Ung Lung Chung v. Holmes

GILBERT, Circuit Judge. This cause was tried before a jury, who found a verdict for $1,549.98 for the plaintiffs, upon which judgment was rendered. The defendant now urges as grounds for a new (rial that the court erred in construing the contract which was sued upon, and that the cause was one which did not involve a controversy concerning an amount sufficient to confer jurisdiction upon the court. The contract sued upon was one whereby the defendant leased to tli« [324] plaintiffs certain bop yards, to be by them cultivated, for wbicb they were to receive compensation out of tbe product wbicb they raised. It was stipulated that the plaintiffs should receive all tbe bops in the event that tbe market price thereof was less than 6 cents per pound; if tbe market price was 6 cents or over and under 8 cents, they were to receive five-sixths of tbe bops; if 8 cents and over and under 14, they were to receive three-fourths of tbe bops; if 14 or over, they were to receive two-thirds of tbe proceeds of tbe bops. Tbe contract contained a reference to another contract, wbicb was entered into at tbe same time, between tbe plaintiffs and tbe defendant on tbe one part and Lilienthal Bros, upon the other, and declared that tbe said last-mentioned contract should be carried out according to its terms. That was a contract whereby Lilienthal Bros, agreed to purchase 37,500 pounds of tbe bops which tbe plaintiffs might raise on said leased premises, and pay for tbe same tbe sum of 10 cents per pound. It was proven on tbe trial that at tbe time when tbe plaintiffs bad raised tbe bops, and bad tbe same cured and ready for delivery under this contract, tbe market value was about 15 cents per pound. The question arose whether tbe plaintiffs were entitled to receive as their share three-fourths of tbe bops upon tbe basis of a market price of 10 cents per pound, or whether they were entitled to only two-thirds of tbe price wbicb they were sold for, under tbe provision in tbe contract that, if tbe market price was 14 cents and over, that should be their proportion of the proceeds. Tbe court ruled that, inasmuch as tbe contract with Lilienthal Bros, was entered into at the same time with the contract between tbe plaintiffs and tbe defendant, it became a part of tbe original agreement, and that thereby tbe price of 10 cents per pound for 37,500 pounds of tbe bops to be raised was fixed and made specific, and that that provision controlled tbe more general provisions of tbe agreement. No error is now perceived in that ruling. Tbe principal question presented is that of tbe jurisdiction of tbe court. Tbe amount sued for in tbe complaint was $2,363.52. Tbe plaintiffs alleged that they were entitled to $2,812, wbicb was three-fourths of tbe price obtained for tbe 37,500 pounds of bops; that of tbe remainder of the bops raised tbe defendant sold 18,791 pounds at 21 cents, realizing therefor $3,946.11, two-thirds of wbicb, amounting to $2,630.74, belonged to the plaintiffs; and that tbe plaintiffs bad been paid only tbe sum of $3,079.72. The defendant, in bis answer denied that tbe current price of tbe 18,791 pounds of bops was any greater sum than 15 cents. On tbe trial tbe defendant testified that be bad sold tbe 18,791 pounds in England at a gross price of 19¾- cents per pound, against wbicb there were charges for freight, insurance, commission, etc., amounting to $660.89. This testimony was elicited by tbe plaintiffs, and was all their evidence upon that point. It was not denied that tbe sale of tbe bops was conducted by the defendant, and that tbe return thereof was made to him, and that no return or any information whatever bad been given to tbe plaintiffs of tbe price received. If there bad been no countercharges to tbe gross sum for wbicb tbe bops were sold in England, tbe plaintiffs would have been entitled to a judgment on tbe evidence for $2,210.85. Tbe defendant contends that tbe plaintiffs, upon their own evidence, [325] proved that the amount in controversy was less than $2,000, that there was no conflicting evidence upon that subject, and that, therefore, under the authority of Barry v. Edmunds, 116 U. S. 550, 6 Sup. Ct. 501, 29 L. Ed. 729, and Wilson v. Daniel, 3 Dall. 401, the court was without jurisdiction to further proceed with the hearing; that in an action ex contractu it is the plaintiffs legal cause of action as shown by the evidence that determines the question of the jurisdiction, or, in other words, that, if the evidence offered on the trial in such an action proves that the plaintiff is entitled to recover less than the jurisdictional amount, the court thereby becomes divested of its jurisdiction. The authorities do not sustain this contention. It is held that the true test is whether or not the plaintiff has in good faith stated a cause of action which is within the jurisdiction of the court. In Black, Dill. Bern. Causes, § 52, it is said: "The amount In controversy is the sum thus claimed by the plaintiff in good faith, without regard to the fact that some of his counts or causes of action may prove to be invalid, or merely formal (provided they ■ are not obviously fictitious or exaggerated), or that ho may not be able, on the trial, to prove so much as he claims, or that the amount actually at issue cannot be ascertained until the evidence is in.” In the present case there is. nothing to indicate the absence of good faith upon the part of the plaintiffs in claiming that the amount due them exceeded $2,000. They had nothing to do with the sale of the heps in England. In drawing their complaint, they seem to have been guided by the market price of hops at the time when the sale was supposed to have been made. The defendant had afforded them no information of the sale. In his answer filed on June 12. 