UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
May 26, 1967
UNITED ARTISTS THEATRE CIRCUIT, INC., Plaintiff,
NATIONWIDE THEATRES INVESTMENT COMPANY, David A. Thomas and Berton Raden Thomas, Defendants
The opinion of the court was delivered by: MCGOHEY
McGOHEY, District Judge.
The plaintiff, a Maryland corporation licensed to do business and having its principal place of business in New York, brought this action to recover security paid under a lease agreement and to recover on a guaranty agreement. The defendant Nationwide is an Ohio corporation which neither does nor is licensed to do business in New York. The individual defendants are Nationwide's principal stockholders and officers. Both are residents of Ohio.
The defendants move to dismiss the complaint and quash service on the following grounds: the service was improper; there is a prior action pending in an Ohio state court; the venue was improperly laid in the Southern District of New York.
Nationwide and the individual defendants were personally served in Ohio. From the affidavits it appears that both the lease agreement and the guaranty agreement were executed in New York; that considerable negotiations took place in New York; and that the security was actually paid in New York. Under such circumstances service in Ohio was valid and confers jurisdiction over the defendants.
The fact that there is a prior pending action in the Ohio state court does not require dismissal of the instant federal action.
The plaintiff urges with respect to the defendants' final ground for dismissal that 28 U.S.C.A. § 1391(c) permits a plaintiff corporation to lay venue in a district where it is doing business. That section provides:
"A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes."
There has been a sharp division of authority as to whether this section applies only to defendant corporations or to plaintiff corporations as well.
In this circuit the district courts have, with one exception, held that § 1391(c) applies to all corporations.
The exception is the decision in Lumbermens Mut. Cas. Co. v. South Portland Eng'r Co.
Judge Bonsal there held, chiefly on the authority of the Fourth Circuit's decision in Robert E. Lee & Co. v. Veatch,
that § 1391(c) applies only to defendants. With deference to the courts which have held the contrary, Judge Bonsal's view is adopted.
The motion to dismiss for improper venue is granted.