Stiefel v. 14th Street & Broadway Realty Corporation

• Decision Date: 20 April 1931
• Docket Number: No. 329.,329.
• Citation: 48 F.2d 1041
• Parties: STIEFEL v. 14TH STREET & BROADWAY REALTY CORPORATION.
• Court: U.S. Court of Appeals — Second Circuit

48 F.2d 1041 (1931)

STIEFEL v. 14TH STREET & BROADWAY REALTY CORPORATION.

No. 329.

Circuit Court of Appeals, Second Circuit.

April 6, 1931.

Rehearing Denied April 20, 1931.

Jasie & Solomon, of New York City (Daniel Levy and William Solomon, both of New York City, of counsel), for appellant.

David W. Kahn, of New York City, for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

PER CURIAM.

The plaintiff, a trustee in bankruptcy, sued the defendant to recover a deposit made by the bankrupt before petition filed, as security for the performance of the covenants of a lease, entered into between it, as lessee, and the defendant, as lessor. The plaintiff is a citizen of New Jersey; the bankrupt and the defendant are corporations organized under the laws of New York. The defendant moved before answer to dismiss the action because the District Court had no jurisdiction over it under section 23 of the Bankruptcy Act (11 USCA § 46); the bankrupt and the defendant both being citizens of New York. This being denied, it repeated the objection in its answer, alleging that it answered at all only because its motion had been overruled. When the cause came on for trial, it again moved to dismiss the action for the same reason, but the judge, feeling bound to follow the decision already made, "tentatively" denied the motion, and the defendant "tentatively" excepted, and "reserved" its right to except further. Nothing more appears in the bill of exceptions, the cause proceeded on the merits, and the Judge directed a verdict for the plaintiff. The first assignment of error is to the judge's "tentative" denial of the motion to dismiss.

It is of course plain that the bankrupt could not have sued the defendant in the District Court; the parties would have both been citizens of New York. Under section 23a of the Bankruptcy Act, 11 USCA § 46(a), the trustee stood in the bankrupt's position, and the court was equally without jurisdiction. Section 23b, 11 USCA § 46(b), however, provides that in cases of this kind a trustee may sue only in courts where the bankrupt might have sued, "unless by consent of the proposed defendant," and the question has arisen whether this by implication gives jurisdiction to the District Court in case such consent is given. If section 23b affects substantive jurisdiction, as distinct from venue, section 23a appears to be redundant, for it adds nothing to what follows, and for this reason it was decided in Matthew v. Coppin, 32 F.(2d) 100 (C. C. A. 9), and Coyle v. Duncan Spangler Coal Co. (D. C.) 288 F. 897, that section 23b has nothing to do with jurisdiction, properly speaking. As much was said obiter in Lovell v. Isidore Newman & Son, 227 U. S. 412, 426, 33 S. Ct. 375, 57 L. Ed. 577; and McEldowney v. Card (C. C.) 193 F. 475, 480; and Bush v. Elliott, 202 U. S. 477, 483, 26 S. Ct. 668, 50 L. Ed. 1114, looks the same way. On the other hand, the opposite was held in Re White, 177 F. 194 (C. C. A. 7), and some of the language in Bardes v. Hawarden First Nat. Bank, 178 U. S. 524, 538, 20 S. Ct. 1000, 44 L. Ed. 1175, may perhaps be read as in accord. Without deciding the point, we may, however, assume arguendo that the defendant's consent would have conferred substantive jurisdiction here.

It was never given; indeed, it was refused. Objection to the jurisdiction was first taken by special motion, again in the answer, and finally at the trial. It is true that the defendant only "tentatively" excepted at that time, but this went as far as the court had ruled, and nothing more was then possible. The Judge's ruling was final, unless he changed his mind; he had said that he was bound to follow his predecessor, as he perhaps was, and since he never showed any disposition to reconsider, it would be absurd to impute any consent to the defendant because it did not bring up the question again. The record is an effective answer to any implication of consent arising from the defendant's contest of the cause upon the merits.

It is true that in this court the point, though it is among the errors assigned, was not argued. But that makes no difference. As the cause stood in the District Court, when it was removed by the appeal, that court had no jurisdiction over it; the judgment was non coram judice, and the defendant's failure to press it in this court could have no effect there.

The judgment must be reversed, and the cause remanded, with instructions to dismiss for lack of jurisdiction. If the defendant chooses to consent to the jurisdiction of the District Court after remittitur, the point we have not decided will be raised. We have not passed upon it against that possibility, because it seems doubtful whether the defendant will wish to consent in any event. Moreover, in the light of the decisions we have cited, any jurisdiction so acquired must be doubtful at best; and both parties may well prefer to have the new trial, if there is to be one, take place in the state court, whose jurisdiction is not open to question.

Judgment reversed; cause remanded, with instructions to dismiss for lack of jurisdiction, unless the defendant consents in the District Court, in which event the question of jurisdiction...