Wagner Mfg. Co. v. CUTLER-HAMMER, Civ. No. 992.

• Decision Date: 08 April 1949
• Docket Number: Civ. No. 992.
• Citation: 84 F. Supp. 211
• Parties: WAGNER MFG. CO. v. CUTLER-HAMMER, Inc.
• Court: U.S. District Court — Southern District of Ohio

84 F. Supp. 211

WAGNER MFG. CO. v. CUTLER-HAMMER, Inc.

Civ. No. 992.

United States District Court S. D. Ohio, W. D.

April 8, 1949.

Toulmin & Toulmin, Dayton, Ohio, for plaintiff.

Paxton & Seasongood, Cincinnati, Ohio, for defendant.

NEVIN, Chief Judge.

Plaintiff filed its complaint on September 30, 1948, in the office of the Clerk of the United States District Court, Southern District of Ohio, Western Division, at Dayton, Ohio.

On October 20, 1948, defendant filed a "Motion to dismiss, to strike from complaint and to make more definite and certain." The cause is now before the court on this motion.

Briefs in support of and contra the motion have been filed, together with a number of affidavits.

I.

The Motion to Dismiss (or to Transfer to Cincinnati).

In its brief in support of its motion to dismiss (or transfer) defendant makes the following statements, among others: "The basis of this motion is that, under the rules of this Court, the action was required to be brought at Cincinnati, rather than at Dayton. No question is raised as to jurisdiction nor is there any question that the action is properly brought in this District and in this Division. The sole question is whether it is brought in the proper place within the Division. Intra-division venue is governed by the rule recently adopted by this Court, which is, in part, as follows: `Any suit brought against residents of the Counties of Adams, Brown, Butler, Clermont, Clinton, Hamilton, Highland, Lawrence, Scioto and Warren, in the Western Division, shall be filed at Cincinnati. Any suit brought against residents of the Counties of Champaign, Clark, Darke, Greene, Miami, Montgomery, Preble, and Shelby, in the Western Division, shall be filed at Dayton.' (Italics ours). The single issue raised by this motion is, therefore, whether the defendant is a resident, within the meaning of this rule, of the Cincinnati group of counties or of the Dayton group. Our position is that the defendant is a resident of Hamilton County and that under the foregoing rule, the action could only be filed at Cincinnati. Having been improperly filed at Dayton, it should either be dismissed or it should be transferred to Cincinnati."¹

Defendant is a corporation of the State of Delaware, with its principal office and place of business at Milwaukee, Wisconsin. It is licensed and qualified to do business in the State of Ohio.

Defendant contends that a foreign corporation is a resident of the county in Ohio in which it has a place of business; that it (defendant) has a place of business in Hamilton County, Ohio, and none in the Dayton area or branch of the District and that it is, therefore, a resident of Hamilton County, Ohio, within the meaning of the rule of this Court hereinabove referred to.

The contention on this branch of the present motion revolves chiefly around the result flowing from the revision of the Judicial Code effective September 1, 1948.

The sections of the Judicial Code, Title 28, U.S.C.A., here pertinent, read as follows:

"Sec. 1391. Venue generally

"(a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside. * * *

"(c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes."

"Sec. 1393. Divisions; single defendant; defendants in different divisions

"(a) Except as otherwise provided, any civil action, not of a local nature, against a single defendant in a district containing more than one division must be brought in the division where he resides."

That it had been definitely determined that prior to September 1, 1948, a corporation was a "resident" only of the State in which it is incorporated, is not disputed.

In Shaw v. Quincy Mining Co., 145 U.S. 444, at pages 449-450, 12 S.Ct. 935, 937, 36 L.Ed. 768, the court says: "In Bank of Augusta v. Earle, 13 Pet. 519, 588, 10 L.Ed. 274, Chief Justice Taney said: `It is very true that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created. It exists only in contemplation of law, and by force of the law; and where that law ceases to operate, and is no longer obligatory, the corporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty. But, although it must live and have its being in that state only, yet it does not by any means follow that its existence there will not be recognized in other places; and its residence in one state creates no insuperable objection to its power of contracting in another.' This statement has been often reaffirmed by this court, with some change of phrase, but always retaining the idea that the legal existence, the home, the domicile, the habitat, the residence, the citizenship of the corporation can only be in the State by which it was created, although it may do business in other states whose laws permit it."

After quoting part of the above language from the Shaw case, the Supreme Court in the (comparatively) recent case of Suttle v. Reich Bros. Co., 333 U.S. 163, said at pages 166-167, 68 S.Ct. 587, 589, 92 L.Ed. 614; "For almost sixty years, in an unbroken line of decisions, this Court has applied the same construction. That view was reaffirmed as recently as 1946 in the opinion of the Court in Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 441, 66 S.Ct. 242, 244, 90 L.Ed. 185."

Defendant asserts that since September 1, 1948 the "old rule" that "a corporation is regarded as a resident only of the State of its incorporation" has been changed, saying: "Under the new statute, a corporation is not only a resident of the district in which it is incorporated, but is also regarded as a resident of any district in which it is licensed to do business or is doing business. * * * Under the new law, defendant is unquestionably a resident of this district and division. The question raised by the motion is thus narrowed to the place of its residence within the division under the Court's rule as to intra-division venue. We submit that under the admitted facts in this case, its only residence in the Western Division is at Cincinnati."

Plaintiff, on the other hand, in its brief says that it disagrees with defendant: "most emphatically that under the 1948 revision of the Judicial Code the residence of a corporation is no longer confined to the State of its incorporation. We find no support for that position in the Code itself and we find no cases which have overruled the plain statements of the Neirbo case, (Neibro Co. v. Bethlehem Shipbuilding Corp.) 308 U.S. 165, 60 S.Ct 153, 84 L.Ed. 167, 128 A.L.R. 1437, the Suttle case, 333 U.S. 163, 68 S.Ct. 587, 92 L.Ed 614, and the Mississippi Publishing Corp. case 326 U.S. 438, 66 S.Ct. 242, 90 L.Ed. 185."

The court agrees with the view expressed by plaintiff that there has been no change effected by the recent revision of the Judicial Code in the "old rule" to-wit, that a corporation is a "resident" only of the State in which it is incorporated.

It is true that it is now provided by Section 1391(c), Title 28 U.S.C.A., that under certain circumstances a "judicial district shall be regarded as the residence of such corporation for venue purposes."

It should be noted that the language used is simply that it "shall be regarded as the residence" and even so, only "for venue purposes." But this is merely a "fictional"; a "constructive" residence made so by the law solely "for venue purposes."

It does not alter the fact or the "old rule" that "the legal existence, the home, the domicile, the habitat, the residence" of a corporation is and can only be in the State in which it is incorporated. Defendant herein "must dwell in the place of its creation (Delaware) and cannot migrate to another sovereignty," Shaw v. Quincy...