406
FEDERAL REPORTER.
BUFORD JOHN DERE BOYD,
& &
CO. 'IJ. STBOTHEtl CO.
&
CONKLIN. CONKLIN.
v.
STROTHER BRADISH
& E.
Adm'r, etc., v.
and another.
Uourt, D. Iowa. November Term, 1881. ) 1. REMOVAL OF CAUSE AFTER JUDGMENT.
Where a supplemental proceeding is a mere mode of execution or relief inseparably comiected with the original judgment or decree, it cannot be removed; although some new controversy or issue between plaintiff in the original action and a new party may' arise out of the proceeding. But where such proceeding is not a mere mode of execution or relief, but involves an independent controversy with a new or different party, it may be removed into th<; federal court. .
2.
SAME-CAUSE, WHEN REMANDED.
Where the plaintiff in a suit in a state court obtained judgment against defendant, garnished certain .parties, and, after taking issue upon the answer of the garnishees, removed the issues thus made to the circuit court of the United Statcs, held,· on motion by the original defendant and the garnishees to remand the .ClI,use, that the motion be maintained, on the ground that the pro· ceedings are a. mere mode .of execution or. relief, inseparahly connected with the OrigiUlil jurlgment. . 3. SAME-MOTION TO HEMAND, WHEN DENIED·
.In an·action in the state court against a corporation, incorporated under the laws of the state of Iowa, the plaintiff obtained judgment, and, uT/oua return of the execution unsatisfied, he proceeded against certain stockholders in the corporation under the provisions of chapter 181, title 9, of the court, and removed these proceedings into the. circuit court of the United States: Held, onmotion to rl3maJ1d, that the. motion be denied, on the ground that Ituch proceedingsinvolve an independent controversy with new parties, against whom the plaintiff seeks to establish a new linbility.
Motion to Remand. Reed &; Marsh and Willett &; Willett, for the motion. Martin, Murphy &: Lynch and Brown d; Wellington, contra. LOVE, D. J. The foregoing cases are now before us upon motions to remand the same to the state courts from which they were brought into this court. The motions to remand are all placed by counsel upon the same general grounds. It is insisted as to each of these cases that it is a proceeding supplemental to the original cause out of which it grew, and being a mere appendage to the judgment rendered in the original case it cannot be separated from the same and brought for adjudication here. These several motions may therefore be considered together.
BUFORD.V.
407
is no question, of jurisdiction in ariy of these cases, as far as citizenship and the aUlount involved are concerned. Thedirst two causes are proceedings by garnishment. The plain. tiffs in these cases obtained judgments against the defendants.in ,the state Cotirt, caused certain parties to be garnished, and having taken issue ripon the answers of the garnishees, the plaintiff removed the issues thus. made for determination into this court. The original defendant and the garnishees now move to remand. 'In the third case the plaintiff, a citizen of Wisconsin, obtained a judgment in the state court against an Iowa. corporation, and having failed to obtain satisfaction of the judgment he seek!! by this action to make the present defendants, who are stockholders in the corporation;'liable, in pursuance of ·cha.pter 181, title 9, of the Code of Iowa. The plaintiff' in the present action against the defendants, one of whom is a director and the other a stockholder iIi the corpomtion, sets out ,his judgment and the return of execution nulla bona; charges the. defendants· with certain alleged frauds to his injury within the provisi6ns of the statute;' and prays judgment for his damages, The plaintiff caused the proceedings against, the to be reto remand t9:the state moved.intothis court. The court. What.. is. the true principle applicable to this classof.:removal cases? "By what rule or criterion. may we determine whether Or not a proceeding which is merely auxiliary to the main judgment or to the federal court? It is decree IUay be transferred from the idle to say that a supplemental proceeding cannot be removed because it is an appendage or sequence of the original suit. This is,atbest, but reasoning ina circle. It is as if one were to affirm, that a supplemental proceeding cannot be rembiVed. because it is a, supplemental proceeding. ltis,in fact, substituting one form of ·words.Jor another form of words. We must, it possible, find some other principle: to guide our judgment in slitch cases. It seenis, to me that the true principle is this: Where the supplemental proceeding is in acter. a mere mode of execution or of reHef, inseparably connected with the original judgment or decree, it cannot be removed,notwithstanding the faot that BOIDe new or iS8ue betw-cen .the plaintififlin the original action and a new party may-arise out of the proceeding. But where the supplemental proceeding is not mode· iO'f:execution or' Jielief, but· where it, .in Jact, inv,olvesan: indep.endent ,;controversy with some new, and different p.arty,. it may.be removed into the federal court; always, of course,
408
otherwise the proper jurisdictional facts exis,t. Every court must, in the nature of things, have the right, as well as the power, to carry its own judgments into execution. To take from any court the prerogative of executing its own judgments by proper process or by supplemental proceedings, when necessary,. would be to cripple its jurisdiction in a most essential matter. It would, therefore, be difficult to persuade us that congress meant by the provision in the act of 1875 for the removal of "suits of a civil nature" to authorize the transfer of cOlltroversies growing out of mere modes of execution and relief,thus directly interfering with the state courts in the execution of their own judgments. It is not in this sense that the words "suits of a civil nature" are ordinarily used. Now, the process of garnishment after judgment is clearly a mode of execution. Its purpose is to obtain satisfaction of the judgment out of the debtor's effects which may be in a third person's hands. The garnishment, therefore, is inseparably connected with the judgment. If money is realized it is to be applied to the satisfaction of the judgment. Suppose that an issue, taken upon the garnishee's answer, should pe removed to the federal court, (the original case remaining, as it must in the state court,) and suppose the federal court should deliver judgment against the garnishee, and by execution or otherwise the money should be collected, how could the federal court enter satisfaction, the judgment not being under its control? We see in this the embarrassment that must arise from the attempt to separate the garnishment proceeeding from the judgment, -the latter remaining in one court and the former carried to another and different court. This branch of the rule is clearly illustrated by the case of Web7;er v. Humphreys, 5 Dillon, 228. The motion in that case was manifestly a mode of execution. The plaintiff had a judgment against a Missouri corporation, and the statute of Missouri provided substantially that upon a return of nulla bona the judgment creditor might, by motion, with due notice, obtain an order from the court for execution against a stockholder to an amount equal to the balance of his unpaid stock. Here the unpaid stock is treated as assets belonging to the corporation, and the statute provides the judgment creditor with a mode of execution to reach such assets. It was held by the oircuit court for the district of Missburi that the motion could not be transferred from the state to the federal court, notwithstanding the fact that there was a new controversy between the plaintiff and a new and different party.
