812
J1!1DERAL REPORTER,
vol. 45.
of common, pleas for Beaufort county some days before the regular term of this court. Although it was the 'puty of the defendant temoving to bring his case to this term, (Brown v. Murray, 43 Fed. Rep. 614,) I would, in courtesy to the state court, have withheld action until it could meet and receive the petition. The course of Judge GRESHAM in Shedd v. F'uJj,er, Fed. Rep. 609, would have been followed. But it has been brought to the attention of the court that the petition and bond were presented to the charged with the case, and that be passed upon it. to the state court can now be supposed. Its nction cannot in any way affect the course of this court in determining upon the right With regard to considerations of comity, they have no place here. is one as to the right of the citizen, not as ,to the conduct oOlle: Had an actionheon brought in this court, after the jurisstate court had beJ:ln engaged over thesubjMt-r\:J.atter in auot4er thep the court could properly consider whether it ought qot t<;> th,e parties to the tribunal, first charged with the settlement 4isppw! But this iSlL case, brought in the state court, removed iPito tp'iSi, C9J.l.l't. " In petition forremoval, this court canQ<;>,t:lUoon, anY l'eHection upon the, state court. It simply considers: ,¥hetherthe petitioners have the right to the removal. If they have, reit would be a denial of right.,
FITZGERALD v.'MISSOURI PAC.
Ry. Co. et al.
D. Nebrqsk.q,. April 16, 1801.) , I.REMovd CAUSils-AME'Nnl.rENT oJ! ApPLIOATION. '. . , ··Thecase as,made by the lletition for removal and the pleadings at the time of the . removal is. t4e test of the rIght to remove; :and no amendment call be made in the \ .circuitctnirt;.sotting up grounds for removill;which were not presented to the state : .. court'oD,thembtion to remove. :' ' 21 ,FEPERAL OotrnTS-DEOISIONS 011' STATE COURTs. ' The,decisill1J, of the supreme court of the. state that a particular corporation is a, ,. state is binding on thefeperalcourt. ' .
When a consolidated company is 'formed, by. the. union. of 8evElral corporations chartered states It is a citizen .ofeach of the states which granted the . charter to any 'one of its constituent companies, and When sued in one of these states it cannot' claim the right of l'emovar on the ground that it is also a citizen of another state. ' , ' , 'SAME.. ;' . , " , . . ' ' ", i A consolidated corporation which bears the same name in three states, and has ! one board of directors and the same and operates the, road as lme euthe same purposes, exercises the same , ,tire line" and, designed ;. general corporate powers and ·fu·nctIons in all'the states, is not the same· corporation in each state. While it is a unit, and acts as a whole, in the transaction oJ its corporate business,! it is not a corporation at large, nor is it a joint corporation of the. three states..' uike all corporations, it :lIlUst have a legal d wellinl!' place, and it dweHliI in i,hree states, and is a separate ll:DQ.sinl!'le entity in each. .It is,. in 'effect, a c'orliotate having no citizenship ol. its own distinct frOm its constituent bl1t indentical with each. ' '
8/
OP CORPORATldNS-bITIZENsntp;
FITZGERALD .,. MISSOURI PAO. BY. CO. "S.UIE-CoNTRACTS.
6.,
In the conduct of its corporate business the consolidated corporation acts as a untt,-as one corporation, and not three; and, in the absence of a statutory provision to the contrary, it may transact its corporate business in one state for all, and the contracts it enters iutO and the liabilities it incurs in one state are binding upon it in all the states, and may be enforced against it in anyone of them, when the action is transitory.
EMINENT DOM.UN_SEOURING RIGHT OJ! WAY.
The act of congress prescribinA' the mode in which a raUroad company may seheld that it is the cure the right of way through the public lands duty of the railroad company, and not ·the ·contractor builaing the road,to do the things required by the act to secure the right of way. .'
7.
CpRPORA.TIONS-CONTROL OJ!. CORPORA.TE PROPERTY.
a.
