Southwestern Gas & Electric Co. v. Raines

HODGES. J. The appellee, a citizen of Miller county, Ark., filed this suit in the district court of Bowie county, Tex., against the appellant, the Southwestern Gas & Electric Company, a corporation organized under the laws of the state of Delaware. The defendant is engaged in the business of operating a street car system extending across the state line separating Texas and Arkansas and into both Bowie and Miller counties. The purpose of this suit is to recover the sum of $10,000 as damages for the personal injuries sustained by the plaintiff’s wife, which it is claimed resulted from the negligence of one of the appellant’s employes in suddenly starting a street car while she was in the act of [546] taking passage thereon. At the proper time the appellant filed a petition accompanied by the required bond, asking that this case be removed from the state court into the federal court, upon the ground of diversity of citizenship of the parties. In that petition the appellant named three federal districts any one of which would be satisfactory to it: The Eastern district of Texas, the one in which the suit was pending; the Western district of Arkansas, where the plaintiff resided; and the district composed of the state of Delaware, the legal residence of the appellant. The prayer of the petition was that the case be removed to the district first named; but, if the court should be of opinion that such district was not the proper one, then that the case be removed to the Western district of Arkansas; and, if the court should determine that the latter was not the proper district, then that the case be transferred to the federal court in the district composed of the state of Delaware. The application for removal was refused, and a trial before a jury resulted in a verdict and judgment in favor of the plaintiff for the sum of $2,500. In addition to assignments which assail the judgment upon various grounds, the appellant attacks the ruling of the court in refusing its application for removal. Logically, that is the first question that should be discussed. In justifying the action of the trial court, counsel for appellee contend that, as this suit was filed in the local court of a state situated in a federal district which was not the legal residence of either of the parties, it was not removable under the terms of the federal laws upon that subject. As supporting that proposition, we are referred to the following cases: Ex parte Wisner, 203 U. S. 449, 27 Sup. Ct. 150, 51 L. Ed. 264; Ry. Co. v. Kiser, 136 S. W. 852; Ry. Co. v. Casselberry, 139 S. W. 1161; Ry. Co. v. Matlock, 141 .S. W. 1069; Adams v. Carter, 204 S. W. 781; Ry. Co. v. Kitchen, 98 Ark. 507, 136 S. W. 970, 50 L. R. A. (N. S.) 828. In the Wisner Case it was held that under the provisions of the United States statute, in its amended form, an action commenced in a state court by a citizen of another state against a nonresident defendant who is a citizen of a state other than that of the plaintiff cannot be removed by .the defendant into the federal court of the district where the suit is pending. In that case, Wisner, a citizen of Michigan, filed a suit in the state court of Missouri against Beardsley, a citizen of the state of Louisiana. Upon the application of Beardsley, the case was removed to the federal court in the district in Missouri where the suit was pending. After the transfer had been made, the plaintiff’s motion to remand was denied by the federal court, and that ruling was reviewed in the Supreme Court of the United States upon an application for a mandamus to compel the circuit judge to remand to the state court.' That holding of the Supreme Court is based upon the ground that inasmuch as that case could not, under the law as amended, have been filed in the federal court of the district in which tha,t suit was pending, that court could not assume jurisdiction upon a removal from the state court. In other words, a case cannot be carried into a federal court, under the privilege of removal, which could not originally have been filed in that court. Chief Justice Fuller, who wrote the opinion, went so far as to hold that the lack of jurisdiction in that instance was fundamental and could not have been waived by the parties to the suit had they consented that the case might be tried in the United States court of the district. However, in an opinion rendered by Justice Brewer in a subsequent case, In re Moore, 209 U. S. 490, 28 Sup. Ct. 585, 706, 52 L. Ed. 904, 14 Ann. Cas. 1164, that ruling was modified, a majority of the court holding that those provisions of the statute which designate the district in which suits may be tried in the federal courts, where jurisdiction depends upon diversity of citizenship, should be construed merely as fixing the venue, and that the parties might by agreement have the case tried outside of the districts mentioned in the statute. We do not regard the Wisner Case, or any of the other cases referred to above, as decisive of the question here presented. Those cases, while furnishing precedents for holding that this case could not, over the objection of the plaintiff or without his consent manifested in some form, have been transferred into the federal court of the ’district where the suit was pending — that is, the Eastern district of .Texas — do not decide that it should not have been transferred to the federal court for the Western district of Arkansas, the place where the plaintiff resided. That question was not involved in any of those cases; and, so far as we have ascertained, it has not been passed upon directly by the Supreme Court of the United States or by our state Supreme Court. The' subordinate federal courts- have disagreed upon the proposition, as will be seen from the cases referred to in Eddy v. Ry. Co. (D. C.) 226 Fed. 120. We therefore feel at liberty to regard the question as still an open one, and shall discuss it accordingly. The appropriate provisions of the federal law on the subject of the removal of causes from state courts into the District Courts of the United States, as amended, are as follows: Section 991 (1) of the U. S. Compiled Statutes of 1913 provides that— “District courts shall have original jurisdiction as follows: * ⅜ ⅜ Where the matter in controversy exceeds, exclusive of interest and costs,' the sum or value of three thousand dollars, and (a) arises under the constitution or-laws of the United States, or treaties made, [547] or which shall be made, under their authority, or (b) is between citizens of different states, or (c) is between citizens of a state and foreign states, citizens, or subjects.” Section-1010, after giving the right of removal in a class of cases dissimilar to -the present, continues: “Any other suit of a civil nature, at law or in equity, of which the District Courts of the United States are given jurisdiction by this title, and which are now pending or which may hereafter be brought, in any state court, may be removed into the District Court of the United States for the proper district by the defendant or defendants therein, being nonresidents of that state. And when in any suit mentioned in this connection there shall be a controversy which is wholly between citizens of different states, and which can be fully determined as between them, then either one or more of the defendants actually interested in such controversy may remove said