American Surety Co. v. Ritchie

• Decision Date: 25 October 1945
• Docket Number: No. 2651.,2651.
• Parties: AMERICAN SURETY CO. OF NEW YORK v. RITCHIE.
• Court: Texas Court of Appeals

191 S.W.2d 137

AMERICAN SURETY CO. OF NEW YORK v. RITCHIE.

No. 2651.

Court of Civil Appeals of Texas. Waco.

October 25, 1945.

Rehearing Denied December 27, 1945.

Appeal from District Court, McLennan County; R. B. Stanford, Judge.

Suit under the Workmen's Compensation Act by Henry R. Ritchie to set aside an award of the Industrial Accident Board in favor of the American Surety Company of New York. From a judgment granting relief, the defendant appeals.

Reversed and remanded with instructions.

Naman, Howell & Boswell, of Waco, and Malone, Lipscomb, White & Seay, of Dallas, for appellant.

O'Dowd & O'Dowd, of Waco, for appellee.

HALE, Justice.

This suit is based upon the Texas Workmen's Compensation Act. Vernon's Ann. Civ.St. art. 8306 et seq. The compensation insurer, a New York corporation, has appealed from a judgment in favor of the injured employee, a resident citizen of Texas. Under the first and second points in its brief appellant says the trial court erred in refusing its petition for the removal of the cause into the Federal Court.

Appellee instituted the suit in one of the District Courts of McLennan County on May 26, 1943. He alleged in his original petition that on November 3, 1942, he sustained an accidental injury while acting in the course of his employment which resulted immediately in his total incapacity to labor and that such total incapacity would continue for a period of 149 weeks; that his average weekly wage was $35 per week and therefore he "is entitled to receive compensation at the rate of $20.00 per week for each and every week of his said total disability which plaintiff alleges will continue for a period of 149 weeks;" that he was also entitled to interest on all weekly installments matured but not paid at the date of trial; that he could not "at the present time determine the full nature and extent of his injuries to his body and that on the trial of the cause he will rely upon whatever injuries and damages that competent medical testimony will show that he suffered to his back and spine, leg, kidneys, circulatory system, nervous system and his body generally." In addition to the foregoing unconditional averments of fact, he made further alternative allegations with respect to various matters, including partial incapacity in the event the court should find upon the trial that he would not be totally incapacitated for a period of 149 weeks. He prayed for judgment awarding him compensation benefits at the rate of $20 per week for 149 weeks and "in the event the court is of the opinion that plaintiff is not entitled to total disability for a period of 149 weeks, that he be awarded compensation for partial disability following the period of total incapacity;" that he be allowed "six percent per annum on each and all weekly installments not paid at maturity" and that he recover such other and further relief, special and general, in law and equity, to which he may be entitled.

The case was tried on appellee's original petition and resulted in judgment in his favor on October 18, 1943. From such judgment the insurer perfected its appeal to this court by filing its supersedeas bond on December 13, 1943. Thereafter this court rendered its judgment reversing the judgment of the trial court and remanding the cause. See American Surety Co. of N. Y. v. Ritchie, Tex.Civ.App., 182 S.W.2d 501. In due time appellee filed motion for rehearing and application to the Supreme Court for a writ of error to review the judgment of this court. Upon consideration of such application the same was refused by the Supreme Court for want of merit on November 22, 1944. At appellee's request the mandate from this court was issued on December 21, 1944, and thereafter it was returned into the trial court.

On February 2, 1945, appellant filed in the trial court its notice, petition and bond for the removal of the suit into the District Court of the United States for the Western District of Texas. The petition for removal was properly verified and recited the substance of the facts hereinbefore set forth. It was therein alleged that the matter in dispute then exceeded the sum of $3,000, exclusive of interest and costs, although said amount did not exceed said sum at the time said suit was originally filed or at the time when the cause was first tried; that interest on past due installments under the Texas Workmen's Compensation Act is not recoverable eo nomine and may only be recovered when specifically sued for as a part of the damages and hence such accrued interest constitutes a part of the matter in controversy for removal purposes; and that "this petitioner now files its petition for removal at the earliest practicable date same can be presented since said cause became removable."

Although duly notified of the removal proceedings, appellee did not file any reply thereto. On February 7, 1943, the trial court overruled and refused the petition for removal and appellant duly excepted. It was recited in the overruling order that the petition for removal, together with the bond, were presented to the court, that the petition was in due form and the bond for removal, with acceptable surety, was also in due form and conditioned as the law requires.

