German-American Mercantile Bank v. Gas Service Corp. of America

..NETERER, District Judge. This- is an action to recover $25,000, with interest, evidenced by promissory note executed on June 8, 1915, -by the Gas Service Corporation of-America, due September 6, 1915; guaranty of the payment thereof being made by the Illinois Surety Company by written guaranty executed on the 8th day of June, 1915. It is alleged, in substance, that the plaintiff is a corporation of the state of Washington; that the defendant Gas Service Corporation of America is a corporation organized under the laws of Washington, and that the Illinois Surety Company is a corporation duly organized and existing under the laws of the state of Illinois, with its main office in Chicago, in the state of Illinois, having complied with the laws of the state of Washington, authorizing it to do a general surety business within the state of Washington, maintaining an office in the city of Seattle, and doing a general surety business within said state; that the defendant Gas Company made application to plaintiff for a loan of $25,000; that plaintiff agreed to make the loan provided sufficient and ample security was given; that the Surety Company agreed to become surety for said loan and to guarantee the payment thereof at maturity; that the loan was negotiated for. the sum of $25,000; that the Gas Company executed its promissory note on the date named, and at the same time the Surety Company undertook and agreed to promptly pay any note or notes, not exceeding $25,000, executed by the Gas Service Corporation of America to the plaintiff during a period of six months from June 8, 1915, together with interest, attorney’s fees, etc., in the event suit was prosecuted to collect the same. The action was removed upon petition to this- court, and motion to remand is now made. It is contended by the Surety Company that the controversy is “wholly separable,” and removal was properly made. [1-3] Under the Washington law (section 192, Remington & Bal-linger’s Codes of Washington) the maker and indorser or guarantor may be sued separately or jointly. It is also proper to unite in the same action causes arising out of the same transaction. Harding v. Ostrander Timber Co., 64 Wash. 224, 116 Pac. 635. And by the same logic parties involved in the same transaction, as maker of a note and guaranty under a separate instrument may be jointly sued. Bank of California v. Union Packing Co., 60 Wash. 456, 111 Pac. 573. There is in the complaint but a single cause of action. There is but a single controversy, and that is tire alleged indebtedness due the plaintiff. Each of the defendants may have a separate defense, but that does not create separable controversies within the meaning of the Removal Act. Louisville & Nashville Ry. Co. v. Ide, 114 U. S. 52, 5 Sup. Ct. 735, 29 L. Ed. 63; Putnam v. Ingraham, 114 U. S. 57, 5 Sup. Ct. 746, 29 L. Ed. 65; Pirie et al. v. Tvedt, 115 U. S. 41, 5 Sup. Ct. 1034, 1161, 29 L. Ed. 331; Starin v. N. Y., 115 U. S. 248, 6 Sup. Ct. 28, 29 L. Ed. 388. The main purpose of the action is to recover the money loaned to the defendant Gas Service Company upon the faith and credit of the' Surety Company, it “being interested in the project for which the money to be loaned as aforesaid is to be used,” and “admits that all money advanced to said parties upon their promissory note is advanced upon the strength of this contract of [829] guaranty, and * * * further acknowledges that it is interested in the making of saici loan, and will receive a valuable consideration for the execution of this agreement.” The controversy, the contract of loan, is indivisible. The fact that the evidence of the relation of the parties to this contract of loan is on separate sheets of paper, instead of one paper, does not change the relation or the rights of the parties to the controversy; and because of the fact that the plaintiff might have sued the parties separately, but elects to sue them jointly, the defendant is not given the right to say that the action shall be several. Torrence v. Shedd, 144 U. S. 527, 12 Sup. Ct. 726, 36 L. Ed. 528; Starin v. N. Y., supra. A separate defense may defeat a joint recovery; but that it cannot deprive a plaintiff of his right to prosecute his suit to final decision in his own way has been many times repeated by the United Stales Supreme Court. Chesapeake & Ohio Ry. Co. v. Dixon, 179 U. S. 131, 21 Sup. Ct. 67, 45 L. Ed. 121. The plaintiff having elected to bring a joint action, no charge of fraudulent joinder being made, and no “controversy which is wholly separable.” (section 28, Judicial Code), appearing on the face of the complaint (Alabama Great Southern Ry. Co. v. Thompson, 200 U. S. 206, 26 Sup. Ct. 161, 50 L. Ed. 441, 4 Ann. Cas. 1147), the cause was improperly removed, and the motion to remand is therefore granted.