.. The owner of all the stock and bonds of a corporation does not. !l.wn the corporate proJX'lrty. The corporate property, which includes all rights of' action and claims for' damages, belongs to the corporation, and is subject to theIUanageIUent and control of its boa1ld of directors. . federal question is raised in a case by an answer that ill bad In substancewlth· out reference to the federal question. Aoause is not removable simply beoause in its. progress it may become necessal'1 OJ!
QUESTION.
,
·
.'
.
G.8m.
'
ties as!1' the w,eanlng of the act, there is no federal controversy between them. The' deCision of the oase, or somB material issue in it, mu.st depend upon a struction of the act claimed by one party and· denied by the'other. A simple' aVel',men$; that such is .the fao'is stating a conclusion; and is not sufllcient; the facta it to be true. must be set oU,t.
to construe Or appllan act of congress. .Unless there is a·disPl1te between the
'con-
It.
(SilU,aou8
circuit COlIl'!"in a 18 . doubtflil, all doubt as to what the court should do is dispelled, and the cause Win .be, J'llma.nded. This rule is in harmony With. the spirit and.d,eSign oft.he act of CO"",. , the act which allowed .an· appeal or writ of lIftOr from an order remal!Nij.g a by the Ootirt.)
In Equity. . Removal from state court. Marquett. Deweese BaU. for plaintiff. B. P.Waggener.and R. S. HalJ,. for defendants. .. CALDWELL, J. This cause was by tijedefendant the .Missouri Pacific Railway Company frqm the-state court into,. this court. The qu,estiqnnow to be considered is whethe.r it was properlyremQved. The suit is brought by the plaintiff a stockholder in the defendant corporatioll the. Fitzgerald & Mallory Compa,ny. designateq as the "Construction Company. ,. on behalf of himsel.f and all ntherstookholders of that company. tocoDlpel an accounting between .that COfDpanyand the defendant the Missouri Pacific Railway Company. The railway company sets up two groun$ for removal,-diverse citizenship a federal question. , ' . ,.... . ,',' '. .t. ,The averments in. the petition for removal touching the citizenship ohhe parties are. as follows: II p.etitioner. f\lrther avers that at tllecommenqement suit the said,p1aintitI was and still isa citizen of. t)l" IItate Qf NebraSka, anI! at the of thissliit the defendant the ¥aIloryOQnstructi<?n COmpany was and still isa corpor"tion' created,ohartered,alid"organized underalld 1;>y virtue of the· laws of the 'state ot' Iowa; and' your petitioner averstbat it is ad vised and beHeves, and so charges the fact to be, that for the IIPfpose of tbisaction it w:as .at the commencement ot"thil;1 suit. and. still is. a t}OrPQ1"ation chaJ:tered. under. and thB "
REPORmER, vol.
45, ': ;
:!lction laws of the state of Kansas; that priorto the your'petitioner was made up of three severalconstituelit companies. ,to-wit, a railroad :company creat!ld, andjlxisting under,a'M by 'vir,tue' of the laws, ot Missouri; raiIrpl'd company ..tered, organized, created, and ,existJingunder the la-ws' Gf.tQestate of Kansas; and a railroad company chartered. organized, created, and exiSting under'the laws of the state of Nebraska; ,that the said M:issouri and Kansas corporations were,by due proceedings ,uad',under and by 'virtuBotthe laws of each of said several states, duly consolidated under the naille of the·' Missou ri Pacific Railway Company,' and subsequent thereto the said consolidated complfny was, by d,ueproceedings had in consolidatM Missouri Pacific Rail)VaY CQlUpany in Nebraska,. which said lattetdo'Q,solidation was in all, respects ul)der and in pursuance,oHhe consolidation and laws,of the state of Nebraska, and that for the purpose of all contracts entered intoin said state of Nebraska. 