Town of Lantana, Fla. v. Hopper, 8910.

• Decision Date: 09 March 1939
• Docket Number: No. 8910.,8910.
• Citation: 102 F.2d 118
• Parties: TOWN OF LANTANA, FLA., v. HOPPER.
• Court: U.S. Court of Appeals — Fifth Circuit

102 F.2d 118 (1939)

TOWN OF LANTANA, FLA., v. HOPPER.

No. 8910.

Circuit Court of Appeals, Fifth Circuit.

March 9, 1939.

Willard Utley, C. Robert Burns, and R. C. Alley, all of West Palm Beach, Fla., for appellant.

W. Terry Gibson and Joseph P. Lea, Jr., both of West Palm Beach, Fla., for appellee.

Before FOSTER, HOLMES, and McCORD, Circuit Judges.

FOSTER, Circuit Judge.

Appellee brought this suit at law to recover on certain interest coupons detached from two separate issues of bonds issued by the town of Lantana, Florida, and recovered judgment in the sum of $8,412.08, with interest and costs. The pleadings are lengthy but it is unnecessary to review them extensively as at the outset we are confronted with a challenge to the jurisdiction of the District Court.

The complaint alleged that plaintiff is a citizen of New York and the owner and holder of the coupons sued upon; that defendant is a municipal corporation of Florida and a citizen of that state; that the amount involved exceeds $3,000, exclusive of interest and costs. These allegations were not denied. By leave of court, defendant filed verified pleas, which alleged the securities sued upon were transferred to plaintiff, Harrison Hopper, in name only, without consideration, by Ed C. Wright & Co., a Florida corporation, for the sole and exclusive purpose of collusively establishing an apparent diversity of citizenship, in order to bring the controversy within the Federal jurisdiction. After a hearing on these pleas, at which no evidence was offered by either side, defendant moved for dismissal of the case on the ground that plaintiff had failed to sustain the burden of proving jurisdiction. The motion was denied. Plaintiff then tendered the coupons and filed a verified proof of claim. No other evidence was adduced. Plaintiff then moved for judgment, which motion was granted, and judgment was entered by the court, without the intervention of the jury. Error is assigned to the denial of the motion to dismiss.

Unless plaintiff and defendant were citizens of different states the District Court was without jurisdiction. Jud.Code § 24, 28 U.S.C.A. § 41. The pleas, in effect, denied diversity of citizenship between the actual parties. If it should have appeared, at any time after the suit was brought, that plaintiff, Harrison Hopper, was not truly a party in interest and was collusively substituted for Ed C. Wright & Co., which corporation was the real party in interest, there was no diversity of citizenship and it was the duty of the District Court to dismiss the case. Jud.Code § 37, 28 U.S.C.A. § 80. Since there is no evidence at all tending to show the truth or falsity of the pleas, a decision on this point turns upon the burden of proof.

Federal Courts are of limited jurisdiction, fixed by statute, and the presumption is against jurisdiction throughout the case. Grace v. American Central Ins. Co., 109 U.S. 278, 3 S.Ct. 207, 27 L.Ed. 932; Lehigh Mining & Manufacturing Co. v. Kelly, 160 U.S. 327, 16 S.Ct. 307, 40 L.Ed. 444. In Roberts v. Lewis, 144 U.S. 653, 12 S.Ct. 781, 36 L.Ed. 579, the petition alleged the requisite diversity of citizenship and the answer denied each and every allegation of the petition. There was no proof of citizenship in the record. It was held that diversity of citizenship though properly alleged must be proved by plaintiff if denied by defendant; and if there is no evidence on that point the judgment must be reversed and the cause remanded. In Chase v. Wetzlar, 225 U.S. 79, 32 S.Ct. 659, ...