The opinion of the Court of Appeals began by deprecating the elaborate fictions which had grown up around the definition of the place where suit against a corporation may be brought in federal court. Further as to the law of diversity jurisdiction it commented that
'* * * We have been given a rule for litigation which, so far as it goes, is clear and practical. If we had a similar clear and practical rule with regard to the multiple incorporation situation there would be no occasion for this appeal * * *'
On the other hand, in referring to situations to be distinguished from the multiple incorporation problem, the Court said (185 F.2d 104, at pages 106-107, supra):
'There are a number of cases in which a corporation from one state has been compelled, in order to do business in another, to go through elaborate formalities there, with some language in the statutes that the effect of those formalities is to make the association a local corporation. In spite of such statutory language courts have sometimes said that it did not become a domestic corporation in the second state. That problem is not now before us. It is enough to point out that if the corporation is not a corporation of the second state then we do not have the multiple incorporation problem which is presented in this case.' (Emphasis supplied.)
The opinion next makes reference to the Restatement of Conflicts of Laws, 203-207 on the effect of multiple incorporation -- and thereafter, it seems, purports to resolve the recurrent and troublesome problem as to the effect of multiple incorporation, and attempts nothing more.
The matter, it said, was an utterly practical one --
'* * * The question is not unlike that of the rules of the road for traffic. It can travel on the right, or it can travel on the left, but a car driver must know which side he is to take. And so here.' Ibid., 185 F.2d 106.
Eight years after the Gavin case, Congress has spoken on the subject of diversity jurisdiction as to corporations. Its enactment, in pertinent part, first declares that a corporation is a citizen of the state in which it is incorporated. Thus a long-established legal fiction or concept is, so to speak, codified as a rule of the road. But the act further says that a corporation is a citizen of the State where it has its principal place of business, for the purpose of diversity jurisdiction, and to that extent a new rule of law is laid down.
In the light of plaintiff's present contentions, it is noteworthy that the amendment does not say that for the purposes of federal jurisdiction the corporation is deemed to be incorporated in the state of its principal place of business. It is simply declared to be a citizen. In one state it is called a citizen by virtue of incorporation. It is designated as a citizen in another state because the latter is its home for the purpose of doing business. It seems reasonable to conclude that two kinds of citizenship are contemplated instead of two places of incorporation.
The Gavin opinion, it will be recalled, expressly limited its scope. Squarely before it, the Court said, was the problem of incorporation in more than one state. Beyond its compass, it pointed out, were the separate questions of the corporations which acquire a second 'citizenship' as the result of various states' prerequisites to doing business therein. In the same way, it seems, the present problem was not presented.
The rule of the Gavin case, therefore, is taken as having been intended to apply to no issue beyond that of multiple incorporation. Incidentally, and for the reasons heretofore given, the 1958 amendment to the Revised Judicial Code is not understood to have direct bearing upon the bare question of the effect of multiple incorporation in diversity litigation.
The plain words and the legislative history of the Amendment compel one to conclude that the present case is one of the very situations toward which the legislation is directed. Plaintiff does not deny defendant's representations that McCloskey & Company is a corporation engaged mainly in the construction of all types of buildings, highways, bridges and the like; nor that its principal place of business is in Philadelphia, Pennsylvania; nor that all business transactions are conducted through the Philadelphia office. Defendant McCloskey also maintains without contradiction that it has no office or place of business in Delaware other than that required by statute, namely, an agent for the service of process.
The net result is that the circumstance that McCloskey happens to be incorporated in Delaware does not permit a private citizen of Pennsylvania to bring his suit against such defendant in the federal instead of the state court, since McCloskey -- like the plaintiff -- is deemed a citizen of Pennsylvania.
It follows from the foregoing that the defendant's motion to dismiss for want of federal jurisdiction shall be Granted and It Is So Ordered.
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