853
and the new organization, the Dodge Manufacturing Corporation, continued its business. The main office, the manufacturing plant, and the executive offices are all located in Mishawaka, Indiana. The company maintains an office in Wilmington, Delaware, with the Corporation Trust Company, which company has for its main business the incorporating of corporations in the state of Delaware, and when it incorporates a company from a foreign state it permits, for a small consideration, such corporation to maintain its corporation office with it. The defendant pays the Corporation Trust Company $100 a year for this service

Immediately after its incorporation, defendant filed application to be permitted to do business in Indiana under the Foreign Corporations Act of Indiana (Burns' Ann. St. Ind. 1926, §§ 4909-4930), and in its application represented its property and assets employed in its business in the state of Indiana as amounting to $5,919,376, the same being the property and assets of the Dodge Manufacturing Company, an Indiana corporation, and, in consequence of said application, defendant was licensed to do business in Indiana, and has continuously operated in Indiana under such license.

Defendant filed what it calls "a motion to dismiss in the nature of a plea," in which it challenges the jurisdiction of the court, for the reason that the bill discloses that the jurisdiction is dependent upon diversity of citizenship, and said plea alleges that defendant is not a citizen of Indiana, as set up in the bill, but is a corporation and citizen of the state of Delaware.

Defendant relies upon section 51 of the Judicial Code (28 USCA § 112), which, among other things, provides that, "where the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or the defendant." Defendant insists that, according to this provision, the defendant, a citizen of the state of Delaware, is not suable in the federal court for the district of Indiana by the plaintiff, a citizen of Illinois.

There are two reasons which appear strongly to justify this court in holding that this suit is maintainable in the federal court for the district of Indiana.

First. It is eminently fair, just, and right that the defendant, although incorporated in the state of Delaware, should be regarded as an inhabitant or resident of this district (where its factory is located and where it transacts all its business) for purposes of jurisdiction. It is permanently located here, is identified with the business and the people of this state, and would seem to have a fixed residence or habitat in the state of Indiana. It does here exactly what it would do if it had been incorporated under and received its charter from the state of Indiana.

In this connection the language of Justice Harlan in U. S. v. Southern Pac. R. Co. (C. C.) 49 F. 297, 304, seems peculiarly appropriate. In that case the court used the following language: "It seems to the court that a corporation of a state, * * * holding such close relations with the business and people of another state, may, within a reasonable interpretation of the act of 1887, be deemed an `inhabitant' of the latter state for all purposes of jurisdiction in personam by the courts held there, although a corporation is, and, while its corporate existence lasts, must remain, a `citizen' only of the state which gave it life."

In this case Justice Harlan goes into this subject exhaustively and points out the decisions on this subject, holding that, "while a corporation is domiciled in the state by whose laws it was created, its legal existence in that state may be recognized elsewhere," and that, "for the purposes of jurisdiction in the courts of the United States, a corporation is to be deemed a citizen of the state creating it, and no averment to the contrary is permitted," and that "a corporation of one state, by engaging in business or acquiring property in another state, does not thereby cease to be a citizen of the state creating it."

Justice...

To continue reading

Request your trial
5 practice notes
  • Neirbo Co v. Bethlehem Shipbuilding Corporation, No. 38
    • United States
    • United States Supreme Court
    • November 22, 1939
    ...Co., 7 Cir.,1926, 12 F.2d 596. 17 Shainwald v. Davids, D.C.N.D.Cal.,1895, 69 F. 704; Patten v. Dodge Mfg. Co., D.C.D.Ind.,1928, 23 F.2d 852, affirmed, 7 Cir., 1932, 60 F.2d 676; Oklahoma Packing Co. v. Oklahoma Gas & Elec. Co., 10 Cir.,1938, 100 F.2d 770. 18 Originally enacted as c. 687......
  • McLean v. State of Mississippi, No. 8739.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • May 12, 1938
    ...383; and Standard Stoker Co. v. Lower, D. C., 46 F.2d 678, 683. Contrary rulings may be found in Patten v. Dodge Mfg. Corporation, D.C., 23 F.2d 852, and O'Donnell v. Slade, D.C., 5 F.Supp. 265, but neither notices the decision in Southern Pac. Co. v. Denton, The fact that the United States......
  • Toulmin v. James Mfg. Co., No. 2235.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Western District of New York
    • May 8, 1939
    ...which are urged as holding to the contrary are United States v. Southern Pacific R. Co., C.C., 49 F. 297; Patten v. Dodge Mfg. Co., D.C., 23 F.2d 852; Dodge Mfg. Co. v. Patten, 7 Cir., 60 F.2d 676; Riddle v. New York, L. E. & W. R. Co., C.C., 39 F. 290, and Consolidated Store-Service v.......
  • Ward v. Studebaker Sales Corporation, No. 7227.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 8, 1940
    ...see Dobie, Federal Procedure 483; but see contra, Shainwald v. Davids, D.C.,N.D. Cal., 69 F. 704; Patten v. Dodge Mfg. Corp., D.C.Ind., 23 F.2d 852, reversed on other grounds, 7 Cir., 60 F.2d 676; Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 10 Cir., 100 F.2d 2 Venue of Actions ......
  • Request a trial to view additional results
5 cases
  • Neirbo Co v. Bethlehem Shipbuilding Corporation, No. 38
    • United States
    • United States Supreme Court
    • November 22, 1939
    ...Co., 7 Cir.,1926, 12 F.2d 596. 17 Shainwald v. Davids, D.C.N.D.Cal.,1895, 69 F. 704; Patten v. Dodge Mfg. Co., D.C.D.Ind.,1928, 23 F.2d 852, affirmed, 7 Cir., 1932, 60 F.2d 676; Oklahoma Packing Co. v. Oklahoma Gas & Elec. Co., 10 Cir.,1938, 100 F.2d 770. 18 Originally enacted as c. 687......
  • McLean v. State of Mississippi, No. 8739.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • May 12, 1938
    ...383; and Standard Stoker Co. v. Lower, D. C., 46 F.2d 678, 683. Contrary rulings may be found in Patten v. Dodge Mfg. Corporation, D.C., 23 F.2d 852, and O'Donnell v. Slade, D.C., 5 F.Supp. 265, but neither notices the decision in Southern Pac. Co. v. Denton, The fact that the United States......
  • Toulmin v. James Mfg. Co., No. 2235.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Western District of New York
    • May 8, 1939
    ...which are urged as holding to the contrary are United States v. Southern Pacific R. Co., C.C., 49 F. 297; Patten v. Dodge Mfg. Co., D.C., 23 F.2d 852; Dodge Mfg. Co. v. Patten, 7 Cir., 60 F.2d 676; Riddle v. New York, L. E. & W. R. Co., C.C., 39 F. 290, and Consolidated Store-Service v.......
  • Ward v. Studebaker Sales Corporation, No. 7227.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 8, 1940
    ...see Dobie, Federal Procedure 483; but see contra, Shainwald v. Davids, D.C.,N.D. Cal., 69 F. 704; Patten v. Dodge Mfg. Corp., D.C.Ind., 23 F.2d 852, reversed on other grounds, 7 Cir., 60 F.2d 676; Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 10 Cir., 100 F.2d 2 Venue of Actions ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT