LA MONTAGNE V. T. W. HARVEY LUMBER CO.
645
LA
MONTAGNE 11.
T. W.
HARVEY LUMBER CO.
, L 2.
(O£rcuit Court, E. D. Wi.sconsin. January 5, 1891.)
REMOVAL Oll' CAUSES-NoN-RESIDENT DEFENDANTS-COUNTER-CLAIM.
The filing of a counter-claim in the state court by a non-resident defendant does not change his standing as defendant in the action,so as to preclude him from avail-· ing himself of the right to remove the cause to a federal tlourt, conferred on nonresident defendants by the removal act. Disapproving Lumber Co. v. Holtzoiaw, 89 Fed. Rep. 578. The claim of the plainti:tT can alone be considered as the "matter in dispute," within the meaning of the removal act; and, where plaintiff's claim is for less than $2,000, defendant's petition for the removal of the cause must be denied, though he has ilied a counter-claim against plainti:tT for a sum exceeding $2,000.
SAME-JURISDICTIONAL AMOUNT.
At Law. Motion to remand. The plaintiff, a citizen of Wisconsin, brought suit· in a state court against the defendant, a citizen of Illinois, to recover the sum of $1 ,004.07. The defendant made timely answer, pleading, inter alia, a counter-claim in the sum of $2,500, and simultaneously therewith filed in the state court its petition for the removal of the cause to the federal court. The suit being here docketed, the plaintiff moves to remand the cause, upon the ground that the matter in dispute is less than the jurisdictional amount. H. O. Fairchild, for the motion. W. H.Webste1', opposed. JENKINS, J. This court was without jurisdiction at the institution of the suit. It then involved an amount less than the amount requisite to confer jurisdiction. If jurisdiction now obtains, it is because of the counter.claim asserted by the defendant. It is insisted for the motion that, with respect to the counter-claim, the defendant stands in the light of a plaintiff, and cannot, therefore, be permitted to remove the cause to a federal court; and Lumber Co. v. Holtzclaw, 39 Fed. Rep. 578, is cited in support. There a non-resident plaintiff brought suit in a state court for an amount less than the jurisdictional amount, and as to the counter-claim treated as a defendant and permitted to remove the cause. Undoubtedly, in a general sense, he who prefers a claim is a plaintiff,-a complainant. Unquestionably, also, a counter-claim is a cause of action existing in favor of a defendant against a plaintiff. The right of counter-claim is borrowed from the civil law, and is there known as "demand in reconvention." As to it, the defendant is the actor, the plaintiff virtually a defendant. The plaintiff in the· suit may discontinue his action at will, but the counter-claim still remains. He cannot discontinue as to that. Lanu88e's Syndics v. Pimpienella, 4 Mart. (N. S.) 439; Adams v. Lewis, 7 Mart. (N. S.) 405; McDonough v. Gbpeland, 9 La. 309;. QJxe v. Downs, 9 Rob. (La.) 133; DonneU v. Parrott, 10 La. Ann. 703; De8trehan v. Fazende, 13 La. Ann. 307; Bemchy v. McLeod,32 Wis. 205. Nor can the court properly permit such
'ftDERAL REP0RTER ,voL
44. '
ance against the will of the defendant. McLeod v. Be1'tschy, 33 Wis. 176. In this respect 'it is analogous to a cross-bill in equitY."The court cannot be ousted of its jurisdiction over it by dismission of the original bill. Notwithstanding, however; the questibnstill 'remains whether a defe\ldant, although an actor or plaintiff as to the counter-claim, does 'not still the party who alone pas the right of relllovalto a federal court. The termf'defendant" was, I think, used in the removal act in its commQnlyaccepted sens'e, and' not with respect to the am,tude of parties as to\rarlous causes of action preferred in one suit. The, plaintiff is the . whom the ca)lse originates. '. The defendant is the party sumWl:\atever causes 'or action maybe permitted to be 'alleged against the plaintiff, he still remains the plaintiff' upon the record; his antagonist, the defendant. 