McCulloch v. Southern Railway Co.

From the judgment of his Honor that the cause was not removable, the Southern Railway Co. appealed. The history of this case is as follows: Action was commenced 1 August, 1903. The pleadings were filed and the cause came on for trial at the July Term, 1907, and a judgment was rendered in favor of defendants, dismissing the action. From this judgment, plaintiffs appealed to the Supreme Court, and the appeal was heard at the Fall *Page 225 Term, 1907, upon an agreed state of facts, McCulloch v. R. R., 146 N.C. 316. A new trial was awarded, and the court suggested to plaintiff an amendment to the pleadings. The plaintiff, on the first day of April Term, 1908, of GUILFORD, acting in accordance with the suggestion of this Court, filed an amendment to the complaint, and instantly the defendant Southern Railway Co. filed a petition for removal. The court overruled the motion to remove, and defendant Southern Railway Co. appealed. (307) The Southern Railway Co. is the lessee of the North Carolina Railroad Co., and, as such, is operating the line of railway extending from Charlotte, through Greensboro, to Goldsboro. As such lessor the North Carolina Company is liable for the acts of the lessee done in the performance of the duties of the lessor as a common carrier. The effect of the franchise to construct and operate a railroad is to require the licensee to perform certain public duties, and the licensee can not avoid its part of this contract with the sovereign by subletting its franchise. The licensee from the State, nevertheless, remains liable for the manner in which its lessee performs these public duties, which the lessor has agreed with the public to perform. Logan v. R. R., 116 N.C. 940. Upon no other principle of law can the decision in the Logan case be sustained. It has never been held by any court that the lessor of a railroad company is liable for the tortious acts of its lessee, done not while carrying on the business of its lessor, but while carrying on an entirely separate and distinct, though similar business of its own. The gravamen of the plaintiff's complaint is, that they are the owners and in possession of a tract of land on which the Southern Railway has committed a trespass, and that it is undertaking to justify its tortious act under a certain deed to the North Carolina Company, its lessor, and that the trespass of the Southern on this land can not be justified under that title because the land was not taken to carry on the business of the North Carolina Railroad Company, but for the separate and independent business of he Southern Railway Company. How is the North Carolina Railroad Company interested in an action of trespass against the Southern Railway Company? It is no more interested than any other grantor under whose deed any alleged trespasser undertakes to justify, and such grantor is admittedly not a necessary or proper party to the action for damages for the supposed trespass. If this act of taking possession of the locus in quo was an act (308) done in the conduct of the business of the North Carolina Railroad Company, and which the North Carolina Railroad Company was under the law required to do, then, under the former decision in this case, the plaintiffs' action fails entirely and should be dismissed. *Page 226 The plaintiffs recognize this, and seek to avoid it by expressly alleging in section 11 of the complaint, that the act of taking possession of this locus in quo was not done in the conduct of the public business of the North Carolina Company, but for the purpose of conducting a separate and distinct part of the Southern's business. The former company, according to the complaint, has done nothing. Upon what principle of law then can it be held liable for the acts of the Southern, alleged by the plaintiff to be done outside of and beyond its rights under the lease, it being expressly denied in the complaint that these alleged wrongful acts of the Southern were done in the performance of the public duties which it had undertaken to discharge for the North Carolina Company as its lessee? A cursory reading of the former opinion in this case will disclose, that the very ground upon which a new trial was awarded is that the Southern Railway Company was doing the acts complained of, not in the performance of the public duties of the North Carolina Railroad Company, but in the performance of the duties of the Southern Railway Company because it owns and operates certain other railroads, and that the acts are done in performance of the public duties of those roads, and plaintiffs' predecessors in title not having granted the land which was taken to be used for that purpose, it was placing an additional servitude on the land, and for this additional servitude the Southern Railway Company should be made to pay. If this alleged act in entering upon and taking the locus in quo may be justified under the charter of the North Carolina Company, (309) and was done in furtherance of its business, then it is lawful, and there is no cause of action against either company. R. R. v.Sturgeon, 