Bank of Arapahoe v. David Bradley & Co.
| Decision Date | 07 January 1896 |
| Docket Number | 668. |
| Citation | 72 F. 867 |
| Parties | BANK OF ARAPAHOE v. DAVID BRADLEY & CO. |
| Court | U.S. Court of Appeals — Eighth Circuit |
The defendant in error, David Bradley & Company, a corporation of Iowa, brought this action against the plaintiff in error, the Bank of Arapahoe, setting up, as its cause of action: That in February, 1891, James B. Murray was carrying on an agricultural implement business at Arapahoe, Neb. That, for the purpose of ascertaining his business standing and solvency, the plaintiff corporation, which was a manufacturer and dealer in agricultural and farming implements at Council Bluffs, Iowa, addressed to the defendant the following letter:
'David Bradley & Company, Incorporated, Manufacturers and Jobbers of Agricultural Implements, Farm and Spring Wagons, Buggies etc.
'Council Bluffs, Iowa, Feb. 11, 1891.
'Yours truly, David Bradley & Co.'
That the defendant replied to this letter as follows:
That the bank knew that the statements contained in its letter as to Murray's financial condition and standing were false, and that it made them for the fraudulent purpose of inducing the plaintiff to sell goods to Murray on credit, intending, as soon as the goods came into his possession, to have them appropriated to the payment of a debt then due from Murray to the bank. That, relying on the truth of the statements contained in the bank's letter, the plaintiff sold Murray, on credit, a bill of goods, of the value of $1,643.68, which were secured and appropriated by the bank, as soon as they came into the possession of Murray, to pay a debt due from him to the bank; and that Murray was insolvent. The complaint further alleged that the plaintiff had incurred an expense of $475 in an unavailing effort to collect the debt from Murray. The defendant demurred to the complaint, upon the ground that it did not appear therefrom that the amount in controversy exceeded $2,000, exclusive of interest and costs. The court sustained the demurrer, and thereupon the plaintiff filed an amended complaint, in which it is alleged that the action against Murray resulted in a judgment in favor of the plaintiff for $1,678.32 and $11.63 costs, and 'that this plaintiff expended, in money, the sum of $475, over and above the taxable costs in said suit in the district court of Furnas county; that such sum was necessarily expended for transportation, hotel bills, and in payment for the time and labor of persons representing this plaintiff in the preparation for and trial of' the suit against Murray,-- and further claiming that, 'on account of the false and fraudulent representations of the defendant, and the fraudulent acts of the defendant hereinafter recited, the plaintiff claims the sum of $2,500 from the defendant as punitive damages therefor. ' A demurrer to the amended complaint was overruled. There was a trial to a jury, and a verdict and judgment for the plaintiff for the value of the goods, viz. $1,643.68, and interest on that sum, and the defendant sued out this writ of error.
John L. Kennedy (Myron L. Learned was with him on the brief), for plaintiff in error.
Edward P. Smith (James B. Sheean was with him on the brief), for defendant in error.
Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
CALDWELL Circuit Judge, after stating the case as above, .
Numerous errors are assigned to the ruling of the court in admitting and rejecting evidence, and to instructions given and refused, and it is also assigned for error that the amount in controversy was not sufficient to give the circuit court jurisdiction. This last assignment is the only one we find it necessary to consider. It is averred in the complaint that the goods sold by the plaintiff to Murray on the faith of the alleged false representations of the defendant were of the value of $1,643.68. In order to give the circuit court jurisdiction, the goods must have exceeded in value the sum of $2,000, exclusive of interest and costs, and they fall short of that value by more than $350. This deficiency in the amount of the demand sued upon, to give the circuit court jurisdiction, is attempted to be supplied in two ways: The first allegation intended to supply this deficiency is to the effect that the plaintiff, in the prosecution of its suit against Murray, expended for transportation, hotel bills, and in payment for the time and labor of persons representing the plaintiff, the sum of $475. But, in determining whether the complaint states a cause of action for an amount within the jurisdiction of the circuit court, the amount expended by the plaintiff for these purposes cannot be considered as any part of the plaintiff's claim against the defendant, for the reason that the law gives the plaintiff no right of action against the defendant for these things. The plaintiff must be held to a knowledge of so plain a principle of law. Indeed, we do not understand the learned counsel for the defendant in error to contend, in this court, that the defendant is liable for the items going to make up the claim for $475. No case is cited, and it is believed none can be found, tending to support such a claim. No testimony was offered to prove a single item going to make up this alleged claim for $475. It was a matter within the knowledge of the plaintiff, and easily proved if it had any foundation in law or fact. It is reasonable to suppose that, if the claim for this sum had been made in good faith, some evidence would have been offered to support it. No such offer or evidence is in the record, and the bill of exceptions states that it contains 'all the testimony offered or given by either party upon the trial. ' It is perfectly obvious, therefore, that this claim for $475 was set up, not because it had any foundation in fact, or in the hope or expectation that any recovery could be had thereon, but for the sole purpose of making a claim, on the face of the complaint, sufficient in amount to confer jurisdiction on the circuit court. But jurisdiction is not acquired by a groundless and fictitious claim, made for the sole purpose of conferring it. The jurisdiction is determined by the amount demanded by the plaintiff in good faith, and not by the damages claimed, either in the body of the complaint or in the prayer for judgment. In Bowman v. Railway Co., 115 U.S. 611, 613, 6 Sup.Ct. 192, Chief Justice Waite, speaking for the court, said:
'Upon the face of this record, it is apparent that the actual value of the matter in dispute is not sufficient to give us jurisdiction. It is now well settled that our jurisdiction in an action upon a money demand is governed by the value of the actual matter in dispute in this court, as shown by the whole record, and not by the damages claimed, or the prayer for judgment. * * * As was said in Hilton v. Dickinson (2 Sup.Ct. 424), 'It is undoubtedly true that, until it is in some way shown by the record that the sum demanded is not the matter in dispute, that sum will govern in all questions of jurisdiction; but it is equally true that, when it is shown that the sum demanded is not the real matter in dispute, the sum shown, and not the sum demanded, will prevail.''
In Peeler's Adm'x v. Lathrop, 2 U.S.App. 40, 51, 1 C.C.A. 93, 48 F. 780, the court said:
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