The cause proceeded to trial a second time on February 19, 1945, on appellee's original petition. Thereupon appellee introduced evidence which tended to show that he was totally and permanently incapacitated to labor as a result of the injuries complained of. Immediately after such evidence had been adduced appellant again tendered and renewed its notice, petition and bond for removal theretofore filed and verbally moved the court to sustain such petition upon the grounds therein stated and upon the additional grounds that under the testimony adduced appellee would be entitled to recover, if anything, a sum in excess of $3,000, exclusive of interest and costs, and under the terms of the Texas Workmen's Compensation Act appellee could not waive the benefits to which he was entitled under the Act in order to defeat jurisdiction of the Federal Court. The motion was overruled and appellant duly excepted.

The two rulings of the trial court in the particulars here complained of were made the basis of appellant's first and second assignments of error, respectively, in its motion for new trial.

Opinion

Under the provisions of Sec. 41, Title 28 U.S.C.A., the district courts of the United States are vested with original jurisdiction of all suits of a civil nature, as therein specified, where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000. Provision is also made in Sec. 71 et seq. of Title 28 U.S.C.A., for the removal of such suits from the state courts into the federal courts by notice, petition and bond for removal, when the suit is between citizens of different states and the amount in controversy comes within the original jurisdiction of the United States district courts.

In passing upon a petition for removal grounded on diverse citizenship and the amount in controversy, the courts ordinarily should look alone to the averments of fact and the prayer for relief contained in the plaintiff's petition in order to determine the sum or value of the matter in controversy for jurisdictional purposes. Great Northern R. Co. v. Alexander, 246 U.S. 276, 38 S.Ct. 237, 62 L.Ed. 713; Boyle v. Chicago R. I. & P. R. Co., 8 Cir., 42 F.2d 633; Dallas Bank & Trust Co. v. Holloway, D.C.Tex.1931, 50 F.2d 197. When the conditions prescribed in the pertinent Acts of Congress have been complied with and federal jurisdiction is thereby shown, a defendant is entitled as a matter of right to have the suit removed into the proper Federal Court. Home Ins. Co. v. Morse, 20 Wall. 445, 22 L.Ed. 365. This right may not be denied or impaired by any State or its Courts. Terral v. Burke Const. Co., 257 U.S. 529, 42 S.Ct. 188, 66 L.Ed. 352, 21 A.L.R. 186.

We think it is clear from the unconditional averments of fact and the prayer for relief contained in appellee's original petition that the matter thereby put in controversy did not exceed the sum or value of $3,000 at the time when such petition was filed or at the time when appellant was required to answer the same and hence did not come within the jurisdiction of the United States district courts. But, as stated in Cyclopedia of Federal Procedure, 2d Ed., Vol. 2, § 416, p. 334: "When removability of an action does not exist or does not appear from the complaint, but the cause of action or amount demanded or parties are later changed by voluntary action of the plaintiff, although after the original time for defendant to plead, and therefore after the time ordinarily fixed for removal, the defendant becomes entitled to apply for removal when such change occurs." See also: Powers v. Chesapeake & Ohio R. Co., 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673; Kincheloe v. Hopkins, D.C., 4 F.Supp. 196; Niccum v. Northern Assur. Co., D.C., 17 F.2d 160; Sink v. Mutual Life Ins. Co. of N. Y., D.C., 56 F.Supp. 306. Since the cause was not removable when appellant was originally required to plead, the question then arises as to whether the sum or value of the matter in controversy, exclusive of interest and costs, thereafter exceeded $3,000, and if so when the cause thereby became removable.

The Texas courts have held that interest on past due installments in a workmen's compensation case is not interest eo nomine, but must be affirmatively alleged and sought as a part of the damages and benefits claimed in order to be recoverable. Standard Accident Ins. Co. v. Stanaland, Tex.Civ.App., 285 S.W. 878, pt. 4 and authorities, er. ref.; Bankers Lloyds v. Pollard, Tex.Civ.App., 40 S.W.2d 859, pt. 7, er. ref.; Associated Indemnity Corp. v. Baker, Tex.Civ.App., 76 S.W.2d 153, pt. 14, er. dis.; Traders & General Ins. Co. v. Childers, Tex.Civ.App., 95 S.W.2d 461, er. dis.

It is also established by the Texas decisions that...