Realty Holding Co v. Donaldson

• Decision Date: 25 May 1925
• Docket Number: No. 348,348
• Citation: Realty Holding Co v. Donaldson, 268 U.S. 398, 45 S.Ct. 521, 69 L.Ed. 1014 (1925)
• Parties: REALTY HOLDING CO. v. DONALDSON
• Court: U.S. Supreme Court

268 U.S. 398

45 S.Ct. 521

69 L.Ed. 1014

REALTY HOLDING CO.

v DONALDSON.

No. 348.

Argued April 28, 1925.

Decided May 25, 1925.

Mr. John R. Rood, of Detroit, Mich., for appellant.

Mr. John C. Spaulding, of Detroit, Mich., for appellee.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

The jurisdiction of the court below was invoked upon the ground of diverse citizenship, Judicial Code, § 24, subd. 1 (Comp. St. § 991); and the court dismissed the bill under the limiting clause contained in that subdivision:

'No District Court shall have cognizance of any suit (except upon foreign bills of exchange) to recover upon any promissory note or other chose in action in favor of any assignee, or of any subsequent holder if such instrument be payable to bearer and be not made by any corporation, unless such suit might have been prosecuted in such court to recover upon said note or other chose in action if no assignment had been made.' 294 F. 541.

The bill alleges that appellant is a Delaware corporation and appellee a 'resident' of Michigan. This is not a sufficient allegation of appellee's Michigan citizenship. Robertson v. Cease, 97 U. S. 646, 648, 24 L. Ed. 1057; Wolfe v. Hartford Life Ins. Co., 148 U. S. 389, 13 S. Ct. 602, 37 L. Ed. 493; Oxley State Co. v Butler County, 166 U. S. 648, 655, 17 S. Ct. 709, 41 L. Ed. 1149. It was, however, conceded by appellee in the court below, as well as here, that she was in fact a citizen of Michigan; and the court below assumed the point. Since the defect may be cured by amendment and nothing is to be gained by sending the case back for that purpose, we shall consider the amendment made and dispose of the case. Norton v. Larney, 266 U. S. 511, 515-516, 45 S. Ct. 145, 69 L. Ed. 413; Howard v. De Cordova, 177 U. S. 609, 614, 20 S. Ct. 817, 44 L. Ed. 908.

Shortly stated, the bill alleges that appellee was the owner of certain real property in Michigan which she had leased to the Clifford Land Company, a Michigan corporation; that the Clifford Land Company had undertaken to finance for appellee the erection of a building upon such property. That appellant had executed and delivered to appellee two conveyances of other real property in Michigan as security for the erection of such building in accordance with the promises of the land company; that appellee had violated the terms of the lease in certain particulars set forth; and that appellant, 'in order to protect its rights and property in the premises,' etc., procured an assignment to it from the land company of the said lease. The specific relief prayed is a decree for 'specific performance by the said defendant of her said several undertakings' and for an injunction against interferences with appellant under the lease.

The assignor, being a Michigan corporation, could not have prosecuted the suit in a federal court if no assignment had been made. The phrase 'to recover upon any * * * chose in action,' under the decisions of this court, includes a suit to compel the specific performance of a contract or otherwise to enforce its stipulations. Corbin v. County of Black Hawk, 105 U. S. 659, 665, 26 L. Ed. 1136; Shoecraft v. Bloxham, 124 U. S. 730, 8 S. Ct. 686, 31 L. Ed. 574; Plant Investment Co. v. Key West Railway, 152 U. S. 71, 76, 14 S. Ct. 483, 38 L. Ed. 358; New Orleans v. Benjamin, 153 U. S. 411, 432, 14 S. Ct. 905, 38 L. Ed. 764. An examination of the bill of complaint discloses that the suit is primarily for a specific performance of the covenants of the lease. Additional relief sought is purely incidental to this main object. The case, therefore, falls within the doctrine of the foregoing decisions, and the court below was right in adjudging a dismissal. Kolze v. Hoadley, 200 U. S. 76, 83 et seq., 26 S. Ct. 220, 50 L. Ed. 377; Citizens' Savings Bank v. Sexton, 264 U. S. 310, 314, 44 S. Ct. 338, 68 L. Ed. 703.

The cases relied upon by appellant are not in point. Brown v. Fletcher, 235 U. S. 589, 35 S. Ct. 154, 59 L. Ed. 374, was a suit against a trustee by an assignee to recover an interest in an estate under an assignment by the cestui que trust. This court held that the relation between trustee and cestui que trust was not contractual; that the rights of the beneficiary depended upon the terms of the will creating the trust; and that a suit by the beneficiary or his assignee against the trustee for the enforcement of rights in and to...