1899, he denied that he had made the sale. The evidence was that the hops had been sold on April 8, 1899, although there was no evidence that the defendanthad received returns of the same until after the date when he made his answer. The plaintiffs could have known nothing of the charges for costs, insurance, and commissions which so largely reduced the net result. The defendant made no ‘effort to show that the plaintiffs knew of these countercharges, and made no attempt to. impugn the bona fides of the plaintiffs in laying their demand as stated in the complaint. In Schunk v. Moline Milburn & Stoddard Co., 347 U. S. 500, 13 Sup. Ct. 416, 37 L. Ed. 255, an action was brought in ihe circuit court on 1wo notes amounting in the aggregate to over $2,000, of which $1,664.04 was not then due. The action was commenced by attachment, which the plaintiff contended was authorized by a local statute for a debt not yet due. The circuit court sustained the plaintiff’s contention, and entertained jurisdiction of the cause. The supreme court affirmed the ruling of the circuit court, and in the course of the opinion used the following argument: "Suppose there were no statute in Nebraska like that referred to, and the plaintiff filed a petition exactly like the one before us, excepting that no attachment vas asked for, and the right to recover anything was challenged by demurrer, would not the matter in dispute be the amount claimed in the petition? Although there might be a perfect defense to the suit for at least 1he amount not yet due, yet the fact of a defense. — and a good defense, too'— would not affect the question as to what was the amount in dispute.” [326] In Shoe Co. v. Roper, 94 Fed. 739, the circuit court of appeals for the Fifth circuit held that, where an action is based on sev-era] accounts, the amount of the accounts in the aggregate is the amount in dispute, and when it exceeds |2,000 the court is not deprived of jurisdiction, if it is shown that one of the accounts in fact was never assigned to the plaintiff, thereby reducing the amount remaining below the jurisdictional limit. The court said: “The fact that some defense may be made, or is, in fact, made, which will make the recovery fall below the jurisdictional amount, does not defeat the jurisdiction of the court.” In Peeler’s Adm’x v. Lathrop, 1 C. C. A. 93, 48 Fed. 780, the same court said that “the matter in controversy, which determines the jurisdiction of the circuit court in suits for the recovery of money only, is the amount demanded by the plaintiff in good faith.” This was said In a case in which the amount claimed by the complainant was $4,900, but in which it had been shown “that the complainant had only been able to prove up about $1,200.” In Pickham v. Manufacturing Co., 23 C. C. A. 391, 77 Fed. 663, the court'disposed of the objection to the jurisdiction in these words: “It is a sufficient answer that the declaration alleged, and the accompanying statement of the account showed, a balance due of $2,(110, and that the recovery was for a less sum only by reason of the counterclaim set up for recoupment, of which, beyond the sum of $400, it does not appear that the complainant had knowledge before bringing- the action.” In Riggs v. Clark, 18 C. C. A. 242, 71 Fed. 560, the jurisdiction was challenged on the ground that by the stipulation of the parties made before the hearing, and for the purposes thereof, it appeared that less than $2,000 was in controversy. The court said: “Nor is the jurisdiction defeated upon its subsequently appearing upon the trial, or by the complainant’s concession, that she was not entitled to so much as was claimed.” In Jones v. Machine Co., 27 C. C. A. 133, 82 Fed. 295, the court said: “Jurisdiction of the case was not lost by reason of the finding that the goods converted were worth loss than the jurisdictional amount, since it does not appear, nor is there shown reason to believe, that the value was overstated in the declaration for the purpose of conferring jurisdiction.” The decisions above quoted are not in conflict with Barry v. Edmunds or Wilson v. Daniel. The language in the latter case that, “where the law gives no rule, the demand of the plaintiff must furnish one, but, where the law gives the rule, the legal cause of action, and not the plaintiff’s demand, must be regarded,” was used in reference to the cause of action as made in the declaration, and not to that which was evidenced on the trial. The motion for a new trial will be dénied.