Tierney v. Helvetia Swiss Fire Ins.

CHATFIELD, District Judge. The plaintiff herein is the assignee of some 14 judgment creditors, each one of whom was the plaintiff in a separate action against the defendant (a corporation of Switzerland, and therefore an alien) in the Circuit Court of the United States for the Northern District of California; judgments in all of the actions having been entered upon the 24th day of August, 1907, and since that date assigned to the plaintiff. The present action was begun in the Supreme Court of Kings county, in the state of New York, and an order for removal to the Circuit Court of the United States for the Fastern District of New York was made, upon the petition of the defendant (appearing specially for that purpose), on the ground that the action was between a citizen of the United Stales and an alien, and that the plaintiff resided in the Eastern District of New York. Prior to the removal, and at the institution of the suit, an attachment had been obtained upon certain funds deposited by the defendant in the Central Trust Company of New York, and after the entry of the order of removal a judgment on default was obtained in the state court by the plaintiff, claiming that no jurisdiction existed in the United States Circuit Court, and that therefore the removal proceedings could be treated as of no effect, and as if they had not taken place. This judgment on default has since been vacated, and an appeal from the order vacating the default is pending in the state courts. To further complicate the situation, the defendant, upon ascertaining' that his petition for removal should have contained a specific allegation that the causes of action assigned to the plaintiff could originally have been [84] brought in the United States court, moved in the state court to vacate the order of removal, in order to allow an amendment of his petition, and this motion, as it seems, was properly denied; jurisdiction over the parties, at least, having already passed to this court. The record on removal having, accordingly, been filed in' this court, on the 6th day of November, 1907, and the defendant having interposed an answer in this court, upon the 11th day of November, 1907, a motion to remand for lack of jurisdiction was made by the plaintiff, and a motion for leave to amend its petition for removal was made by the defendant. These motions are now before the court. The defendant claims that the United States Circuit Court for the Northern District of California had jurisdiction of each of the 14 causes of action on which judgment was obtained by the plaintiffs, and that the citizenship of those plaintiffs is apparent from the record, inasmuch as each suit was alleged to have been duly brought in said Circuit Court. The defendant in each case being an alien, and the claim being advanced that suits between aliens are not within the jurisdiction of the United States courts, it is argued that necessarily each plaintiff must have been a citizen of some state of the Union. The papers on removal, as now on file in this court, contain a record also of the application for an amendment to those removal papers made in the state court, and the affidavits upon which an amendment was obtained by the plaintiff contain copies of the original judgments in the Circuit Court of California, as well as the assignments of 'those judgments to the plaintiff. The citizenship of the plaintiffs in those actions does not appear in any of the papers, with the exception of that of the Guttá Percha & Rubber Manufacturing Company of New York, a corporation (but there is nothing to show in which district of the state of New York this corporation has its residence), and Mrs. Margaret H. Fuller, to whose assignment is attached a power of attorney reciting that Mrs. Fuller is of the city and county of San Francisco, state of California. These allegations might be sufficient to bring the application for amendment within the doctrine of Kinney v. Columbia Savings, etc., Ass’n, 191 U. S. 78, 24 Sup. Ct. 30, 48 L. Ed. 103, provided jurisdiction of the plaintiff’s cause of action could depend upon a showing of jurisdiction in the United States Circuit Court as to some of the plaintiff’s assignors; the' balance of the assignors being disregarded. Or, if the plaintiff’s causes of action are separable, amendment might be allowed as to the two causes of action referred to above, if originally these two causes of action could have been maintained in the United States Circuit Court for this district. But without voluntary appearance, at least, it seems that no one of the plaintiffs could have maintained an action against the defendant in the United States Circuit Court of this district, and, as was said in Utah-Nevada Co. v. De Lamar, 133 Fed. 113, 66 C. C. A. 179, the Circuit Court of the United States cannot retain jurisdiction of an action brought by the assignee of a chose in action, even though the plaintiff is a citizen of another state than the-defendant, unless the assignor of the plaintiff could have maintained his suit in the same jurisdiction. To the same effect is Mexican National Railroad Co. v. Davidson, 157 U. S. 201, 15 Sup. [85] Ct. 563, 39 L. Ed. 672, and Cochran and Fidelity & Deposit Co. v. Montgomery County, 199 U. S. 260, 26 Sup. Ct. 58, 50 L. Ed. 182. This doctrine has been well established, and, as was clearly set forth in the case of Minnesota v. Northern Securities Co., 194 U. S. 48, at page 66, 24 Sup. Ct. 598, at page 602, 48 L. Ed. 870, it is the manifest duty of the Circuit Court to dismiss or remand a suit, if at any time, even after the suit has been removed, it shall appear to the satisfaction of said Circuit Court “that such suit docs not really and substantially involve a dispute or controversy properly within the jurisdiction of said Circuit Court.” In the case of Galveston, etc., Railway v. Gonzales, 151 U. S. 496, 14 Sup. Ct. 401, 38 L. Ed. 248, as well as in Re Hohorst, 150 U. S. 653, 14 Sup. Ct. 221, 37 L. Ed. 1211, the provisions of Act March 3, 1887, c. 373, § 1, 24 Stat. 552 (U. S. Comp. St. 1901, p. 514), as amended by Act Aug. 13, 1888 c. 866, 25 Stat. 433 (U. S. Comp. St. 1901, p. 508), giving the Circuit Court of the United