311d aH causes of ',accrued against said the ,MiiiSOlll'i Pacific Rai1way Company in saldstate of Nebraska., and for the enforcement of all statutory obligations by said consolidation, it became and was, and still is. a cm3,ted, ,and Elxisting in.,pursuance of the laws of the stateofN'ebraska; blltyonrpetitioner avers, that saidpretendedcallse .of ae/5en&rth filed herein arose and accrlled Ollt ofa cerentt'red into:,o.lltween the said F,itzgerald and MallQry Construction C6mpanyand the said: tJheMissolll'i Padlic Railway Company, as chartered, organized, created, and eXisting tmderl:\nd by virtue of the laws of the ,. · ., Land )'our petitioner avers' that. itis ail,tl1at, hy saidmattersalld thIngs.ftl!: the purpose of this actionion'lYI andby'rtlasOll', Of the 0bligations,if any. growing out of contract'relation'S betwel'h"y:b'lir r>etitioner and the said Fitzgel'alil &, ¥allory Construction Company. your petitioner was at the COmlU\lnCement of this sll-It, and still is, a citizen of the state of Kansas." ' , ' , Like avermentR are made in the answer filed with for removal in the state court. The case as made by the petition 'for removal and the pleadiIIgs'1at,thetime of the removal is t,he test of the right to remove. Graves v. Corbin, 132 U. S. 571, 10 Sup. Ct. Rep. 191fj Ja'ck8on'v. Allen, 182 U.S. 27,10 Sop. Ct. Rep. 9 ;:Roth8child v. Matthew8,22 Fed. Rep:&l'Stttten8v. Nichola, 130 U. 8.230,'9 Sup. Ct. Rep. 518. Noamendmel'it,cll.n he made in the circuit court setting up grounds forremovBI which we-te not to the state' court on the ll1btion to remove. Id., 8ndOumerlm v; Hodges, 127 'U.S. 322, 8 Sup. Ct. Rep. 1154 j(}l'ehdtev;Raib'oad eo.;r3! U.S. 240, 9:Sup; Ct. Rep. 692. The supreme court of Nebraskrihasdecided that the rai'Iway COI\1pany is a corporation of the state,' The decision was rendered in a case btoughtagainstthe railway-company for the purpose ofdeteri'nining that question. State v. RaitwayOo., 25 Neb. 164, 41 N. W.Rep.127.The decisiotiis cOilclUsive'Upbli the question iri this court, and puts an end to the defendant's claim to remove this cause on the ground of citizenehip;' But, independentl,Y' of ,that;' decision, upon ot .for itsuffi!cientl:VAB:p,¢ll.'rs; tqat t.he of Its set, out hLthe petition for and"the answer"issimply 81 denial of. the law. It has ,eettled Jaw that wh'eD"Il: 'Consol'idated 'comt>atiy is' formed by the' uniofi(jf severalcorporauotischa'rtereclby differtil1tStates it is a: citizen of eaca!'Of
Ae-
FITZGERALD
·PAC. RY'. CO.
815
the states which granted the ,charter to 'anyone of its constituent oompanies,and when sued in one ·of those statJes it, cannot 'claim the right of removalon the grouhd thatitis also a citilZen of another state. Dill. Rem., Causes, § 104, and cases: cited ; Mor.' 'Ftiv. Corp.§ 101; Fost. Fed. Pro § 19. ltis expressly averred in the petition forremoval that the defendanttheMissouriPacific Railway Company was formed by the consolidation of companies originally chartered by the states of Missouri, Kansas,and·Nebraska. Thistnllkes the consolidated company, for all purposes of jurisdiction in tIle federal courts, a citizen of each of those states. it bearsthesamenatne in the three states, has one board of dit'ectors and the' sflme shareholders, alid operates the road as one entire line, and is designed to accomplish the same purposes, and exerciseS the same general corporate and functions in all the states, it is not the !samecorporation in each state, but a distinct and separate entity in eaQP'-' , Itis a corporate trinity, having no citizenship of its own diStinctfromdts constituent members, but a citizenship identioal with eacml r ;-Bythe consolidation the corporation oe One state did not become acorporldion of another, nor wll.seithernierged iu the other. The cor.. poration of eaoh state.bll-d adistinctlegislativepaternity, and the sepa.rate identity'Of each as aaorporatiollof the state 'by which it was created, and as a citizen of that state, was Dot lost by the consolidation. Nor could thecorisolidated company become a