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CARLTON PROPERTIES, INC. v. CRESCENT CITY LEASING

December 18, 1962

CARLTON PROPERTIES, INC.
v.
CRESCENT CITY LEASING CORPORATION



The opinion of the court was delivered by: KRAFT

Plaintiff, a corporation, instituted this action for specific performance and allied relief in the Court of Common Pleas of Bucks County. On May 25, 1962, defendant, also a corporation, filed a petition for removal of the action to this Court, purportedly on the basis of diversity of citizenship. Plaintiff thereafter filed a motion for remand on the ground that the record failed to show that diversity existed when the suit was instituted by the issuance of the summons in equity on April 30, 1962. Plaintiff's contention has merit, and the motion will be granted.

The citizenship of a corporation is defined in 28 U.S.C. § 1332(c), as amended:

 '(c) For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.'

 The petition for removal alleges diversity of citizenship at the time of the filing of the petition, but is altogether silent as to citizenship at the time suit was instituted. We do not agree with defendant that the complaint 'confirms both the respective places of business and the diversity of citizenship.' The reference is to paragraph 1 of the complaint:

 '1. Plaintiff is a New York corporation, organized and existing under the laws of the State of New York, with its registered office at 400 Madison Avenue, new York, and defendant is a corporation organized and existing under the laws of the State of Georgia, with its principal office in Atlanta, Georgia, its mailing address being Post Office Box 1738, in that city.'

 The term 'registered office', 'principal office' and 'principal place of business' are not interchangeable. See Washington-East Washington Joint Authority v. Roberts and Schaefer Company, 180 F.Supp. 15, at p. 17 (W.D.Pa.1960).

 The record must show diversity at both times. See Jackson v. Allen, 132 U.S. 27, at p. 34, 10 S. Ct. 9, 33 L. Ed. 249 (1889):

 'It appears from the record that the citizenship of the parties at the commencement of the actions, as well as at the time the petitions for removal were filed, was not sufficiently shown, and that therefore the jurisdiction of the state court was never divested. Stevens v. Nichols, 130 U.S. 230 (9 Sup.Ct.Rep. 518). This being so, the defect cannot be cured by amendment. Crehore v. Ohio and Mississippi Railroad Co., 131 U.S. 240 (9 Cup.Ct.Rep. 692).'

 Extensive research persuades us that the principle announced in Jackson is still the law as respects removal of actions. We agree with the conclusion reached in Washington, supra, 180 F.Supp. at p. 16:

 'Somewhere in the record, either in the petition for removal or in the pleadings filed in the state court, the record must affirmatively show diversity of citizenship not only at the time the removal petition is filed in this court but at the time of the commencement of the suit in the state court. Otherwise the jurisdiction of the state court is not divested.'

 We conclude that there has been no sufficient allegation of the diversity of citizenship required by 28 U.S.C. § 1332(c). In the absence of facts in the record upon which diversity jurisdiction can rest, this Court has no jurisdiction. Jackson v. Allen, supra.

 Following oral argument, defendant presented a motion for leave to amend the petition for removal in the particulars noted. Since the petition for removal failed to allege a necessary jurisdictional fact, we have no jurisdiction in this matter except to declare our want of jurisdiction. A different question would have been presented if the petition to amend had been filed within the statutory time. Sec. 1446(b) provides for a twenty day period 'after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading * * * or within twenty days after the service of summons upon the defendant * * *.'

 Defendant points to paragraph 7 of the petition for removal, which avers that this Court 'has jurisdiction by reason of diversity of citizenship of the parties,' and refers us to Firemen's Ins. Co. of Newark, N.J. v. Robbins Coal Co., 288 F.2d 349 (5th Cir. 1961) where a somewhat similar averment was held to justify the allowance of an amendment. In that case, the record failed to show the respective principal places of business of the corporate parties, both at the time of removal and at the time suit was commenced. The Court stated (p. 350):

 'This Court has held that a defective allegation of diversity jurisdiction in a suit originally filed in a federal district court can be amended in the Court of Appeals. Kaufman v. Western Union Telegraph Co., 5 Cir., 224 F.2d 723. We think ...


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