suit into the District Court of the United States for the proper district.” Section 1011 provides: “Whenever any party entitled to remove any suit mentioned in the last preceding section, except suits removable on the ground of prejudice or local influence, may desire to remove such suit from a state court to the District Court of the United States, he may make and file a petition, duly verified, in such state court at the time, or at any time before the defendant is required by the laws of the state or the rule of the state court in which such suit is brought to answer or plead to the declaration or complaint of the plaintiff, for the removal of such suit into the District Court to be held in the district where such suit is pending, and shall make and file therewith a bond, with good and sufficient surety,” etc. It will be observed that section 991, quoted above, prescribes the general jurisdiction of District Courts based alone upon diversity of citizenship; section 1010 confers the right of removal in the class of cases mentioned; section 1011 prescribes, among other things, the method of procedure. It is clear from the record in this case that this controversy at its inception is one in which the suit might have been brought in the federal court, and' belongs to a class of cases which, if brought in a state court, may be removed into a federal court. It has all the essentials of a removable case. If it had been filed in' the state court in Miller county, Ark., undoubtedly it might have been removed to the federal court of that district upon the application of the defendant, because that district would have been the “proper district,” being the one in which the plaintiff resided. It also would have been the district in which the suit was pending. Every requirement of the statute could have been literally complied with. But the question is: Does the case become non-removable solely because the suit was filed by the plaintiff in a state court located in a district and state other than that in which either of the parties resided? The only reason apparent for so holding is the provision of section 1011 requiring the case, when removable, to be transferred to the District Court of the district in which the suit is pending; and that could not be done without the plaintiff’s consent. If that be a sufficient reason for saying the case is nonremovable, then in an action of this character it is within the power of the plaintiff, by selecting as the forum a state court situated in a district in which neither of the parties resides, to deprive the defendant of his legal right to have the case transferred and tried in a court of the United States. We are of the opinion that in framing the law Congress intended no such consequences; nor do we think a proper, construction of the law on the subject of removal will permit such results. Whether or not a suit between citizens of different states may be removed from a state court into a federal district court must be determined by the amount in controversy, and not by the forum which the plaintiff may arbitrarily select for filing his suit. The privilege of a defendant to have a case removed into a United States court and to have his rights determined by the laws of the United States is a valuable right of which he cannot be deprived without his consent, or by reason of his failure to comply with the statutory requirements essential to the enjoyment of that privilege. -Section 1010, which confers the right of removal, provides that when the petition is granted the case shall go to the “proper district,” without indicating which is the proper district. In the Wisner Case the court held that a district in which neither of the parties resided was not the proper* district, although it was the one in which the suit was pending and one to which section 1011 required the transfer to be made. This ruling in effect subordinated those provisions to section 1033, which prescribed the venue of suits of that character. A case could not be transferred to a district which had no original potential jurisdiction of the controversy. Formerly the federal statute provided that a defendant might be sued in any district in which he was found. As long as that remained the law, the present difficulty did not arise. But section 1033 as amended provides that— “No person shall be arrested in one district for trial in another in any civil action before a District Court; and, except as provided in the six preceding sections, no civil suit shall be brought in any District Court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall he brought only in the district of the residence of either the plaintiff or the defendant.” [548] In defining the “proper district,” Chief Justice Fuller, in the Wisner Case, said: “As it is the nonresident defendant alone who is authorized to remove, the Circuit Court for the proper district is evidently the Circuit Court of '.the district of the residence of the plaintiff.” That portion of the opinion in the Wisner Case has not been disturbed. It has been argued in support of the proposition that there can be no transfer to any district outside of that in which the suit is pending, because there is no provision for any procedure of that kind. If Congress had conferred the unqualified right of removal without prescribing any method of procedure, that omission would be sufficient to render the right of removal unavailable. In such an event, thé courts would adopt the ordinary rules of pleading so far as applicable in aid of the exercise of the right conferred. But the method of procedure — that of filing a petition and bond — is not so intimately connected with the direction for a transfer of the suit into the district in which it is pending as to become ineffective when the latter provision cannot be complied with. ' The method of procedure is as it was when the defendant might be sued in any district in which he was found, and when the complication here presented could not have arisen. It cannot be assumed that, by changing the statute with reference to the district in which the defendant might be sued, Congress intended to place a limitation upon the right of removal. Evidently the old method of procedure was designed to apply to all removable cases. There is nothing necessarily involved in the process of transferring a case of this character from a state court into a federal court outside of the district in which the suit is pending so different from that of transferring it to the federal court in that district as to require a different method of procedure. The same form of petition and character of bond may appropriately be used in either instance; hence there was no practical reason for amendment of that provision of the statute. The fact that the proper district fs one situated in a different state is of no importance whatever. State lines, when coinciding with federal district lines, present no obstacles to a transfer. It will be observed that in some instances state lines have been disregarded in the formation of such districts. Without reference, to its merits, we are of the opinion that this case should have been transferred to the federal court for the Western district of Arkansas; and the judgment is reversed, and the cause remanded, with instructions that an order to that effect be entered in the court below. Footnotes [1] <gz^For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes