Southwestern Telegraph & Telephone Co. v. Walker Grain Co.

• Decision Date: 26 January 1925
• Docket Number: No. 71.,71.
• Court: U.S. District Court — Northern District of Texas
• Parties: SOUTHWESTERN TELEGRAPH & TELEPHONE CO. v. WALKER GRAIN CO. et al.

3 F.2d 819 (1925)

SOUTHWESTERN TELEGRAPH & TELEPHONE CO. v. WALKER GRAIN CO. et al.

No. 71.

District Court, N. D. Texas, at Fort Worth.

January 26, 1925.

Stanley Boykin and H. C. Ray, both of Fort Worth, Tex., for the exceptions.

James A. Templeton, of Fort Worth, Tex., for the motion.

ATWELL, District Judge.

Several years ago this suit was instituted. The fifth amended original petition was filed on the 21st day of November, 1918. The cause was shuttled back and forth from the law to the equity dockets, and finally found lodgment on the equity docket.

The defendant at all times maintained that there was no jurisdiction. A motion raising this question was argued on September 11, 1923, and overruled. On December 8, 1923, the court appointed L. A. Smith, Esq., master, and directed him to "hear evidence and report upon all issues of fact and all issues of law involved in said cause, except the issue of the jurisdiction of the court, which has heretofore been determined by the court." On December 20, 1923, the defendants asked to have the order corrected, so as to read that "the plea to the jurisdiction would be reserved for disposition by the court on evidence." The court evidently refused to change the order, and the master filed his report on June 16, 1924.

On June 13, 1924, and after the report of the master had been submitted to both parties for inspection, the plaintiffs asked leave to amend, and filed a trial amendment, in which two bonds, introduced in evidence by the defendants and attached to their pleadings, and mentioned in the master's report, were declared upon by the plaintiff, and it prayed judgment "jointly and severally against the defendants J. L. Walker and Mrs. M. M. Walker, and against the Walker Grain Company, and against the Julian A. Ivy Grain Company, with 8 per cent. interest as specifically provided in said bonds." The aggregate of the two accounts which the plaintiff claims against the two corporations, which it claims were under the domination and control of the defendant Walker, and entirely subservient to his will, is in excess of the amount necessary to give jurisdiction to this court, but, taken separately, each of said accounts is below such amount.

The master found that the defendant Walker did not organize and use the corporations as dummies for the carrying on of the main business, as alleged in the bill. He reached this conclusion after a painstaking trial, and after the hearing of much testimony. There was a substantial issue upon this question. Accepting the finding of the master upon this question as final, which this court now does by approving such finding, there is no such combination as would, if it appeared at the inception of the cause, give this court jurisdiction.

But after having exercised jurisdiction, and after having exercised power to decide, is the court now bound to dismiss the action? The defendants call the court's attention to Wetmore v. Rymer, 169 U. S. 120, 18 S. Ct. 293, 42 L. Ed. 682; Morris v. Gilmer, 129 U. S. 315, 9 S. Ct. 289, 32 L. Ed. 690; Metcalf v. City of Watertown, 128 U. S. 596, 9 S. Ct. 173, 32 L. Ed. 543; McDaniel v. Traylor, 196 U. S. 415, 25 S. Ct. 369, 49 L. Ed. 533; Id., 212 U. S. 433, 29 S. Ct. 343, 53 L. Ed. 584; In re Winn, 213 U. S. 465, 29 S. Ct. 515, 53 L. Ed. 873; Lambert Co. v. Baltimore & Ohio Railway, 258 U. S. 377, 42 S. Ct. 349, 66 L. Ed. 671; Steigleder v. McQuesten, 198 U. S. 141, 25 S. Ct. 616, 49 L. Ed. 986; Chapman v. Barney, 129 U. S. 677, 9 S. Ct. 426, 32 L. Ed. 800; Great Southern Co. v. Jones, 177 U. S. 450, 20 S. Ct. 690, 44 L. Ed. 842.

These cases, read with section 37 of the Judicial Code (Comp. St. § 1019) and equity rule 39, support the general statement, which every lawyer recognizes, that when it appears to the court that litigation is being conducted before him over which he has no jurisdiction, then, and in that event he should dismiss it; that if, in any suit commenced in one of such courts, "it shall appear to the satisfaction of the * * * court at any time after such suit has been brought or removed thereto, that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of said * * * court, or that the parties to said suit have been improperly or collusively made or joined, either as plaintiffs or defendants, for the purpose of creating a case cognizable or removable under this chapter, the said * * * court shall proceed no further therein, but shall dismiss the suit or remand it to the court from which it was removed." Act March 3, 1875, § 5 (Comp. St. § 1019).

In Steigleder v. McQuesten, 198 U. S. 141, 25 S. Ct. 616, 49 L. Ed. 986, Mr. Justice Harlan stated that "the motion to dismiss the cause, based upon proofs taken by...