corporlJ.tion of three stAtes witli(mt being a corporation ofeach or ohither. While the consolidated MrporatioD is, a ,unit, and acts as a whole in the transaction of its corporate business, it is notacorporll.tionaHarge,'noris it ajoillt corporation of Like aU' corporations, it 'tnust have '8. legal dwelling place. not created by act of congress, dwells in a state:. This,consolidated corporation dwells in three states, and is a separate and single entity in each. For the purposes of jurisdiction in thefetleral CbUrts, and securing to the states the exercise of theirjustpoweni over corporations oftheir own crl'latioD; and over property within their jurisdiction, the consolidated company is conclusively presumed,tobe a citizen of each of the states whose lawBl1nd corpol'lltions contributed to its forma:tion. It enjoys in ooch state a11the pow61's and privileges the corporation there chartered had,:andmnst answer in the coiIrts and is amenable to the laws of each!'state respectively as a corporation of that state. Railway 00. V. W'hitto'J1,;:13Wall; 2'lOS ·M'1I1J;&iv.Dow8, 94U. S. 444; Farnum v. Glnal Co, jlSumn. 46; St. Louis, A.« T. H. R. 00. v. Indianapoli8 « St. L. R. Co. ,'9 Biss. 144; same case under title of Pennsylvania R. Co. v. St. Louis, etc., R. Co., 118 U. S. 290, 6 Sup. Ct. Rep. 1094; Racine, etc.; R. 01; v. Farmer8' L. « T. Co., 49 Ill. 331; Quincy R. 00. v. Adam8 00.,88 Ill. 615'; Chicago, etc., OJ. V. Auditor General, 53 Mich. 91, 18' N. W. Horne v... Railroad 62. N. H. 454; Paul V. Baltimore, etc.,·R.' Co., 44 Fed. IteP. 513; Na$hua&-L. R. Cory. v. Boston« L.ll: .ooTp.,136 U. S. 356,382, 10 Sup. Ct. Rep.1004j Pacific Ry..00. V. Mis·.R. Co., 23 Fed. Rep. 565; Guinault v. Railroad 00., (La.) 6 Soutb..Rep.850; Central Prust GJ. V. St.Louis, etc., R. Co., 41 Fed. Rep.
816
FEDERAL REPORTER,
551. It is ,not averred in the petition for removal that the defendant is not a citizen of Nebraska. The averment is "that for the purposes of thisacti9J1 it was at the commeneement of this suit, and still is, a corpOJ:a.ti<mQhartered, incorporated, and created under and by of the This ambiguous and insufficient averment !a.ws.ofthe state of as to .citizenship is afterwards explained to mean that the subject-matter of. the suit is such that the defendant is not liable to a suit thereon in Nebraska, but only in Kansas. ': But a Nebraska corporation cannot re. movea suit from a court of that state into the circuit court of the United it thinks the suit ought to have been brought against it, corporation, in state. If the defendant is not lial;ll.e ,to he sued in this state for the subject-matter of the action, that is grq1jlnd for defense. but is no cau.se for removal. But in the conduct of its'corporate business the consolidated corporation acts as a unit,-as one Q<j>r,pora-tion and not three; and, in the absence of ,a statutory contrary, it may transMtits corporate business in one state foralljianll. the contrae:ta ite.nters into and the liabilities it incurs in one state are' binding upon iOn aU the, states., and maybe .enforced against it of them when the: action is transitory. Graham v. Railroad (Jp"ll$U., S. 169, 6Sup .·CtlJ Rep. 1009; Horne v. Railroad 00.,62 N. H:. " 2. Thecllse made by the bill involves no federal question. The facts relied upon as showing that there iaa federal question in the case are set out in the ,petition for removaLand answer, and are in substance as: follows': The Oonstruction. Company-in fotm a defendant, ,but: iIi reality the plaintif,anri to ,be so regarded iIhthe consideration of this question -,entet;ed into a written contract on the 28tb day of April, 1886, with & Atlantic Railway Company__hereafter desigthe nated as the" Denver Company "-by which it agreed toconstl'uct for the latter company "8 line of railroad from the east line of Kansas to the west line,thereof," for which it Wl'LSto receive $16,000 