Indianapolis v. Chase Nat’l Bank, 314 U.S. 63 (1941)

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Indianapolis v. Chase National Bank

Nos. 10 and 11

Argued February 6, 7, 1941
Reargued October 15, 16, 1941
Decided November 10, 1941 *
314 U.S. 63

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. To sustain federal jurisdiction on the ground of diversity of citizenship, there must exist an actual, substantial controversy, on one side of which the parties must all be citizens of States different from those of which the parties on the other side are citizens. P. 69.

2. Diversity jurisdiction cannot be conferred upon the federal courts by the parties’ own determination of who are plaintiffs and who are defendants, and it is the duty of this Court, as well as of the lower courts, to look beyond the pleadings and arrange the parties according to their sides in the dispute. P. 69.

3. Whether there exists the necessary collision of interests to sustain diversity jurisdiction must be ascertained from the principal purpose of the suit and the primary and controlling matter in dispute. P. 69.

4. Upon the facts of this case, which was a suit brought, in a federal court of Indiana, by a New York bank against two Indiana gas companies and an Indiana city, this Court holds that the "primary and controlling matter in dispute" is whether a lease, whereby one of the gas companies conveyed all of its gas plant property to the other, was binding upon the city, to which the property had been afterwards conveyed by the lessee corporation pursuant to its franchise; that, with respect to that dispute, one of the gas companies and the city ("citizens" of the same State) are on opposite sides, and that, therefore, federal jurisdiction, which depends on diversity of citizenship, is lacking. Pp. 70, 74.

5. This Court’s earlier denial of certiorari to review a judgment of the Circuit Court of Appeals reversing a judgment of the District Court which dismissed this suit for want of jurisdiction could not confer on the federal courts a jurisdiction which Congress has denied. P. 75.

6. The policy of the statute conferring diversity jurisdiction upon the district courts calls for its strict construction. P. 76.

113 F.2d 217 reversed.

Certiorari, 311 U.S. 636, 637, to review the reversal of a judgment which held a lease invalid. A petition for certiorari to review the case in an earlier phase, 96 F.2d 363, was denied, 305 U.S. 600.