Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Celanese Corp. v. Vandalia Warehouse Corp.

April 15, 1970

CELANESE CORPORATION OF AMERICA AND FEDERAL INSURANCE COMPANY, PLAINTIFFS-APPELLEES,
v.
VANDALIA WAREHOUSE CORPORATION, DEFENDANT-APPELLANT



Swygert, Chief Judge, and Kiley and Cummings, Circuit Judges.

Author: Cummings

CUMMINGS, Circuit Judge.

Plaintiff Celanese Corporation of America ("Celanese"), a New York corporation, sued the Vandalia Warehouse Corporation ("Vandalia") of Vandalia, Illinois, for failure to deliver to plaintiff 441 stored Columbia wood-pulp rolls. These goods were damaged by water while in defendant's custody. Federal Insurance Company ("Federal"), a New Jersey corporation, was joined as an additional party plaintiff, for it had paid Celanese for its loss and sued as subrogee. Defendant claimed that the damage was caused by an act of God, namely, a heavy wind and rainstorm. However, a jury verdict was rendered for plaintiffs, and a $16,224.25 judgment was entered for them, resulting in this appeal.

Jurisdiction

Defendant first argues that the trial court had no diversity jurisdiction because both plaintiffs, although foreign corporations, maintain "a principal place of business in the state of Illinois." This ground was raised after the trial, in a motion for judgment notwithstanding the verdict. An affidavit supporting that motion asserted that Federal had a Chicago office, was licensed to do business in Illinois and "was transacting a major amount of its insurance business" in Illinois in 1968. The affidavit also stated that Celanese was licensed to do business in Illinois, with four places of business in Chicago and its suburbs. No counter-affidavits were filed.

Section 1332(c) of the Judicial Code (28 U.S.C. § 1332(c)) provides:

"For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." (Emphasis supplied.)

The phrase "its principal place of business" in this statute refers to a corporation's single place of business (1 Moore's Federal Practice para. 0.77[3-1], p. 717.60 (1964)), and connotes its "center of corporate activity and * * * nerve center." Sabo v. Standard Oil Company of Indiana, 295 F.2d 893, 895 (7th Cir. 1961). The Celanese complaint alleged that its principal place of business was "in a state other than Illinois," and Federal's complaint alleged that its principal place of business was in the State of New York. These allegations were not controverted in the Answers, although the post-judgment Answer to the Federal complaint alleged that Federal had "a principal place of business in Illinois." At the oral argument here, defendant's counsel did not deny that the principal place of business of both Celanese and Federal was in New York. His affidavit does not show that either plaintiff had its principal place of business in Illinois. Under Section 1332(c) diversity of citizenship existed, and the district court therefore correctly denied the first ground of the motion for judgment notwithstanding the verdict.

Sufficiency of the Evidence

Defendant next urges that it was entitled to a directed verdict on the ground that the evidence showed that the damage was caused by a storm and not by its negligence. It is unquestioned that the goods of Celanese were delivered to Vandalia in good condition but were damaged by water on August 16, 1966, while stored in Vandalia's warehouse. It is well settled under Illinois law that these facts establish a prima facie case of negligence and shift the burden of proceeding to the bailee. 4 Illinois Law and Practice, "Bailments," § 19, p. 682 (1953). The ultimate burden of proof, however, remains on the bailor, and the bailee may rebut the presumption of negligence with evidence of due care. Miles v. International Hotel Co., 289 Ill. 320, 327-328, 124 N.E. 599 (1919); Clark v. Fields, 37 Ill.2d 583, 586, 229 N.E.2d 676 (1967). In this case, Celanese presented evidence of Vandalia's negligence which warranted submission of the case to the jury.

The evidence showed that the damage was caused by water entering the warehouse through a small opening in the roof. The roofing was only two years old and the building was periodically inspected. The roof was supported by horizontal beams supported by vertical columns. The beam ends rested in sockets or beam pockets in the brick walls. On the day of the accident one beam end slipped a few inches from a beam pocket, causing the roof to drop, with an attendant opening therein. On that day, there was a fifteen-minute windstorm with lightning and a downpour.

Plaintiffs' rebuttal evidence revealed that at the Vandalia airport, three miles from the warehouse, the maximum wind velocity on the critical date was 13.8 miles per hour, with gusts up to 20.7 miles per hour, and that rainfall totaled a little over two-tenths of an inch. Plaintiffs also showed that the vertical support columns beneath the beams were leaning in different directions. After the accident, the beam was put back in its pocket and a short timber post was placed under it for additional support.

Although the jury could have concluded that the roof opening was caused by lightning or wind damage, there was evidence that would permit it to find that the warehouse was in an unsafe condition and that the storm was only of foreseeable intensity.*fn1 Therefore, on the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.