full-paid stock, for municipal and county aid, estimated at $3,500 (less the per mile,)and$16,OOO of the first mortgage bonds of the Denver Company, for each .mile of road constructed. That contr.act stipulated that the Denver Company "agrees to procure or cause to be procured the right of way for .said line of railroad, at the proper time, in advance of the wor.k, so as not to impede or delay-construction. * * *)) On the 4th day of May, 1886, the. defendant the Missouri Pacific Railway Company and the Construction Com pauyentered into a contract, the provillionsofwhich, so far as are material to this question. are as follows;, . ' . of agreement. made on the fourth day of May, 1886, be· tween the Millsouri Pacific Railway Company, party of the first part, and the Fit:l;gerald &, Mallory party of se.cond part, witWhereas, the party of secondpart has made a contract with the Denver, Memphis & Atlantic RaUway Company to construct its road from Chetopa. deross the state of Kansas. on a line heretofore agreed upon, (a copy of which is hereto attached and made a part of this agreement;) and whereas. the MissourlP!icific Railway Company,is desirous of obtaining control :of thEl
FITZGERALD V.MISSOURI PAC. BY. CO.
817
is agreed as follows: F&.rst. The party of the second pat:t sell to the party of the first part all of the securities which the party of. the second part is to receive uQder the terms of a,contract dated April 28, 1886, between the Fitzgerald & Mallory Construction Company and the Denver; Memphis & A.tlantic Railway Company. for the construction of its roRd; said securities amountiag to sixtef.n thousand (16.000) dollars per mile of. stock and sixteen thousand (16,000) per mile of first mortgage bonds. less theampunt of stock that has to be given for municipal and county aid. estithirty-five hundred (3,500) per mile, and receive :in full payDlent fof. the same thousand (12,000) per mile of Missouri Pacific way five;(5) per ceht. bonds, to be secured by a deposit of the securitIes above refe'rredtowith a trustee. * * *" . alleged that under the provisions of this contract the defendant the Construction Company the bonds and stock of the Den.., ver: G9mpany, in exchange for its own bonds, as provided in t116 contract r And it iSl;loverred that about .15 miles of,the road of the Denver Company was the public landsofthe United States, wi.thout securiJlg way over such lanqs in the mode by the a'ft Qf the, congress'j anq it is alleged this fault of .the pany, .and the defendant plea,qf!l it as a "failure of consideration" for "the, so" sold to.the deff'lndllllt to the extent of $12,000 per mile fqr each. mile of the road. construoted over the government that being the .amoullt .per mile that 'the defendant paid the Construction Company fqr. thes.tock and first bonds of the Denver Company under the,cQlltJ;act of May 4, 1886. It is lluid thisdefe.nse is founded on the regulating ·lllode of. acquiring ..the right of way. ove),' act .government lands, and involves the pI:oper construotion of the act. There are answers to this contention.· If the right of way was pot,pro;mred over the government lands, it wall no fault of the Constructio;n Company. between that company and the Denvel," Compl)ny, expressly providEls that .the latter company shall "procure or cause to be procured the right of way for said line of railroad." The, defe.ndant seeks to avoid the force of this of the contract by allegiQg that after its executionwas agreed and understood that said clause of said contract should be construed to mean that the said Fitzgerald & Mallory Construction Company should J:!avethe right to use the name of the said Denver. Memphis & At. lantic Railway to the extent that it was lawful so to do, for the purpose of exercilling tMright of eminent dmt13in. and securing the lawful right of way over the lands and public domains of the United States."