States jurisdiction of suits of a civil nature, involving a matter of over $2,000, in which there shall be a controversy between citizens of a state and foreign states, citizens or subjects were held not to be affected by the subsequent provisions of the same section, which direct that no civil suit shall be brought before either of said courts, against any person, by any original process or proceeding, m any other district than that whereof lie is an inhabitant, excepting where the jurisdiction is founded only on the fact that the action was between citizens of different states, in which event suit may be brought in the district of the residence of either the plaintiff or the defendant. A suit by a citizen against an alien may therefore, under the authority of these cases, be brought in any district in which valid service can be made upon the defendant. In re Louisville Underwriters, 131 U. S. 488, 10 Sup. Ct. 587, 33 L. Ed. 991. Each of the 14 assignors therefore might have brought suit in a district where the defendant could have been validly served, if that assignor was a citizen of the United States; but such suit could not have been brought in the Pjastern district of New York, as no one of the parties plaintiff is shown by the record to have resided in this district, nor is there anything in the record to show that the alien defendant ever was or could have been legally served in this district. The defendant, after the question of the sufficiency of the removal record had been raised by the plaintiff, filed his answer in this court, and the filing of this answer is equivalent to a general appearance; but upon the original application for removal the defendant appeared specially, and it does not seem that the defendant should be allowed to voluntarily improve his position and confer jurisdiction by his own act, subsequent to notice by the plaintiff that an application to remand the case is to be made. This point was passed upon recently by this court in the case of Donovan v. Dixieland Amusement Co. (C. C.) 152 Fed. 661, following the decision in Johnson v. Computing Scale Co. (C. C.) 139 Fed. 339, and the cases therein cited. See, also, Carson v. Dunham, 121 U. S. 421, 427, 7 Sup. Ct. 1030, 30 L. Ed. 992. If the defendant had appeared generally at the time of the original application for removal, he might be allowed to follow this up by the [86] filing of an answer, and his answer might have been the source of information as to jurisdictional facts; but, having appeared specially for the purpose of the removal only, it cannot be said that it had waived its rights to attack the service made upon it, or that it had given the United States Circuit Court in this district admitted jurisdiction over the cause of action, until after that jurisdiction had been attacked by the plaintiff. Further, it seems that if an assignee cannot maintain an action in a United States Circuit Court in which his assignor could not have maintained the same action, under the provisions of Act March 3, 1887, c. 373, § 1, 24 Stat. 552 (U. S. Comp, St. 1901, p. 514), as amended by Act Aug 13, 1888, c. 866, 25 Stat 433 (U. S. Comp. St. 1901, p. 508), the assignee, who is the plaintiff in the present action, can have no standing in the United States Circuit Court for this district, in the absence of any showing by the record that even one of his assignors could maintain jurisdiction against the defendant therein. Further,-if the assignors had all been joined as parties plaintiff in this action, it not appearing that they were residents of the same state, but, on the contrary, it now appearing that one at least was a resident of a different state from the others, jurisdiction would not lie in the United States court. The provisions of the act above quoted, in the portion giving jurisdiction to the Circuit Court of the United States of controversies between citizens of a state and foreign states, could not be held to cover jurisdiction of an action between citizens of different states and a citizen of a foreign state. The language of the portion of the section just referred to should be construed in the same way as the language of the portions immediately preceding, and in the case of Smith v. Lyon, 133 U. S. 315, 10 Sup, Ct. 303, 33 L. Ed. 635, it was_ held that an action could not be maintained in the United States Circuit Court in which two plaintiffs were joined, one residing in the state of Missouri, and one in the state of Texas. Also, in the case of Galveston, etc., Railway v. Gonzales, 151 U. S. 496, 14 Sup. Ct. 401, 38 L. Ed. 248, a suit by a citizen of one state against a citizen of the same state and an alien, was placed in the same category; that is, outside of the jurisdiction of the United States court. It is well settled that in the case of doubt as to jurisdiction an action removed to the United States court should be remanded (Crane Co. v. Guanica Centrale (C. C.) 132 Fed. 713), and while the confusion and contradictory positions existing in the state court make it apparent that further litigation may follow an order remanding this action, and while it appears that the jurisdiction of the United States Circuit Court for the Northern District of California may be called in question, and may have to be passed upon herein, nevertheless, it is the opinion of this court that the case should be remanded to the Supreme Court of the state of New York, in the county of Kings, which plainly has jurisdiction, and that any federal questions involved in the issues as finally presented must be reserved for an appeal to the Supreme Court of the United States from the decision of the highest court of the state of New York. [87] This determination makes it unnecessary to consider whether suits between aliens can be maintained in the United States courts,_ or whether the statement that a suit was “duly” pending in the United States Circuit court for the Northern District of California is an allegation with reference to the citizenship of the plaintiff in that action. It need only be said that an inference of this character should not be relied upon for the purpose of retaining jurisdiction of the case. The motion to remand will be granted, and the motion to amend will be denied.