Seaboard Finance Company v. Martin

• Decision Date: 14 June 1957
• Docket Number: No. 16420.,16420.
• Citation: 244 F.2d 329
• Parties: SEABOARD FINANCE COMPANY, Appellant, v. Honorable Wade O. MARTIN, Jr., Secretary of State of the State of Louisiana and Seaboard Finance Corporation, Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

244 F.2d 329 (1957)

SEABOARD FINANCE COMPANY, Appellant, v. Honorable Wade O. MARTIN, Jr., Secretary of State of the State of Louisiana and Seaboard Finance Corporation, Appellees.

No. 16420.

United States Court of Appeals Fifth Circuit.

May 10, 1957.

Rehearing Denied June 14, 1957.

Gibbons Burke, New Orleans, La., Chaffe, McCall, Phillips, Burke & Hopkins, New Orleans, La., of counsel, for appellant.

Murray F. Cleveland, New Orleans, La., C. C. Wood, Spl. Asst. Atty. Gen., Henican, James & Cleveland, New Orleans, La., for Seaboard Finance Corp., appellee.

Before BORAH, RIVES and BROWN, Circuit Judges.

RIVES, Circuit Judge.

Seaboard Finance Company, a Delaware corporation, sought a judgment directing the Secretary of State of the State of Louisiana to issue to it a certificate of qualification to do business within that State, and a further judgment ordering and directing Seaboard Finance Corporation, a Louisiana corporation, to cease and desist from doing business under that corporate name. It prayed also for "such other and further relief to which the plaintiff may be justly entitled." The district court sustained the separate motion to dismiss filed by each of the defendants, and this appeal ensued.

The Secretary of State's motion to dismiss took the position that the suit, nominally against him, was in substance a suit against the State of Louisiana which had not waived its immunity from suit; and, hence, that, under the Eleventh Amendment to the Constitution, the judicial power of the United States does not extend that far. We agree with that position.

Seaboard Finance Corporation, the other defendant, was incorporated in 1953 under the laws of Louisiana. It is conceded, as it must be, that its name was deceptively similar to that of the plaintiff, Seaboard Finance Company. The Secretary of State declined to issue to plaintiff a certificate of qualification to do business within Louisiana in reliance upon Section 203, subd. B of Title 12 of the Louisiana Statutes Annotated-Revised Statutes of 1950, reading in part as follows:

"B. No certificate shall be granted or issued to any corporation having the same name or a name deceptively similar to that of any corporation, domestic or foreign, business or nonprofit, authorized to do business in this state * * *."

The plaintiff corporation did not offer to add to its name any distinguishing term, and there was no claim that the Secretary of State acted arbitrarily as was the case in State ex rel. Equitable Securities Corporation of Nashville v. Conway, Secretary of State, 189 La. 272, 179 So. 312. To the contrary, it affirmatively appears that the action of the Secretary of State was done under the authority of a valid State law, and was therefore beyond the judicial power of the United States. Worcester County Trust Co. v. Riley, Comptroller of California, 302 U.S. 292, 296-297, 58 S.Ct. 185, 82 L.Ed. 268. As to the action against the Secretary of State, the judgment of dismissal is therefore affirmed.

The motion to dismiss filed by the defendant Seaboard Finance Corporation was based upon three grounds: (1) "that the Court lacks jurisdiction because the amount actually in controversy is less than $3,000.00, exclusive of interest and costs"; (2) "the complaint fails to state a claim against defendant Seaboard Finance Corporation upon which relief can be granted"; and (3) "the plaintiff is guilty of laches."

Jurisdiction was based on diversity of citizenship, 28 U.S.C.A. § 1332. The complaint contained the formal averment that, "The matter in controversy exceeds, exclusive of interest and costs, the sum of $3,000." In addition, the complaint alleged that continuously since 1927 plaintiff and its corporate predecessors have used said corporate name in the business of making loans and have used effective means of building good will under said name. For each of the years 1945 to 1955 the amounts expended for advertising the corporate name and business are set forth, varying from $259,815 in 1945 to $957,325 in 1955. The dollar volumes of business in loans and in sales for each of said years are stated, the loan business varying from $31,609,425 in 1945 to $179,662,152 in 1955, and the sales business increasing from $2,311,252 in 1945 to $101,073,810 in 1955. The plaintiff operates 304 offices in 32 states, 6 in Hawaii, and 5 in Canada. It has 23 stockholders residing in Louisiana, 9 in Mississippi, and 94 in Texas. Its expansion, both economic and territorial, has been gradual and progressive, and, in the orderly expansion of its trade territory, it has entered into negotiations for the acquisition of small loan companies within the State of Louisiana.

Such detailed averments in support of the formal allegation of jurisdictional amount were not denied. The motion on the jurisdiction was in general terms, as heretofore quoted, and was coupled with a ground of failure of the complaint to state a claim upon which relief can be granted, and a simple charge of laches. No proof by affidavit or otherwise was adduced, and, apparently, the court and the parties considered that evidence was not called for at that stage of the proceedings. The plaintiff might have been required to prove the allegations as to amount in controversy on proper motion to dismiss KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 81 L.Ed. 183. Under the circumstances of this case, however, including the general form of the motion, the joinder of grounds which operated merely as a demurrer, and the failure of the court to call for proof, it would, we think, work an injustice on the plaintiff to dismiss the action for its failure then to prove that the jurisdictional amount was involved when it did not understand that such proof was then required. Rather the motion should be treated as admitting for the purposes of the motion the detailed averments of the complaint which were not denied and as submitting on the allegations without the production of evidence. Gibbs v. Buck, 307 U.S. 66, 71, 59 S.Ct. 725, 83 L.Ed. 1111. If we mistake the intention...