It
·'It
But seemingly not satisfied with the accuracy of this statement of the new agreement, the pleader immediately restates and defines.it in these terms: "That istos8y, that the otlicers:o{the said Denver, Memphis & Atlantic Railway were to act under the direction and control of the said l!'itzgerald "iri Mallory Construction Company ill securing or attempting to secure, by demnation proceedings and otherwise, the necessary right of way_ * * *'; ,If the firststatemept of the understanding was. not defective, or of dOQbtful Dl.eaniI,),g, the last was not necessary, and the pleadet did a vain
v.45F.no.12-52
818 of the
FEDERAL .REPORTER,
thillg to 'insert 'it.. TMlilst statementconttols,; 'But'neitlIer statetnent .i'tnBbse,d61lthe Consttuction Company the :duty of govern,ment lands., ., securing of act of the railroad compn{lyto file ,H with the secretary of 'the interior: a .(lOpy of its articles of 'incorporation,'· and, due proof of its organization under the same," and "file'with the''1'egiswr of district where Buoh l!mdis,lObateda profile Of its road." Act Marc):l 3, 1875, (t8 U. I?" ",.'.t'pe act of. collgress requires, the companY'to do the law, and these thlOgS. The Denver Company must be held to know the requ,irements of the act of . The railroad company, ana not the Oo*struC'tion Company, had the possession and of its''articles of and: 'proof of its organization; and it alone could' determine' 'the ,"profile of its road "and furnish 1m authentic' }copy.' :' Whether :Ui'e agreement was that the Oonstruotion Companyi"sli6Uldfiave use the name:oHheDenver that .lawful " 'in' procuring the iright of ' way, .'11$ tii'St)ltated; it 'thtljj 'the II ?fficers" :6f tbe Denver Company tb aot t:'n1ller 'thEj"aitectidnttbd control 0 f the" Construetlon ,Com\vay, 'stated.. is immaterial. It w!is'ndt "lllWful n orposSlble for the Cdnstructipn 'Cmnpany to do the tMact'of (longress to secure the i'igMof way over the gqverilment'liJ.ndsjand companywiUnotbe heard to corn· pltiin;that not give "direction" to the offitiltoad :cotnpitnyilo'do thati Wliichtt(e'act of congress itself plain1y told theib todo;:andwlli<:htpey alone could do. '.: " . 'Blltilsstnriingthat it was -legally possi!:>le for the Construction Cdmpany to secul'e ofwity'over the '. lands, arid that it was unCiel' a bindJng dbligation to'do so, this was ill. duty it owed to the DenverCompitiiy, and n()f toJthe breach of tion. in this regard can defendant in this suit. ·'It is not';material 'to:itrquihiwl'1ltt' redress tM'law would afi'ordthe Denver Company for a breach of such an obligation. TbatcomtJany is nota part)'l to this :&1.'1it; :and,thei'defendant (Ioes, not stand in its shoes, and itsrigIits,'Rs it is do.. It notpreten:dedthat tne.stdok and bonds soldbp.ddehvered to the desuch as for., ., They are legal and V811d the and by the act of slJJe the Construction CompllDy warranted nothing more. It did not wsrrn:ntthe title, of the to itiJfight of way.' ,The defendil.llt got eXlldly what it (jtJnlracted for; butcdfiiplilib's that the Denver Company has an imperfect title to a part of its right of way. How this faOt;has damaged the defendant" or cQlI1stitutes'lat " failure of ':for}hest,ock and shown. The owner' g(all. the' R?,<?fpbration own the property. The corporatf\ property; which includes all rights of action and claims for damages,:b'elongsto the corporation, :and is SUbject to the Olanngement and control ,of its ·boord 'of And if it be
,or
auon
MISSPUIU PAC. RY. CO.
