First National Bank v. American Marine & General Insurance

181 F. Supp. 285, 1960 U.S. Dist. LEXIS 3066
CourtDistrict Court, E.D. Arkansas
DecidedMarch 2, 1960
DocketCiv. No. H-746
StatusPublished
Cited by6 cases

This text of 181 F. Supp. 285 (First National Bank v. American Marine & General Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank v. American Marine & General Insurance, 181 F. Supp. 285, 1960 U.S. Dist. LEXIS 3066 (E.D. Ark. 1960).

Opinion

' HENLEY, Chief Judge.

This action, which arises, in part at least, out of the alleged destruction, loss, or conversion of a large quantity of rice, was commenced in the Circuit Court of Desha County, Arkansas, and was removed to this Court by two of the three . defendants. The cause is now before the Court upon the plaintiffs’ motion to remand for lack of jurisdiction.

The plaintiffs are: Walter J. Garic, Inc., a Louisiana corporation (Garic); The Hibernia National Bank In New Orleans, a Louisiana national bank (Hibernia Bank); The First National Bank of Lake Providence, Louisiana, another [287]*287Louisiana national banking institution (First National Bank); and The National Bank of Commerce of Pine Bluff, Arkansas, a national bank domiciled in the State just mentioned (National Bank of Commerce).

The defendants are: John Lammers, an individual citizen of Arkansas; American Marine And General Insurance Company, a New York corporation (insurance company); and American Express Field Warehousing Corporation, a Delaware corporation (warehouse company).

Complete .diversity of citizenship between all of the plaintiffs on the one hand and all of the defendants on the other hand does not exist, and the individual defendant, Lammers, is a citizen of Arkansas. Notwithstanding, the insurance company and the warehouse company filed separate petitions for removal in this Court, alleging that the claims asserted against them were separate from and independent of the claims against their co-defendant, Lammers, and that the entire case was removable under 28 U.S.C.A. § 1441(c).1 The warehouse company now concedes that its right to remove was “dubious” and has consented that its “Petition for Removal * * * be denied.” The insurance company, however, contends that in view of the nature of the claims asserted against it, this Court has jurisdiction.

For the purpose of determining its jurisdiction the Court looks at the case as it stood at the time of removal and as made out by the plaintiffs in their complaint. Chicago, R. I. & P. Ry. Co. v. Schwyhart, 227 U.S. 184, 33 S.Ct. 250, 57 L.Ed. 473; Southern Ry. Co. v. Miller, 217 U.S. 209, 30 S.Ct. 450, 54 L.Ed. 732; Alabama Great Southern Ry. Co. v. Thompson, 200 U.S. 206, 26 S.Ct. 161, 50 L.Ed. 441; Doran v. Elgin Cooperative Credit Ass’n, D.C.Neb., 95 F.Supp. 455, 459.

As disclosed by the complaint the basic facts are as follows: Prior to July 18, 1959, the warehouse company maintained a warehouse in McGehee, Arkansas, in which large quantities of rice were stored. Some of this rice was owned by the defendant, Lammers, who, being indebted to First National Bank and to National Bank of Commerce, had pledged to-those banks warehouse receipts issued by the warehouse company and covering certain rice belonging to Lammers.

In May 1959 the plaintiff, Garic, bought 10,648.50 cwt. of unmilled rice from the Commodity Credit Corporation (CCC), with the understanding that after the rice had been milled, it would be resold to CCC for a higher price. At about the same time Garic and Lammers entered into an agreement whereby the latter was to mill the rice and then return it to Garic. The rice was turned over to Lammers and was stored by him in the warehouse company’s facilities in Mc-Gehee. Title to this rice was retained by Garic. At the time of these transactions Garic was indebted to Hibernia Bank, and to secure his indebtedness to that bank he pledged to it his interest in the rice turned over to Lammers.

All of the rice mentioned was insured by the defendant insurance company, and the policy contained loss payable endorsements in favor of the three creditor banks.

On July 18, 1959, while Lammers was still indebted to First National Bank and National Bank of Commerce, and before he had redelivered the Garic rice, the-warehouse caught fire, and the contents thereof were damaged or destroyed.

After the fire, demands were made by the plaintiffs upon the insurance company for the satisfaction of their respective claims under the loss payable endorsements, but the insurance company refused payment on the ground that all of the rice in which the plaintiffs were [288]*288interested had been removed from the warehouse prior to the fire. It was contended by Lammers and the warehouse company, on the other hand, that the rice had been in the warehouse at the time of the fire and had been burned, and the plaintiffs should have recourse to the insurance company for the satisfaction of their demands. Confronted with those conflicting contentions, the plaintiffs commenced this action against all of the •defendants.

The complaint reveals that it actually involves three separate and distinct claims against all three of the defendants. In each instance, however, the •claim is cast in the alternative, the first alternative being that Lammers and the insurance company are jointly and severally liable to the respective plaintiffs, and the second alternative being that Lam-mers and the warehouse company are jointly and severally liable to the respective plaintiffs.

The first claim, that of Garic and Hibernia Bank, involves the rice that Garic turned over to Lammers. The claim against Lammers and the insurance company is for the value of the rice, which is alleged to be $66,068.19, with a further prayer for the award of penalty and attorney’s fee against the insurance company. The alternative claim against Lammers and the warehouse company is for the value of the rice, plus loss of profits from the expected resale to CCC, plus special damages in the sum of $10,-000, allegedly occasioned by Garic’s loss of the good will of CCC.

The basic claim of First National Bank is for the balance owed to it by Lammers, amounting to $60,609.73, and the basic claim of National Bank of Commerce is for the amount of Lammers’ •debt to it amounting to $7,500.

The theory of the claims against the insurance company is that the rice was in the warehouse at the time of the fire and was destroyed. The claims against the warehouse company presuppose that the rice had been removed from the warehouse prior to the fire, and the basis of those claims is that the warehouse company has wrongfully failed either to deliver the rice to those entitled thereto, or to account for its value. Obviously, under either factual alternative Lammers, individually, may well be liable to some or all of the plaintiffs.

It is familiqr law by now that 28 U.S.C.A. § 1441(c), which was a part of the 1948 revision of the Judicial Code, abolished the concept of “separable controversy” as a basis for removal, and substituted the requirement that there exist a “separate and independent claim or cause of action, which would be removable if sued upon alone.” The effect of this provision was to narrow federal removal jurisdiction. As was said by the Supreme Court in the leading case of American Fire & Casualty Co. v. Finn, 341 U.S. 6, 9-12, 71 S.Ct. 534, 538, 95 L.Ed. 702:

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Bluebook (online)
181 F. Supp. 285, 1960 U.S. Dist. LEXIS 3066, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-v-american-marine-general-insurance-ared-1960.