120 N.C. 225; R. R. v. Olive, 142 N.C. 257. If the appropriation of the property may not be so justified, then only the Southern can be held liable, and in any event the North Carolina Company is not liable upon the facts stated in the complaint. It is plain that the controversy is not only separable, but that, under the pleadings and the former opinion of this Court, there is only one controversy, and that is between the plaintiffs and the Southern Railway Co. That was the ruling of this Court when it held that the judge of the Superior Court should have submitted the issues set out in the former opinion on page 319, for those issues present a controversy with the Southern Railway only. It is suggested that the amended complaint, in which the damages are laid at four thousand dollars, filed in pursuance of our opinion at the last term, does not state a cause of action against the Southern Railway, and therefore the plaintiff would be remitted to his first complaint for $1,500, a sum not within the Federal jurisdiction. *Page 227 This contention does not appear to find much support in the following clause of that opinion: "The plaintiffs are entitled in this action to have permanent damages assessed, in the nature of condemnation, for the additional burden placed upon the lot by its use for purposes other than those for which defendant uses the lot purely as lessee of the North Carolina Railroad Co. (Hodges v.Tel. Co., 133 N.C. 225), in which case this proposition is so clearly and fully reasoned out by Connor, J., with full citation of authorities." But we are prevented from considering this question because, having held that the controversy is separable and that no cause of action is stated against the North Carolina Railroad Company, when the petition and bond for removal were filed by the Southern Railway (310) Company, the jurisdiction of the State court was at once ousted and that court can proceed no further. When a money judgment is demanded, as in this case, the right of removal is determined by the sum demanded, as appears by the record at the time the petition is filed. When an amendment is made the sum last demanded is "the matter in dispute." Moon on Rem., sec. 88. After the petition and bond for removal are filed the jurisdiction of the State court ceases eo instanti. It can make no order except that further proceedings be suspended. The plaintiff can not even take a nonsuit. He must go into the Federal court to do that. If the State court has no jurisdiction to allow a nonsuit, how can it take jurisdiction to pass on the validity of a cause of action? In this case, according to this Court, there are two causes of action attempted to be pleaded. If the controversy is separable, as it is practically admitted to be, it is removable. If then the State jurisdiction ceases when the petition is filed so that a nonsuit could not be taken, whence does the State court acquire jurisdiction to declare the larger cause of action invalid so as to prevent a removal? The Federal statute prescribes that when, and as soon as such petition and bond are filed in an action, "it shall then be the duty of the State court to accept said petition and bond and proceed no further in such suit." 24 U.S. Stat., chap. 373, sec. 1. In construing this statute in a case like this, this Court has said: "The intention so expressed is that the jurisdiction of the State court shall cease at once upon the application sufficiently made for the removal of the action. The latter in its condition in all respects at the time must be removed. It is not intended that the State court shall after that time have control of the action for the purpose of changing its nature or condition, or the form thereof,or the pleadings therein, in any respects whatever. It then ceases (311) to have jurisdiction, and has no authority to make any order, decree or judgment in the action. This is settled by many decisions of *Page 228 the United States, several of them much like this case." Merrimon, C. J., in Winslow v. Collins, speaking for a unanimous court, including our present Chief Justice, 110 N.C. 121. If this case involves a separable controversy, or a single controversy with the Southern Railway Company as is practically admitted and heretofore decided, then this Court has no jurisdiction to pass on the validity of any cause of action set out in the complaint, and could not even allow a nonsuit. Its jurisdiction terminated with the filing of the petition and bond. Kanouse v. Martin, 15 How., 198; R. R. v. Koontz, 104 U.S. 5; R. R.v. Dun, 122 U.S. 513; S. S. Co. v. Tugman, 106 U.S. 118; Kern v.Huidekoper, 103 U.S. 485; Marshall v. Holmes, 141 U.S. 589. No order of the Superior Court, or of this Court, was essential to the removal, or to put an end to the State jurisdiction. It terminated eoinstanti by force of the statute. Stone v. S.C., 117 U.S. 214; Ins. Co.v. Dunn, 19 Wall., 214. The plaintiff could not withdraw the amended complaint if he desired, nor could the court allow him to do so. This is held in Winslow v. Collins,supra, where it is said: "Hence, also, the