Court Opinion

ID: 9636480
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:30:31.858491+00
Date Added: 2024-06-11T18:09:43.559253
License: Public Domain

MANTON, Circuit Judge
(dissenting). It is properly held in the opinion of the majority of the court, that the plaintiff’s remedy is by mandamus. In re Hohorst, 150 U. S. 653, 14 S. Ct. 221, 37 L. Ed. 1211; § 377, U. S. Code (28 USCA § 377).
The hesitancy to attribute citizenship to a corporation for purposes- of jurisdiction, as resulting from the grant of incorporation, was very marked in the early decisions. Hope Insurance Co. v. Boardman, 5 Cranch, 57, 3 L. Ed. 36; Bank of United States v. Deveaux, 5 Cranch, 61, 3 L. Ed. 38; Sullivan v. Fulton Steamboat Co., 6 Wheat. 450, 5 L. Ed. 302; Commercial & R. Bank v. Slocomb, 14 Pet. 60, 10 L. Ed. 354. But in Marshall v. Baltimore & Ohio R. R., 16 How. 314, 14 L. Ed. 953, the Supreme Court finally held that the presumption arising from the habitat of the corporation in the place of its crea*639tion became conclusive as to tbe residence and citizenship of those who used the corporate name and exercised the faculties conferred by it, and that an allegation that a corporate body was created by the act of the state Legislature was a sufficient averment that the real defendant was a citizen of the state which created it. And in Doctor v. Harrington, 196 U. S. 579, 25 S. Ct. 355, 49 L. Ed. 606, it is pointed out that the corporation as such had its leg’al existence, separate from the shareholders, and it could sue and be sued. Perhaps this hesitancy justifies pausing now before declaring an unincorporated association to be a citizen of the state under whose statute it operates for jurisdictional purposes. Strictly speaking, a corporation has no citizenship. Nevertheless, it partakes of the attributes of citizenship by virtue of its organization, and in that respect its recognition is now well settled, where diversity of citizenship is brought into question.
By reason of much progress made since the early eases referred to, and the nationwide extensions of unincorporated bodies and their treatment as separate entities for collective bargaining and dealing, new and different reasons exist for considering them as having a residence and citizenship. These reasons should distinguish this case from Chapman v. Barney, 129 U. S. 677, 9 S. Ct. 426, 32 L. Ed. 800, and Great Southern FireprooHotel Co. v. Jones, 177 U. S. 449, 20 S. Ct. 690, 44 L. Ed. 842. It is well expressed in United Mine Workers v. Coronado Coal Co., 259 U. S. 344, 391, 42 S. Ct. 570, 66 L. Ed. 975, 27 A. L. R. 762, where the Supreme Court had before it an unincorporated association of persons in a labor union similar to the one named as the defendant herein. There it was held that the labor union unincorporated would be treated as an artificial person capable of suing and being sued. The court said:
“Though such a conclusion as to the suability of trade unions is of primary importance in the working out of justice, and in protecting individuals and society from possibility of oppression and injury in their lawful rights from the existence of such powerful entities as trade unions, it is after all in essence a.nd principle merely a procedural matter. * * * And the only question is whether when they have voluntarily, and for the purpose of acquiring concentrated strength and the faculty of quick unit action and elasticity, created a self-acting body with great funds to accomplish their purpose, they may not be sued as this body, and the funds they have accumulated may not be made to satisfy claims for injuries unlawfully caused in carrying out their united purpose.”
Of what state, then, can this artificial person, “capable of suing and being sued,” be regarded a citizen for the purpose of testing the diverse citizenship which gives jurisdiction to the federal court? The question was not squarely presented in the Coronado Case, because there the'jurisdiction rested upon a violation of the Clayton Act (38 Stat. 730). The complaint sufficiently sets forth that this unincorporated association was organized, and exists and transacts business under the General Association Laws of the state of New York; that its principal place of business is in the city and state of New York, within the Southern district; its membership consists of practically all the performers, players, actors, and actresses appearing and playing upon the American performing stage; that as such a labor union it possesses a charter from the American Federation of Labor, and operates as a labor union under this charter; that its officers, president, second vice president, treasurer, executive secretary, recording secretary, and assistant executive secretary, all aro citizens and residents of the state of New York. Plaintiff is a resident of Holland. An unincorporated association under a state law, as its other brother, an incorporated company, would seem to have an equal claim to a status as a separate entity and citizenship, separate from its members as a corporation, is regarded separately from its shareholder's. In the Coronado Case, the court said (reviewing the federal legislation dealing in such unincorporated associations):
“In this state of federal legislation, we think that such organizations are suable in the federal courts for their acts, and that funds accumulated to he expended in conducting strikes are subject to execution in suits for torts committed by such unions in strikes, w * a ??
In New York state an unincorporated association is regarded as a person under the General Business Law (section 17-c [Consol. Laws, e. 20 j) and the Negotiable Instruments Law (section 2 [Consol. Laws, e. 38]), for it includes a body of persons, whether incorporated or not. Section 239 of the Personal Property Law (Consol. Laws, c. 41) makes the same reference to two or more having á joint or common interest. The Internal Revenue Act refers to the term “corporation” as including associations, joint-stock companies, and insurance companies. Act of 1926; 26 USCA § 1262, subd. 2. We recognized tbe right to maintain a suit against an. unin*640corporated association of fire underwriters in Bobe v. Lloyds, 10 F. (2d) 730, and there we pointed out that the Supreme Court, in Hecht v. Malley, 265 U. S. 144, 44 S. Ct. 462, 68 L. Ed. 949, defined association as a term used throughout the United States to signify a body of persons united without a charter, but upon the methods and forms used by unincorporated bodies for the prosecution of some enterprise. What was said in Brown v. United States, 276 U. S. 134, 48 S. Ct. 288, 72 L. Ed. 500, where the service of a subpoena upon an unincorporated association was resisted, is pertinent, for there it was held that a subpoena duces tecum directed, to the association was valid, and must be obeyed, if served upon an officer.
Congress has shown, no intent to restrict jurisdiction in matters of legislation and supervision pertaining to labor unions. Federal control has grown constantly. Ulustra^ tions of this in its various forms are referred to in the Coronado Casa The Revenue Act of 1928 (26 USCA § 2103) further illustrates how numerous and important factors unincorporated associations have become in the life of our times. In dealing with exemptions from corporate tax, reference is made to some 17 of this class and character of unincorporated associations. Moreover, if the provisions of the Clayton Act and the other statutes enacted for supervision of labor problems are to. be effectively enforced, and labor unions remain unincorporated, more reason exists for regarding them as separate entities, and suable within a district as citizens of the state where their principal place of business is carried on and where their officers reside.
The motion for a writ of mandamus should be granted.' I therefore dissent.