Houlton Sav. Bank v. American Laundry Machinery Co.

• Decision Date: 05 September 1934
• Docket Number: No. 53.,53.
• Citation: 7 F. Supp. 858
• Parties: HOULTON SAV. BANK et al. v. AMERICAN LAUNDRY MACHINERY CO.
• Court: U.S. District Court — District of Maine

7 F. Supp. 858

HOULTON SAV. BANK et al. v. AMERICAN LAUNDRY MACHINERY CO.

No. 53.

District Court, D. Maine, N. D.

September 5, 1934.

J. F. Burns, of Houlton, Me., and Merrill & Merrill, of Skowhegan, Me., for plaintiffs.

Bernard Archibald, of Houlton, Me., for defendant.

PETERS, District Judge.

This case was heard on a motion to remand to the Supreme Judicial Court for Aroostook county, from which court it was removed under the removal statute of 1875 as amended (Jud. Code § 28 et seq. 28 USCA § 71 et seq.).

I find the following facts affecting the issue: The defendant above named, an Ohio corporation, located and doing business there, hereinafter referred to as the laundry company, in November, 1930, sold to a Maine corporation located in Houlton, called Aroostook Hotels, Incorporated, and hereinafter referred to as the hotel company, certain laundry machinery, giving a conditional bill of sale of the same with reservation of title to secure certain notes of the hotel company aggregating some $6,500. The contract, containing various other agreements between the parties to it besides the reservation of title, was duly recorded in the town clerk's office at Houlton on November 28, 1930.

The machinery was installed in the basement of a hotel in Houlton owned by the hotel company upon which it gave two real estate mortgages, both dated and recorded subsequent to the record of the conditional bill of sale of the machinery. These mortgages are held by the plaintiff banks.

On October 6, 1933, there being due and unpaid some $3,500 of the notes given by the Hotel Company secured by the title to the machinery, the laundry company, by one of its agents, took a lawyer and a deputy sheriff armed with a replevin writ describing the same machinery and made out against the hotel company, went to the hotel where the machinery was located, and started to take it out. They had unfastened a few nuts and bolts when they were requested to desist by an attorney for these banks who stated in substance that the banks claimed the machinery under their mortgages as permanent fixtures, and would shortly take proceedings to enforce their rights. No further effort was made to remove the machinery. The replevin writ was not served or entered in court.

On October 16 this bill in equity was brought in the Supreme Judicial Court by the two banks mentioned against the laundry company claiming title to the machinery mentioned as permanent fixtures that could not be removed without irreparable and permanent injury to the hotel building and asking for an injunction, temporary and permanent, against removal.

The bill was returnable November 7th, within thirty days from which date demurrer, plea, or answer was required to be filed under rules of that court. A restraining order was issued when notice was ordered. On November 1st a temporary injunction was issued restraining the laundry company, "until the hearing on the cause or further order of Court," from entering on the premises and from removing the machinery.

On December 2d petition for removal to this court was filed by the laundry company.

On December 23d a hearing was had in the state court on the petition for removal. According to the decree dated the 26th "testimony and evidence was received," and it was ordered that the petition for removal be dismissed; the court stating in its decree: "Because of the issuance of process of replevin for the identical articles concerned in this case the defendant here, plaintiff in the Superior Court writ, is held to have waived its right to have the question of title to and right to possession of the property sought to be replevined determined by the United States Court. Further, it is held that there is no evidence in this case or in the record thereof that the matter in controversy exceeds, exclusive of interest and costs, the sum or value of three thousand dollars."

Notwithstanding the action of the state court, the laundry company procured the required certified copy of the record and filed it in this court. Afterwards the defendant laundry company filed an answer here. Later the plaintiff banks filed their motion to remand, alleging in substance that the defendant had waived its right to remove the case by reason of its activities above recited in connection with the replevin writ and of its entering the hotel property and starting to take out the laundry machinery.

The right to remove the action was also denied on the ground that the value of the property in question was less than $3,000.

From the evidence presented to me at the hearing I find that the amount in controversy is more than $3,000, exclusive of interest and costs. I also find the other jurisdictional facts to be as stated in the petition for removal.

It seems to me that the following conclusions of law are required:

1. The suit was properly entered here, and this court solely has the duty of deciding all issues of fact raised upon the petition for removal. The only matter left to the state court to decide, when a petition for removal is filed, is whether, admitting the facts stated in the petition to be true, it appears on the face of the record that the petitioner is entitled to a removal. For that reason it was not necessary for the defendant to produce any evidence in the state court to support its allegation that the matter in controversy exceeded $3,000.

The Supreme Court in the case of Burlington, etc., R. Co. v. Dunn, 122 U. S. 513, 7 S. Ct. 1262, 1263, 30 L. Ed. 1159, discussed and settled the above propositions. It there said: "All issues of fact made upon the petition for removal must be tried in the circuit court (now district), but the state court is at liberty to determine for itself whether, on the face of the record, a removal has been effected. * * * It presents then to the state court a pure question of law; and that is whether, admitting the facts stated in the petition for removal to be true, it appears on the face of the record * * * that the petitioner is entitled to a removal of the suit. * * * But, even though the state court should refuse to stop proceedings, the petitioning party may enter a copy of the record of that court, as it stood on the filing of his petition, in the circuit court, and have the suit docketed there."

This petition for removal contained every averment required by law. It is not contended otherwise. The petition was seasonably filed and was accompanied by a good and sufficient bond, conditioned according to the statute. It was so found by the judge of the state court to whom it was presented. According to the terms of the act of Congress, it was then his duty "to accept said petition and bond and proceed no further in such suit." Jud. Code § 29 (28 USCA § 72). In a similar situation, the Supreme Court in the case of Kern v. Huidekoper, 103 U. S. 485, at page 490, 26 L. Ed. 354, said:

"Notwithstanding the refusal of the State court to make an order for the removal of the cause, the defendants in error, within the time prescribed by the statute, filed a transcript of the record of the State court in the Circuit Court of the United States. This invested the latter court with full and complete jurisdiction of the case, for, in the language of the section just referred to, `the said copy being entered as aforesaid in said Circuit Court of the United States, the cause should then proceed in the same manner as if it had been originally commenced in said Circuit Court.'

"If the cause is removable and the statute for its removal has been complied with, no order of the State court for its removal is necessary to confer jurisdiction on the court of the United States, and no refusal of such an order can prevent that jurisdiction from attaching." Kern v. Huidekoper, supra. Home Life Insurance Co. v. Dunn, 19 Wall. 214, 22 L. Ed. 68.

2. The suggestion in plaintiff's brief that defendant waived its right to removal by entering a general appearance in the state court and participating in the hearing on the application for a temporary injunction is without merit.

It does not appear when, if at all, the defendant entered a general appearance, but it appears that the defendant through counsel, in answer to an order of court made on October 20th, appeared on November 1 and opposed the issuance of a temporary injunction. The time for filing a petition for removal had not elapsed. The bill was not returnable until November 7th, and...