'The state statute so treats the matter. The counter-claim is a cause of action existing in favor of a defendant, and judgment thereon is rendered to the defendant. Rev. St. Wis. l2662.' ,There is but one suit, howe\'er numerous the 'causes of action 'involved, and although some one ornlOre of theln exist in [a\'or of the In that suit,the party by whom it was instituted is the plaintiff, and so remains, whatever claims may be preferred against him. In' tha't 'suittheparty sumnloned is the defendant, so relnains, whatever rights he is permitted to assert against the plaintiff. It is to 'this p'artjr;known to the record as the defendant, being a non-resident, that the law grants the right of removal. It is not given to the original give to a plaintiff under any circumsiances. Other construction nOll-resident plaintiff, who had selected as his forum a state tribunal, or to whom the lederal court was denied because of the amount of his claim, ,the right to bring that:c01\troversy into the federal court, notwithstanding the removal actdeniesfu him that right, because his antagonist had 'aSserted a claim. Invoking 'the assistance of a state court, the plailltHl'was ,bound to know the right of the defendant to counter-claim, and, submitting to the jurisdiction,he submitted in its whole extent. West v. AUTara Oity,6 ,Wall. 139. I cannot concur in the decision in Lumber 'Co. supra. I conceive it to be in direct antagonism to West v.AufOQ'a {Jay, 8upra. There, upon the filing of a counter-claim, the ,plaiQtiffentered 8 discontinuance of his suit, and s'ought to remove to the fedeml court the counter-claim as to which he claimed to be defendant. The:supreme court deny the right. asserting that a suit removable under the section of the judiciary act then in question is one commenced ,by: a citizen of the state in which the suit is brought, by process served :on 8 defendant,s; citizen of another state, and such defendant only has ,the ,right of: l'e,movaL . There is no. suhsfantial difference between. the statute there considered :and"that now existing as to the party having the right. of removal. If, therefore, the amount of the'counter"claim can be properly deemed part,of the '1 matter in dispute," the defendant may rightfully remove theeallse.;· '. i: : Clll'tainly" in a general sense, the "'matter in dispute" in an action etnbrac,es thesubject.matter of a Butis it so embraced V!itbin,the meaning of: the removal act? Itgrants to the circuit courts
LA MONTAGNE
v.
T. W. HARVEY LUMBER CO.
647J
of the United States original cognizance, concurrent with the coui-t5· of the several states, of all suits of a civil nature at common law or in equity, "in which there shall be a controversy between citizens of different states, in which the matter in dispute exceeds,exclusive of interest and costs, the sum or value of two thousand dollars;" and provides that any such suit brought in any state court may be removed by a defendant therein, being anon-resident of the state in which the suit is brought.: It is apparent from the language of the act that no suit can now be re'" moved to a federal court which could not originally have been brought there, except when the sole objection to the original jurisdiction was the non-residence of the defendant. Here another objection existed, viz., that the" matter in dispute" at the commencement of the action did not amount in value to the sum requisite to confer jurisdiction. Can diction be conferred by the assertion of a counter-claim by the defendant? The right to assert such claim in the state court is permissive,; not obligatory. He, therefore, as to the counter-claim, has selected his forum. If he were plaintiff to the record, as he is in fact quoad thEJ counter-claim, he could not remove his cause. I, however, concede hisright so to do, if the amount of the counter-claim can properly be con'" sideredas part of the "matter in dispute," within the meaning of the act. In a series of cases under the vnrious acts from the original ciary act to the present, the supreme court has uniformly held that the jurisdictional fact of citizenship must exist at the commencement of the action, as well as at the time of removal. Insurance Co. v. Pechner, 95 U. S. 183; Gibson v. Bruce, 108 U. S. 561, 2 Sup. Ct. Rep. 873; Railway Co. v. Shirley, 111 U. S. 358, 4 Sup. Ct. Rep. 472; Railway Co. v. Swan, 111 U. S. 379, 4 Sup. Ct. Rep. 510; Akers v. Akers, 117 U. S. 197, 6 Sup. Ct. Rep. 669; Stevens v. Nichols, 130 U. S. 230, 9 Sup. Ct. Rep. 518; Crehore v. Railway Co., 131 U. S. 241, 9 Sup. Ct. Rep. 692; Jackson v. Allen, 132 U. S. 27,10 Bup. Ct. Rep. 9; Young v. Parker, 1$4 U. S. 267, 10 Sup. Ct. Rep. 75; Graves v. Corbin, 132 U. S. 571, 10 Sup. Ct. Rep. 196; La Conjiance Campagnie d'A88tlrance Contre l'Ince'n.die