819
cQ11re,ded that the defendant owns all the and bonds. of the Denver qQn,Jpany.that fact gives itp!l:title to or in the right of way or other property .of that company. which itcaIl make the basis of an action or plea in its behalf. If the Construction Company is answerable to any oneJor ,the defectiv[etitle to the right of way, it is to the Denver Company, J!,nd not to the defendant. Nor is this all. It is not even alleged that. the Denver has disturbed in its use and enjoyment of the right of way over the ,government lands, or that it has been to pay, or pas paid, anything on account thereof, or thaqhe Denver Company has 4efaulted,inthe payment of the principal or interest of its bonds, or thatit is insolven,t, or that the defendant still OW118 the stock and bonds. The defendant's answeris bad, and must be so held,. reference tQ. the act of cong/:,ess. No federal question can arise Qnan answer irremediably bad.in substance. Moreover, if the answer set up a, valid contra\}ton the part, <>ftbe Construction CompanY to procure tberigbt of way' the public lands of the United aQd averred a breach 9f that c<mtract, and.it sufficiently appeared. tbat the Coustruction was liable to account to tbe defendant for tbat breach, (and this. as we have, seen. is asauming much more tran is shown-by 111e defendant's these facts would not lIhow that there was a question in the case that';would warrant its removal. In the. call6;8uPP9lled, a denial that tha Company procured t4e right of way Qver the land!l9.f tlle United .states pro1;Jablyresult in found in favor 9fthe Qete!1dant, thctn an ,ili!Sue of la"l legA1effect of! !Juch failure.,' this is. not enough. . '8:uswer. or for. ,emoval would hav/il to go fUl'tl1er, ..the construction oCtbe.actof congrel'lS relating to the m9de of rig9.t of way .was in dispute, bet.ween the parties, and this must be done by stating facts that. . A: that !!lois: stating ,not enough.. Water po. :v. 9,6 V! !3.199. ....." If. dispute the pl,ll'ties as to the meaning of an act iSqlO federal contr()Vf'1rsY between them,AI)d no cause fill' removal.. .l'llel>l;1preme has the rule on tbis subject. 'rhe court, speaking throug4 Cbief JQstice WAITE,says: ..A eltllse'eannQt·be,i'emovedfrom a state eourt simply because, in the.progress ottM .it mltyljecome to gi ve a. to the laws orthe Unlt.p,d Statt's.Tlle decision oUhe cll,se mjlst deJ,lend \111()ntlmt construction... slIitmust. in p"rt. at least; put of a ¢o!ltrovPl'sybftween the parties in regal"dtothe opf'ratiorl and,eftect of the coilSUtutiol1oi' law8upon the tacts Water 00.· v;·Keye8, 8upra. BRADL,EY'S show the opinion expressesithe delibe1llote &nd of.,the court on point. : The circQ.l1li to the ,Trafton v. .V.Qfl9fltn,,8Il Fed. Rep. 626j Str:tev. Rauroqd Ch n 33 Fed. Rep. 391; ROthachud.v,)faUhews, 22 .f:ed".rB.eP' 6... " .. : "It is tAA6 if it is .be; that ,ca.sell.QdMr·. CQnsidered, and
820
FEDERAL
'REPORTER;' vol. 45.
jurisdiction, of this court. But theconvel'seis the rule. When it is settled that the jurisdiction of the court in a removal cause is doubtful, all doubt as to what the court should do is dispelled, and the cause will betemanded. This rule is in harmony with the spirit and design of the act of congress. Congress has gone as far as it can to diminish the evils resulting from questions of disputed or doubtful jurisdiction in such cases by repealing the act which allowed an appeal or writ of error from anoMer reilianding a cause. Under the existing law, an order remand. ing a cause eliminates the question of jurisdiction from the case, and remits to state court for trial upon its merits. .If it turns out on the trial of the cause in the state court that it involvesa federal question, and the right claimed under the federal law is denied to the party ing it, the judgment of the state court on that question may be reviewed in the supreme court (If'the United States. Buttheotder remanding the cause is pot subject to review, and the case is fitiaHy"disposed of on its merits; :and the litigation On the other. hand, the erroneous assumptiorl;of jurisdiction iii '8; rem,o",al caUse works serious hardship. After the,a:elay and expense incident' f6[ the preparation and trial of'S. case on 1t8ttierits, the beatenpartyl maytakethecase to the supreme court, \vhate it must be reversed for wailt'of jurisdiction, and reln'anded 'to the state.