Hough v. Société Electrique Westinghouse de Russie

LEARNED HAND, District Judge (after stating the fae'ts as above). [1,2] The first question to be considered is the motion to remand, for if that should be granted this court has no jurisdiction to pass on the question of the validity of the service against McCarter. McCarter’s testimony shows that he is a citizen of the United States, and alleges that he resides in London, England; that he came to New York shortly after the outbreak of the Great War, and is now temporarily sojourning in New York on that account. He does not rest his right of removál upon the fact that he is a citizen of any of the states, for the record is barren of any evidence upon that score. One may be a citizen of the United States, and yet not be a citizen of any state. The Slaughter House Cases, 16 Wall. 36, 74, 21 L. Ed. 394. Yet, under sections 24 and 28 of the Judicial Code, no case may be removed, unless the defendants are citizens of some other state than the plaintiff. As the citizenship in another state of McCarter has not been shown, and as the jurisdiction of this court must be proved, the motion to remand must be disposed of in precisely the same way as though he was in fact a citizen of New York, of which the plaintiff is a citizen. [3] Therefore the motion to remand is good, unless McCarter can show that he has been joined with the fraudulent purpose of preventing a removal into this court. Upon this issue he must show more than that no relief can be granted against him in the state court; he must show that the plaintiff could not reasonably suppose that no such relief could be given. If so, it would necessarily follow that the joinder was fraudulent; but it is irrelevant that the plaintiff’s motive was to prevent removal, provided he supposed that he had an honest chance to procure judgment against McCarter. Chicago, R. I. & P. Ry. v. Schwyhart, 227 U. S. 184, 33 Sup. Ct. 250, 57 L. Ed. 473. [4] Nor does it make a different case, even though it appeared that the state court could give no judgment against McCarter, except in violation of the fourteenth amendment, because the right to remove rests wholly on diversity of citizenship, and if the fourteenth amendment does protect McCarter, he may raise it in the state court, and, if it is disregarded, prosecute his writ of error to the Supreme Court, where he will be protected. Riverside, etc., Mills v. Menefee, 237 U. S. 189, 35 Sup. Ct. 579, 59 L. Ed. 910. [344] [5] Hence the sole question, which is a question of fact for this court alone (Ches. & Ohio Ry. v. Cockrell, 232 U. S. 146, 153, 34 Sup. Ct. 278, 58 L. Ed. 544; Wecker v. National Enameling Co., 204 U. S. 176, 27 Sup. Ct. 184, 51 L. Ed. 430, 9 Ann. Cas. 757), is whether McCarter has. shown that the plaintiff had no “real intention to get a joint judgment” and that there was no “colorable ground for it shown” (Chicago, R. I. & P. Ry. v. Schwyhart, supra, 227 U. S. 194, 33 Sup. Ct. 250, 57 L. Ed. 473); that is, whether the joinder “was without any reasonable basis” (Ches. & Ohio Ry. v. Cockrell, supra, 232 U. S. 153, 34 Sup. Ct. 278, 58 L. Ed. 544). Therefore the precise character of a liquidation under the French law is only indirectly involved; that is, only so far as bo see whether the plaintiff could honestly suppose that he could get some relief‘ against McCarter upon personal service made here. That is a question of state law. Chicago, R. I. & Pac. Ry. v. Schwyhart, supra; Chicago, R. I. & Pac. Ry. v. Whiteaker, 239 U. S. 421, 36 Sup. Ct. 152, 60 L. Ed. -. I shall assume that the petition of removal is sufficient upon its face, since it sets forth the basis of its conclusion, and I shall proceed directly to the merits of the issue joined. The decision ,of the Supreme Court in Riverside, etc., Mills v. Menefee, supra, destroys any possible use for the joinder of McCarter as liquidator, since the state court must in any case dismiss as against the defendant corporation; but it does not avoid the necessity of deciding whether the joinder was fraudulent when made, because the decision was rendered after this action was commenced. [6] Some consideration is therefore still necessary of the powers bf a liquidator, appointed as he was by a French ' corporation, at least to the extent of learning whether the plaintiff had any reasonable chance of success against him. Both sides agree that such a liquidator is limited by the powers which the stockholders give him, if they give him specific powers. The resolution appointing McCarter provided, among other things, that he might undertake all “proceedings,” as well as all legal suits, might represent the company in suits between itself and third persons, as well as in all other public or private “administration” (vyhatever that may mean), and might fulfill all necessary formalities under the laws of all other countries. The language is certainly not clear, and I am by no means sure what construction another court would be disposed to ,f>ut upon it. That they might say that McCarter had authority to appear here for the company seems to me almost certain. That his powers so to represent the company in all litigations might subject him to an involuntary suit elsewhere than in France is a question not without doubt. It may possibly be that the power ought to be construed as only intended to allow his voluntary appearance elsewhere as a defendant, but I should be unwilling to say that there was no color for a broader construction. The resolution at the outset states that McCarter is to have the most extended powers' accorded by the laws and customs of commerce, and there is much evidence that these include a liability to service, at least in France. While, on the other hand, there is no evidence whether such liability extends under the law of France to suits outside of France, [345] I ought not assume that the courts of New York will certainly say that it docs not, and surely not that the plaintiff does not believe so. In a case so doubtful, where the validity -of a judgment against the corporation would at best have been of very doubtful validity extra-territorially, even 'before Riverside, etc., Mills v. Menefee, supra, I should suppose that the plaintiff might well think his case would stand belter if he got judgment in addition against the liquidator. I believe that to be the fact, though how far he will succeed I cannot tell. Even if I thought that judgment certainly valueless elsewhere, it would make no difference, unless I thought in addition that the state courts would not grant it for such effect as it might have. Motion to remand granted. Motion to dismiss itself dismissed for lack of jurisdiction, but of course without prejudice.