order allowing the amendment striking out the second cause of action was unauthorized and without force." In that case the second cause of action was stricken out in the Superior Court, so as to bring the sum in controversy below the Federal jurisdiction. Dillon on Removal, pp. 66, 68; Foster's Fed. Prac., 385; Moon on Removal, pp. 71, 72, and notes. Tobacco Co. v. Tobacco Co., 144 N.C. 369, was before us upon the question of removal to the Federal court. This Court refused to consider whether the complaint stated a cause of action, saying: "Whether (312) the plaintiff in its complaint has set forth any actionable wrong is not open for us at this time." The authorities are conclusive, that when at the time the petition and bond are filed, the record as it then stands shows on its face a removable cause, or a separable controversy, which is removable as to one defendant, the State court has no jurisdiction to make any order whatever, except that it will proceed no further. We have considered the suggestion that the defendant, the Southern Railway, has no power of condemnation, and, therefore, permanent damages can not be assessed, so that no cause of action is stated in the amended complaint, and we have shown by controlling authority that after the petition was filed the jurisdiction of the State court was ousted, and that therefore, we are debarred from considering that question. It is again suggested that this is a condemnation proceeding in which the Southern Railway Company is attempting to exercise the power of eminent domain under the laws of this State, and that the *Page 229 United States courts have no jurisdiction over such proceedings. We will not advert to the apparent inconsistency of the two contentions, but only to the fact that we have practically held, in the former opinion in this case, that this is not a condemnation proceeding but a civil action in which the plaintiffs are entitled to damages in the "nature of condemnation." The railway company does not seek to condemn plaintiff's land. That land was conveyed by plaintiffs to the North Carolina Railroad Company by deed, and is within its right of way and necessary for the use of that company. The Southern Railway Company could not condemn it if it had the right of eminent domain, as it is already devoted to and necessary for the exercise of the franchise of the North Carolina road.R. R. v. R. R., 83 N.C. 489. The Southern Railway does not claim any right in, or seek to condemn this land, but contends that it does not need to condemn it, as it has the right to use it as lessee of the North Carolina Company. (313) The plaintiffs only ask for compensation for what they aver is an unwarranted use of the land by the Southern Railway Company constituting, in law, a trespass. In our former opinion the contention of plaintiff is stated by the Chief Justice with his usual clearness, as follows: "The plaintiffs, in their brief, submit that this is all they wish — i.e., compensation for the alien and additional burden, and tersely say `Take and pay.' If this cause of action is defectively stated, when the case goes back, the pleadings can be amended." 146 N.C. 318. The whole record and our former opinion clearly show that this is not a condemnation proceeding commenced before the clerk under the statute, or in the Superior Court in term, in which the railway company is seeking to condemn property under the power of eminent domain, but that it is a civil action commenced in term time, by the plaintiffs, to recover four thousand dollars damages for a trespass. This is not a "question as to whether property shall be appropriated" under the power of eminent domain against the owner's will, but solely a question as to what compensation shall be paid to the original landowner for an alleged unlawful burden placed on the property by the lessee of the North Carolina Railroad Company, to whom the plaintiffs have heretofore conveyed it for railroad purposes. It is not a question of appropriating property against the owner's will, but simply a question of compensation, and where that is the case the Federal courts always have had jurisdiction even in condemnation proceedings. Under the Removal Act of 1875, "the question of compensation for land appropriated, if triable in a State court, might be removed to a United States Circuit Court." Moon on Removal, pp. 136-137. In section 75, quotedin part in the opinion of the Chief Justice, Mr. Moon goes *Page 230 on to say: "On the other hand, if all questions that are (314) nonjudicial have been determined before going into court, and the court proceeding involves only the judicial question of compensation for the rights taken, the cases holding similar proceedings under the act of 1875 to be within the jurisdiction of the United States Circuit Court, are controlling under the present act." P. 139. Broom Co. v.Patterson, 98 U.S. 403. For the reasons given, and upon the authorities cited, we are of opinion that the cause is removable as to the defendant, the Southern Railway Company. The judgment of the Superior Court is Reversed.