v. HaU, 137 U. S. 590, 11 Sup. Ct. Rep. 5. The effect of these decisions is to construe the statute as speaking to the time of the commencement of the suit. with respect to matters of jurisdiction. It must therefore be held that the" matter in dispute" at the commencement of the action must exceed in value the sum of $2,000. This is the logical result of the decisions of the supreme court. It alsQ effectuates the manifest design of congress to deny to one selecting a state court as his forum the right to remove his controversy into a federal court. The precise question has been differently ruled. The position here taken was held in Manufacturing Co. v. BroderU;k, 6 Fed. Rep. 6'54, and in Carrick v. Landman, 20 Fed. Rep. 209. A different conclusion was reached in McGinnity v. White,3 Dill. 351, and Clarkson v. Manson, Rep. 257. It is to be observed, however, with respect to the that it decided prior to any determination by former preme court upon the, subject, and that Judge DILLON predicates hili decision upon the ruling of·Mr. Justice MILLER in Johnson v. MoneUj 1
648
FEDERAL REPORTER,
vol. 44.
Woolw. 390, to the effect that a party by change of residence after suit brought may have the right of removal. This decision of Mr. Justice MILLER is counter to the ruling of the supreme court, and cannot be sustained, and Judge DILLON'S decision, bottomed upon it, must fall with it. The decision of Judge BLATCHFORD in Clarkson v.Manson is ruled in part upon his own decision in McLean v. Ra.ilway Co., 16 Blatchf.309, to the effect that, under the act of 1875, the requisite citizenship need not exist at the commencement of the suit, and the decision in Insurance Co. v. Pechner, supra, under the judiciary act of 1789, was held inapplicable. The cases of Johnson v. Monell, supra, and McGinnity v. White, supra, are cited in support of the conclusion reached. The decision was made, however, before the construction by the supreme court of the act 0£1875, and is counter to the settled law of the land. I am compelled to the conclusion that, to entitle a non-resident defendant to remove the from a state to a federal court. the jurisdictional amount or value of the matter in dispute must exist at the commencement of the suit, as well as at the time of the petition for removal; or, in other words, that it is the claim of the plaintiff in such suit which must alone be considered, and such claim must, at the commencement of the suit, as well as atthe time of application for removal, come within the jurisdictional amount. The cause will be remanded.
HARTJE
et al, v.
VULCANIZED FIBRE
Co.
(Oircuit Oourt, D. Delawnre. October 18,1890.)
t.
ESTOPPEL-IN PAIS-SILENCE.
The owners of three patents assigned the right to their use to defendants, reserving to themselves a stipulated royalty. To successfully carryon the business, defendants purchased a patent owned by one Hanna, Which, by Ii. supplemental contract, became the joint property of defendants and the owners of the three original patents. Afterwards the father of one of the owners of the three original patents acqUired all of the latter's rights therein, and later sold the same to defendants. Held, that by managing this sale, and by knowingly permitting defendants to consummate it under the belief tbat they were acquiring bis interest in all the patents, witbout informing tbem tbat no interest in the Hanna patent had IOlver passed to his father, the son was estopped from asserting any rights under that patent as against defendants. Where a cestui que trust has conveyed all its interest under the trust to others by instruments prima facie competent, and wbere tbe bona fides of tbe transfer and, of the trust has been unsuccessfully assailed on the ground that it was without consideration, and made to defraud creditors, and that both trustee and original cestui que trust were identical, and insolvent wben the assignment was made, a debtor in whose hands the individual assets of the trus.tee have been attached cannot refuse to pay to him a trust debt.
2.
TRUSTS-PROPERTY LIABLE TO ATTACHMENT.
Bill in Equity by August Hartje, trustee of Waldemar A. Schmidt, and of Henrietta Hartje and said Waldemar A. Schmidt and John H. Mueller, and said August Hartje and said Henrietta, his wife, in right of said Henrip,tta, against the Vulcanized Fibre Company of Wilmington.