Court Opinion

ID: 9301937
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:13:00.364531+00
Date Added: 2024-06-11T17:13:43.009298
License: Public Domain

On Motion for Rehearing.
Upon the filing of the opinion in this case, wherein it was held that this court could not take jurisdiction upon a removal of the suit from *535fhe slate court, because it was in form an action against a partnership in the fen name, a petition for rehearing was tiled by counsel, supported by a written brief, in which it is contended that the court has misconstrued the decisions of the supreme court in Chapman v. Barney, 129 U. S. 677, 9 Sup. Ct. 428, 32 L. Ed. 800, and Hotel Co. v. Jones, 20 Sup. Ct 690, Adv. S. U. S. 690, 44 L. Ed. -, and of the court of appeals for this circuit in Phipps & Co. v. Hulbert, 3 C. C. A. 391, 53 Fed. 10, iu holding that under no possible circumstances, where jurisdiction depends on diversity of citizenship, can a partnership, as such, sue or he sued in the federal court. The contention now made is that if the record shows the citizenship of the several partners, and that is diverse from that oí the other party, then the jurisdiction will exist over the suit in the firm name; and in support of this contention it Is pointed out that, in the cases above cited, the order was that the same; he remanded to the trial court in order that the parties might, by amendment, show that jurisdiction in fact existed. It: will be noticed in these cases, which were brought originally In the federal court, that the plaintiffs were partnerships, and therefore, when these eases were remanded to the trial court, it was open to the plaintiffs to amend by setting forth the names and citizenship of the partners; thus converting the suit into one brought in the? name of the several partners, doing business* under the given Arm name. As was said in the original opinion filed in the present case, if the persons forming the firm of Armour' & Co. had appeared iu the state court, and, by leave of that court, had been substituted as defendants in place of tin1 firm, then the record would have shown a controversy pending between citizens of different states, and (.he case would have been removable under the statute;. This was not done, however, and tin? case1 remains in the form in which, it was commenced, to wit, an action against the firm of Armour & Co.
("are has been used, in all the proceedings taken, to avoid anything which might he construed into entering an appearance for the individuals composing the firm, and. this court is asked to take jurisdiw lion, hv removal on the ground of diverse citizenship, ova’ a case pending against a firm in the partnership name. To authorize a federal court to entertain jurisdiction over a suit on the ground of diverse citizenship, it must appear that the controversy is one between citizens of different states; or, in oilier words, the jurisdiction defiends on the question whether the party plaintiff and the party defendant ate citizens of a state, within the meaning of the constitution, and are- also citizens of different states. The parly defendant in this case is the firm of Armour & Co. If judgment should be entered in favor of the plaintiff on the cause of action sued on, it could be entered only against the linn, and would be enforceable by process against the firm property, and nothing else. As the record now stands, a judgment cannot be entered against the individuals alleged to constitute the firm of Armour & Co. It: is therefore clear that the party defendant is the firm, and the firm only. Under the provisions of the slate statute, the action may he brought and maintained against (he fsrm in the firm name, and judgment may be enforced against the firm property; but the state statute does not create jurisdiction, over *536the individual partners, unless by service of notice they have been brought within the jurisdiction of the court. If this court, assuming the existence of jurisdiction, should render judgment in favor of plaintiff, it could only be entered against the firm in the firm name, because the individual partners have not become parties to the suit. There can be no escape from the conclusion, therefore, that this action is one pending against Armour & Co. as a partnership. Every paper filed and every motion made by the defendant is in the. firm name, and that only; and it is true, as matter of form and matter of fact, that the defendant is a partnership, sued in the firm name. As this case now stands, this court has no jurisdiction whatever over the individual partners composing the firm of Armour & Co., and the only jurisdiction it could exercise would be over the firm and in the firm name.
This being the indisputable fact, then the question arises whether it can be predicated of the firm of Armour & Co, the defendant herein, that it is a “citizen of the state of Illinois.” This, question is answered by the supreme court in the already cited case of Hotel Co. v. Jones, 20 Sup. Ct. 690, Adv. S. U. S. 690, 44 L. Ed.-, wherein it is said:
“The rule that for purposes of jurisdiction, and within the meaning of the clause of the constitution extending the judicial powers of the United States to controversies between citizens of different states, a corporation was to be deemed a citizen of the state creating it, has been so long recognized and applied that it is not now to be questioned. No such rule, however, has been applied to partnership associations, although such associations may have some of the characteristics of a corporation. * * * That a limited partnership association created under the Pennsylvania statute may be described as a ‘quasi corporation,’ having some of the characteristics of a corporation or a new artificial person, is not a sufficient reason for regarding it as a corporation, within the jurisdictional rule heretofore adverted to. That rule must not be extended. We are unwilling to extend it so as to embrace partnership associations.”
In Chapman v. Barney, 129 U. S. 677, 9 Sup. Ct. 426, 32 L. Ed. 800, it was said:
“The allegation of the amended petition is that the United States Express Company is a joint-stock company organized under a law of the state of New York, and is a citizen of that state. But the express company cannot be a citizen of New York, within the meaning of the statutes regulating jurisdiction, unless it be a corporation. The allegation that the company was organized under the laws of New York is not an allegation that it is a corporation. In' fact, the allegation is that the company is not a corporation, but a joint-stock company, — that is, a mere partnership; and, although it may be authorized by the laws of the state of New York to bring suit in the name of its president, that fact cannot give the company power, by that name, to sue in a federal court.”
These oases hold, if I correctly apprehend their meaning, that in suits in the federal courts, wherein jurisdiction depends upon the diverse citizenship of the parties litigant, the same, to confer jurisdiction, must be brought in the name of litigants of whom it can be properly averred that they are citizens of a named state, and that citizenship cannot be predicated of a partnership or .joint-stock association. As already pointed out, the only defendant in this case is the firm of Armour & Co., and, as the firm is not a citizen of any state, it is not made to appear that the controversy is between citizens of differ*537ent states, and therefore it is a suit which is not removable to this court on the ground of diverse citizenship.
in the brief filed in support of the petition for a rehearing, it is argued that the case presents a question arising under the constitution of the United States, in that the state statute endeavors to confer jurisdiction over nonresidents of Iowa, by a service had upon a mere agent, which, it is claimed, cannot be rightfully done, and therefore tlie suit is removable, in that it presents a controversy arising under the federal constitution. It is well settled that, under the act of 1888, a case is not removable on the ground that it involves a federal question, unless the existence of the federal question is made to' appear in the case stated in the plaintiffs pleadings. Tennessee v. Union & Planters’ Bank, 152 U. S. 454, 14 Sup. Ct. 654, 38 L. Ed. 511. The validity of the service of the original notice in ¡his case is primarily a question arising under the stale statute; and although, in the consideration thereof, a federal question may possibly become involved, if will then be a question presented by the defendant, which may or may not arise, and it cannot be made the basis for the removal of the case to this court on the ground that the controversy tendered by the plaintiff is one. arising under the constitution or laws of the United Htat.es. It is open to the defendant to present this question in the state court, and, if the ruling is adverse, then the matter can be carried to the supreme court of the United States; but toe fact that a federal question of this character may he presented by the defendant does not make the suit brought by the plaintiff a controversy arising under the constitution or laws of the United States, within the meaning of the removal statute. The motion for a rehearing filed by the defendant is therefore overruled, and the case must be remanded to the state court on the ground that this court cannot take jurisdiction over a suit brought against the firm of Armour & Co., the individual partners not being made, in any form, parties defendant