BUFORD V. STROTHER.
4:09
The otber branch of the rule, that there can be no removal where the supplemental proceeding is a mode of reliejinseparaJly connected with the original judgment, is illustrated by the case of Ohapman v. Bargcr, 4 Dillon, 557. In this case it was held that the proceeding nnder the occupying claimant law, for the value of improvements after judgment in ejectment, cannot be removed to the federal court. In this class of cases the statute of Iowa provides a mode of relief after judgment for the occupying claimant. Upon the filing of his petition the execution of the original judgment is to be suspended. The value of the improvements is to be ascertained, and also the value of the. land aside from the improvements. The plaintiff in the main action may thereupon -pay the appraised value of the improvements and take the property. If the plaintiff fail to do this after a reasonable time to be fixed by the court, the defendant may take the property upon paying the value of the land aside from the improvements, etc. Now it is obvious that this relief is inseparably connected with the judgment in the main action. A court not having the judgment in the main action under its cpntrol, could not give to the parties the full measure of relief provided by the statute; for supposing the owner of the land should pay for the improvements, he would be entitled to an execution to put him in possession of the property, and a writ of possession could issue only upon the judgment in ejectment. It is obvious, therefore, that the motion to remand the first two cases alloYe named must be sustained. As to the third case, it stands upon wholly different ground. The in this case is not in any sense a mode of execution or judgment. It does not aim to reach assets of the corporelief ration in the hands of a stockholder or director. It seeks no relief which is inseparably connected with the judgment against the corporation. The plaintiff in his petition charges the defendants, as stockholders and directors of the corporation, with certain fraudulent acts and representations within the terms of the 1071st section of the Code of Iowa, and prays judgment for damages as provided for in that section. The section is as follows: "Intentional fraud, in failing to comply substantially with the articles of incorporation, or in decei ving the public or individuals in relation to their means or their liabilities, shall subject those guilty thereof to fine and imprisonment, or both, at the discretion of the court. Any person who has SI1Stained injury from such fraud may recover damages therefor against those in such fraud."
410
Here is a distinct and independent cause of action given by the last clause of the section. The plaintiff's allegations are founded upon fa.cts which he claims bring him within the terms of this section. The gravamen of his action is fraud, and he prays judgment for damages. It may have been necessary 'for him to set out the jUdgment and show that an execution has been returned unsatisfied, to meet the conditions of the l083d section, but the ju,dgment is not the foundation of his action. He has a controversy with new parties distinct from that upon which the judgment was rendered; He seeks establish anew liability against these new parties. Itis further argued by defendant that this action cannot be tained here because it is in the nature of an action to enforce a statutory penalty. To this the answer is that it is hot an action to l'ecover penalties, but unliquidated damages. It is a"civil, not a penal action. Its object is not punishment, but indemnity for.a civil injury. It is to no purpose to say that the same sectionol the stat. utes provides for the punishment of the otIence committed by the defendants as a crime. It is not unusual fo{ the same statute thus to provide for indemnity by civil to the individual injured, and 'protection to the public by penal action and indiotment. The motion to remand in this case is denied. NOTE. Proceedings in garnishment process are ancillary to the main suit, and they cannot be removed after judgtnent. Pratt v.Albright, 9 :FED. REP. 634.-[ED.
MAnION
ELLIS.·
(Circuit (Jourt, E. lJ. Louisiana.
February 14, 1882.)
1.
JURISDICTION OFCmCUIT COURTS-TRANSFER OF NEGO'fIABLE PAPER TO GIVE JURISDICTION.
Where a citizen of one state transfers mortgage notes held by !lim to a citizen of another state, or a foreigner, who thereupon, by virtue of hiR citizenship, brings suit upon the same in a circuit court; the circuit court will take jurisdiction of such a suit, although the transfer was made for the purpose of giving the court jurisdiction. provided such transfer be not accompanied with an agreement to retransfer the property to the grantor after the termination of the litigation. The court, in the absence of such agreement, will not inquire into the motives which induced the transfer. De Laveaga v. Williams, 5 Sawy. 574, followed. -Reporteu by Joseph P. Hornor, l'sq., of New Orleans bar.