Ridgeland Box Mfg. Co. v. Sinclair Refining Co., No. 1996.

CourtUnited States District Courts. 4th Circuit. United States District Court of South Carolina
Writing for the CourtCosgrove & Bailey, of Charleston, S. C., for defendants
Citation82 F. Supp. 274
Docket NumberNo. 1996.
Decision Date26 January 1949

82 F. Supp. 274


No. 1996.

United States District Court E. D. South Carolina, Charleston Division.

January 26, 1949.

82 F. Supp. 275

Thomas M. Boulware, of Allendale, S. C., Edward W. Mullins, of Columbia, S. C., Randolph Murdaugh, of Hampton, S. C., and Y. C. Weathersbee and H. Klugh Purdy, both of Ridgeland, S. C., for plaintiffs.

Cosgrove & Bailey, of Charleston, S. C., for defendants.

WARING, Chief Judge.

The above entitled suit was commenced on July 22, 1948, by service of a complaint containing two causes of action. The suit was instituted in the Court of Common Pleas for Jasper County, South Carolina. The first cause of action is based upon damages to certain real estate and the second cause of action is for damages to personal property. The damages in both causes of action are alleged to be the result of fire injuries claimed to have been caused by negligence of the defendant company. At the time of the fire the land and buildings were owned by one W. D. Ellis and later conveyed to the plaintiff, Ridgeland Box Manufacturing Company (hereinafter called Ridgeland) and together with this conveyance of title Ellis assigned to Ridgeland the claim for the fire damages. The second cause of action is based upon damages, said to have arisen from the same fire, to personal property consisting of machinery, etc., which at the time of the fire was owned by Ridgeland and was on the above referred to real property. The fire alleged to have caused these damages occurred on July 13, 1943.

My attention has been called to the fact that in June 1945 a suit was instituted in Hampton County South Carolina, wherein Ridgeland was the sole plaintiff and the present defendant was joined with two residents of South Carolina. That case was removed to this court (Civil Action No. 1351). It appears that the plaintiff moved to dismiss without prejudice and such motion was granted upon certain terms consisting of payment of costs and attorney's fees. These conditions were complied with.

Thereafter, as shown and alleged in the complaint in the instant case, Ridgeland conveyed, transferred and assigned unto Frank E. Southard, Jr. a 1/100 interest in the land, buildings, and other personal property together with the fire damages described in both first and second causes of action.

Ridgeland is a South Carolina Corporation, Southard is a resident of the state of Maine and the defendant Sinclair Refining Company is a corporation under the laws of the State of Maine. The defendant, by appropriate proceedings, removed this case from the Court of Common Pleas for Jasper County, wherein it was instituted to this court upon the ground of diversity of citizenship upon the following grounds:

1. That the residence of the original parties to an assigned chose in action controls in determining the venue and jurisdiction.

82 F. Supp. 276

2. That Ridgeland is the only real party in interest. Southard being neither a necessary or indispensable party.

3. That Southard is not a necessary or indispensable party since he is only a partial assignee and furthermore his interest being only a 1/100 part is so small as to involve the doctrine of de minimis non curat lex.

The plaintiffs have appeared and moved to remand to the State Court, pointing out that one of the plaintiffs, namely Southard, is a citizen and resident of the same state as the defendant, namely the State of Maine and that therefore there is not diversity of citizenship.

Referring to the above recited facts and especially to the suit brought in 1945 and later dismissed (Civil Action No. 1351) defendant points out and claims that the action of the plaintiff in dismissing that suit and instituting this, after Southard had acquired a small interest in the causes of action, is an indication and in fact a proof that all of these steps were taken with a view of preventing the trial of the issue in the federal jurisdiction and in order to keep it in the Courts of the State of South Carolina. I have no doubt that such was the intention. However, the dismissal of the earlier case was entirely proper and was allowed by an order of a judge of this court, upon certain terms which have been complied with, so that I feel that I am not required to further follow that case since it is ended and entirely dismissed and has become a nullity. Apparently the plaintiffs concluded that they had brought their other case upon a wrong theory. In passing it might be noted that in that case there was an entirely different amount claimed by way of damages and that other defendants, alleged to have been joint tort feasors with the defendant were included. It is not improper for a plaintiff, concluding that he has erroneously prepared and alleged his claims, to apply to a court for a dismissal and then start a new action. I also have little doubt that it is quite likely that the assignment of a small interest in the claims was made to Southard solely because Southard was a resident of the same state as the defendant company. Of course, if these allegations of citizenship are fraudulent this court will sustain the removal and refuse to remand. But on the other hand, even if the parties were joined for the purpose of defeating removal, if they really be proper parties and have legitimate standing in the court the attempt of removal may be defeated irrespective of the intent and purpose of the plaintiff. Scores, perhaps hundreds of tort claims are brought against non-resident corporations or non-resident individuals in State Courts and remain there by reason of the joinder as defendants of resident agents or servants or employees. It is hardly necessary to mention the many cases so brought against railroad companies joined with locomotive engineers, conductors and other trainmen; and against bus and other transportation companies joined with chauffeurs or operators; and numberless other like damage suits which are patently brought in such form for the purpose of preventing removal to the federal jurisdiction. But if the parties so joined are really proper parties removal is defeated. This is not an evasion but an avoidance.

Since the decision of the Erie case, Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, it is necessary in order to determine the validity of the cause of action and the rights of the parties to examine into the law of the state A case very similar to the one at bar is that of Daldy v. Ocean Acc. & Guar. Corp., D.C. 38 F.Supp. 454 in which the Court frankly states that the Federal Court is bound by the statutes and law of the State in which it sits and, although contrary to the presiding Judge's views, the Court was bound to allow suits by assignees such having been validated by the State Legislature although it was apparent that it was so done to avoid the jurisdiction of Federal Courts. The opinion referred to, a former opinion, Phoenix Mutual Life Ins. Co. of Hartford v. England, D.C. 22 F.Supp. 284, expressing the opposite view but which had been decided before the State Legislature took action. So let us now examine the law of South Carolina.

Under the law of the State of South Carolina a claim sounding in tort based upon damages to real or personal

82 F. Supp. 277
property is assignable. Bultman v. Atlantic Coast Line R. Co., 103 S.C. 512, 88 S.E. 279; Evans v. Watkins, 112 S.C. 419, 100 S.E. 153. So far the parties here are in agreement, but the contention by the defendant is that a partial assignment is only an equitable one and that a partial assignee will not have a standing in court. My attention has been called to a number of South Carolina cases wherein the Supreme Court of South Carolina has dealt with this matter in cases involving assignment of wages. While such an assignment seems to have been approved in the case of Carwile v. Metropolitan Life Insurance Company, 136 S.C. 179, 134 S.E. 285, in two much later cases the Carwile case, while not distinctly overruled, is distinguished and differentiated. These cases are Pacific Mills v. Textile Workers' Union of America, 197 S.C. 330, 15 S.E.2d 134, 135 A.L.R. 497, and Orr Cotton Mills v. St. Mary's Hospital, 203 S.C. 114, 26 S.E.2d 408. But an examination of these two cases shows that they were not instances of ordinary assignment of rights, but that they were attempts to institute what is known as the "check...

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