(ll)urt. Even the party 'who removes' the elise is hot bound by his own act, but, if beaten on the- merits in the circuit court, 'may appeal to' the supreme court, arid will' heard to say that the drcuitcburterred .in taking of the, case, though it did EtO on his own petitionjand after years of expensive"Titlgation the parties to a suit improperly reriJdved from the state cburtfind theniselves just Where they were when the calise was removed."Everything done in :the case after removaldounts for nothingjthe case is no nearer an end ob its merits than when it was begun. ' If the refusal to remand; like'thENJrder'to remand; settled for all time the question of jurisdiction, and the, case was retained for trial on its merits only, there wotildbe more reason for cont:eIiding that the doubt shouldbe resolved. remanding the case. Bnt,as we have seen; if the case is retained, the question.' of jurisdictidn remains an issue for final determination in the supreme court on the' appeal of the party beaten· on the merits in ' the' circuit, court. The case of. First Nat. Bank of Ohicagov. Corbin, also entitled Graves v. Corbin, 132 U. S.571; 10 Sup. Ct; Rep. serves to illustrate the' injustice and likllly to result froJ;D. resolvin{doubts in fl!.vp,r,of the removability of .cases.' ThliLt case }Va;S removed, state< QOur,1; into the <;ircuH court on the petition of the bank, a defendant. Upon final hearing on the merits there was'a deciree' in favor of the plaintiff, alid against the bank, and it appealed to thesnpreme court, and in that 'court made the point that the circuit'courtacquired no jurisdiction of the cause'by the removal' on its own petition. Against this inconsistent,' and wha.t niay justly be termedullconscionable, acti()Ilof the1.bank, theplaiiltitf pr6tested. but his protest was in vain. The " ' his for want ofJ lD" the elrcU It co urtafter he bas pil08ecutell hIS' suit
..CARSON .". DONALDSON.
821
in that {'ourt snccessfully,on his being taken into that court adversely more than six years But the court could not relieve from the. hardship, and the judgment had to be reversed for want of jurisdiction, and the cause remanded to the state court. The benefit of a reasonable doubt should never be given to a practice that protracts and fosters litigation and multiplies costs. The sound rule on this subject is st{lted by J Q,dge' LoVE in Kessinger v. Vannatta, 27 Fed. Rep. 890. That learned and experienced judge said: "It is the constant practice ot this court "to remand· Muses brought; here from the state courts in cases of doubtful jurisdiction. The reason of this practice is obvious and conclusive. In the first place, the jurisdiction of the fltate court is unquestionable. It is, at least, concurrent with this court. But the jurisdiction of this court depends upon special facts, and it is in the present case, to say the least, doubtful. It is the safer and wiser course to send a cause for trial to, i'c,ourtof unqUl;ls1;ionable jurJsdiction, rather than retain it here. and go through all the 'forms ot trial, when the jurisdiction is doubtful." ,.- ,.r It is neeealess to say the case at bar is not a doubtful one. It is perfectly clear it must be remanded, and it The defendant the Missouri Pacifio Raihvsy Company'\Vill be required to pay the costs of relhoval,ln.cluding aU 'th,e;costs incurr.ed in the cause in this court. . . t · . . . ' ',',."". ' . : · ",
/:
CARSON
v.' DONAJ,DSON
et aL . ','!;'
" OGLE. V. SAME.,
(Oircu4tOowrt, D. WatMngton;
w:. D.
March 4, 1891.)
HANFORD, J. 'I:hese cases were. coIDII;lElnQed in a territorial district .court, and were pending when the state of.Washington was admitted iuto the Union, ,and were transferred to thiacourt by order of the superior court of Pierce countY,upon a pEltition of one of the defendants, a citizen of the state ofOr.egon, showing as ground for Samuel the jurisdiction ofthis court that there is involved in each of the cases a .separate contro.v;ersy between himself and :plaintiffs,who: are' now eiti. zens of the state of Washington, and who were at the time the Oases were {Jommence!l residents,of. the of Washington. The attorney Jor the plaintiffs has contended that there is no separate controversy between . the plaintiffs aqdthe defepslaptCoulter,and 'on that ground alone .has '