Insurance Company v. Francis, 78 U.S. 210 (1870)

U.S. Supreme Court

Insurance Company v. Francis, 78 U.S. 11 Wall. 210 210 (1870) Insurance Company v. Francis

78 U.S. (11 Wall.) 210

WRIT OF ERROR TO THE DISTRICT COURT OF THE UNITED

STATES FOR THE SOUTHERN DISTRICT OF MISSISSIPPI

Syllabus

An averment in a declaration that the defendant is a corporation created by an act of the Legislature of the State of New York, located in Aberdeen, Mississippi and doing business there under the laws of the state, is not an averment that the defendant is a citizen of Mississippi.

One Francis had brought suit in the Circuit Court of Monroe County, Mississippi, November Term 1866, against "The Germania Fire Insurance Company of the City of New York" upon a policy of insurance. The company appeared to the suit and demurred to the declaration. The plaintiff, at August Term 1867, petitioned for the removal of the cause "to the Circuit Court of the United States, held in or at Oxford, in the Northern District" of Mississippi, averring that the petitioner, the plaintiff, is a citizen of Illinois, and

"that said defendant is a corporation with agents and officers in said State of Mississippi here residing and transacting the business of insurance for which said company was incorporated."

And thereupon the judge of the Circuit Court of Monroe County ordered "that the case be removed from that court to the District Court of the United States for the Northern District of Mississippi, as prayed for."

This removal was made in pursuance of a statute of March

Page 78 U. S. 211

2, 1867, [Footnote 1] which authorizes a transfer from a state court to a federal court of suits in any state court "in which there is a controversy between a citizen of the state in which the suit is brought and a citizen of another state," if the plaintiff

"will make and file in such state court an affidavit, stating that he has reason to and does believe that from prejudice or local influence, he will not be able to obtain justice in such state court."

The defendant, then in the district court, moved to strike the case from the docket for want of jurisdiction.

The motion was overruled, with leave to the plaintiff to file a new declaration in the district court.

At June Term 1868, of said district court, the plaintiff filed a declaration against the defendant as "The Germania Fire Insurance Company, a corporation located in the City of Aberdeen and State of Mississippi, by its agent, H. D. Spratt, summoned &c."

The defendant then pleaded to the jurisdiction of the district court, because at the time the suit was brought, and at the time it was removed, the plaintiff was a citizen of the state of Illinois, and the defendant was a corporation created by the laws of New York, having its domicile and principal place of business in New York.

The plaintiff demurred, whereupon it was

"ordered by the court that the demurrer of said plaintiff be extended to the declaration, and as to said declaration and the averments as to the said citizenship of said defendant that said demurrer be sustained and the plaintiff have leave to amend the declaration."

Whereupon the plaintiff amended and declared against the defendant as

"The Germania Fire Insurance Company, a corporation created by an act of the Legislature of the state of New York, located in the City of Aberdeen and State of Mississippi, by its agent H. D. Spratt, and doing business in said City of Aberdeen and State of Mississippi in the district aforesaid, under and by virtue of the laws of the State of Mississippi, summoned &c. "

Page 78 U. S. 212

To this the defendant filed four pleas to the jurisdiction, among them one because the plaintiff was a citizen of Illinois and the defendant a citizen of New York.

The plaintiff demurred. The demurrer to the plea just mentioned was sustained, and the defendant excepted. The demurrer was not sustained as to one of the other pleas, and the defendant filed pleas to the merits, and the case was tried, and the plaintiff got verdict and judgment. The statutes of Mississippi, it appeared, authorized the location of foreign insurance companies in the state upon certain conditions specified in it, one of which was that they would engage in writing to be suable there. [Footnote 2]

Page 78 U. S. 215

MR. JUSTICE DAVIS delivered the opinion of the Court.

The Act of Congress of March 2, 1867, which allows a plaintiff, under certain circumstances, to remove his cause from the state to the federal court, authorizes the transfer only when one party is a citizen of the state in which the suit is brought and the other party is a citizen of a different state. In this case, while it appears on the face of the declaration that the plaintiff is a citizen of Illinois, it does not appear that the defendant is a citizen of Mississippi. This being so, it is not necessary to notice the subsequent pleadings, because if the court can see, on the case made by the plaintiff in his declaration, that the district court acquired no jurisdiction over it, it is bound to reverse the judgment and direct the district court to remand the cause to the state court in which it was instituted. [Footnote 3]

Page 78 U. S. 216

If the declaration had averred the citizenship of the parties to be as the law requires it, the jurisdiction of the district court would have attached, and we would be required to look further into the record in order to ascertain whether the defendant had raised the question of jurisdiction in season to avail itself of the objection in this Court. [Footnote 4]

The declaration avers that the plaintiff in error (the defendant in the court below) is a corporation created by an act of the Legislature of the State of New York, located in Aberdeen, Mississippi, and doing business there under the laws of the state. This, in legal effect, is an averment that the defendant was a citizen of New York, because a corporation can have no legal existence outside of the sovereignty by which it was created. [Footnote 5] Its place of residence is there, and can be nowhere else. Unlike a natural person, it cannot change its domicile at will, and although it may be permitted to transact business where its charter does not operate, it cannot on that account acquire a residence there.

As, therefore, the declaration is on its face bad in not showing that one of the parties to the suit was a citizen of Mississippi, it follows that the transfer of the cause was not authorized by law and that the district court had no jurisdiction to try it.

Judgment of the district court reversed and the cause remanded to that court with instructions to transmit it to the Circuit Court of Monroe County for further proceedings in conformity to law and justice.

[Footnote 1]

14 Stat. at Large 558.

[Footnote 2]

See Revised Statutes of Mississippi, Chapter on Insurance.

[Footnote 3]

Pollard & Pickett v. Dwight, 4 Cranch 429.

[Footnote 4]

De Sobry v. Nicholson, 3 Wall. 423.

[Footnote 5]

Ohio & Mississippi Railroad Co. v. Wheeler, 1 Black 286; Louisville Railroad Co. v. Letson, 2 How. 497.