Boyd v. Gill

• Decision Date: 14 December 1883
• Citation: 19 F. 145
• Parties: BOYD v. GILL and others. CUTTER v. WHITTIER and others. NOTT v. CLEWS and others. PERKINS v. DENNIS and others.
• Court: U.S. District Court — Southern District of New York

19 F. 145

BOYD v. GILL and others.

CUTTER v. WHITTIER and others.

NOTT v. CLEWS and others.

PERKINS v. DENNIS and others.

United States Circuit Court, S.D. New York.

December 14, 1883

H. F Averill and Geo. F. Betts, for plaintiff in each case.

Sewell Pierce & Sheldon, for defendant Plumb.

Sherman & Sterling, for defendant Whittier.

Abbot Bros., for defendant Clews.

Arnoux Ritch & Woodford, for defendant Dewing.

Before WALLACE and BROWN, J.J.

WALLACE J.

These cases and the case of Langdon v. Fogg, ^[1] decided by Judge Brown, but in which he ordered a reargument, have been heard together, the questions being substantially identical, upon motions to remand the suits to the state court. In each case the action was brought in the state court by a resident plaintiff against a non-resident defendant and several resident defendants, and was removed to this court upon the petition of the non-resident defendant.

The right to a removal is challenged upon the ground that there is not a controversy in the suit which is wholly between the plaintiff and the non-resident defendant, and which can be fully determined between them, within the meaning of the second section of the removal act of March 3, 1875.

There are some immaterial differences in the allegations of the bills of complaint in the several cases, but the bill in each may be fairly treated as one brought by a stockholder in a mining corporation to enforce a cause of action which exists in favor of the corporation against the directors for a fraudulent appropriation of its assets, but which the corporation does not assert because it is controlled by the unfaithful directors, and the directors and corporation are consequently joined as defendants. The relief sought is that the individual defendants account jointly and severally concerning the profits they have made by the misappropriation of the corporate property, and be adjudged to pay the amount found due to the corporation into court for the benefit of the stockholders. This being the cause of action disclosed by the bill, it will be treated as one upon which a separate action could be maintained as between the plaintiff and the non-resident defendant. The rule may now be deemed established that where a cestui que trust seeks in equity to charge trustees with personal liability for their fraudulent acts, he may join all who have participated, or proceed against one or more of them severally at his election. The right of action in such a case arises ex delicto, and in equity as well as at law the tort may be treated as several as well as joint. Heath v. Erie Ry. Co. 8 Blatchf. 347; May v. Selby, 1 Younge & C.Ch. 235; Franco v. Franco, 3 Ves. 75; Wilkinson v. Parry, 4 Russ. 272; Atty. Gen. v. Wilson, 4 Lond.Jur. 1174. A proceeding against trustees for a fraudulent breach of trust is an exception to the rule that in a suit against trustees all of them must be made parties. Cunningham v. Pell, 5 Paige, 607. The reason is obvious. A trustee may insist that his co-trustees be joined, when he is sued for a breach of duty in which the other trustees are involved, because he is entitled to contribution. In cases of breach of trust not involving actual fraud, contribution may be enforced by trustees, as between themselves,-- Hill, Trust. 814 and notes, (4th Amer. Ed.;)-- but no right of contribution exists where the demand sought to be enforced is ex delicto. Ellis v. Peck, 1 Johns.Ch. 131; Miller v. Fenton, 11 Paige, 18. The cause of action disclosed by the bill is therefore one capable of being determined as between the plaintiff and the non-resident defendant without the presence of the other defendants. The plaintiff, at his election, can dismiss his bill as against all the other defendants at any stage of the action and proceed against the non-resident defendant alone, and obtain against him the complete relief to which he would be entitled if the other defendants were joined.

The question, then is whether the act of 1875 gives the right of removal whenever there is a cause of action in the suit between a resident party on the one side and a non-resident party on the other, upon which a several recovery may be had against the latter, or whether the right exists only when there is a separate and distinct controversy to which all the substantial parties on one side are residents, and all those upon the other are non-residents. The language of the act declares that when in 'any suit * * * between citizens of different states * * * there shall be a controversy which is wholly between citizens of different states, and which can be fully determined as between them, then either one or more of the plaintiffs or defendants * * * may remove,' etc. Two diverse views of the meaning of this language are indicated by the adjudications of the federal courts. In Peterson v. Chapman, 13 Blatchf. 395, the action was one of trover, in which the plaintiff was a citizen of New York, and the defendants were one a citizen of New York, and one a citizen of Connecticut. It was held that, although the cause of action was such that the suit could be maintained by the plaintiff against either defendant alone, it was not a removable suit, because all the parties of the controversy were not residents upon the one side and non-residents upon the other; and that the plaintiff having elected to proceed against all jointly, the case disclosed but a single controversy, and that was one which could be fully determined only between all the parties to the suit. This decision was approved and followed by other judges in this circuit in Sawyer v. Switzerland Ins. Co. 14 Blatchf. 451, and Van Brunt v. Corbin, Id. 496. The latter case was an action of ejectment, and one, therefore, in which the plaintiff at his election might have proceeded against the defendants severally instead of jointly. The more recent case of Tuedt v. Carson, 13 F. 353, in the eighth circuit, is to the same effect. That was an action brought by the plaintiff against several defendants for a tort. Some of the defendants were residents of the same state with the plaintiff, and others were residents of a different state. It was held not to be such a separable controversy that the non-resident defendants could remove the case, although the plaintiff could at his election have proceeded against them alone. On the other hand, Clark v. Chicago, etc., Ry. Co. 11 F. 355; Kerling v. Cotzhausen, 16 FED.Rep. 705; People ex rel. v. Illinois Cent. R. Co. Id. 881, are authorities for the broad proposition that whenever the suit is founded on a cause of action upon which, at the election of the plaintiff, the defendants might have been sued severally, a non-resident can remove the suit, although the other defendants with whom he is sued jointly are residents of the same state as the plaintiff.

It is urged that, since the decisions in this circuit referred to the supreme court has considered the construction of the second clause of the second section of the act of March 3, 1875, and in the light of its decision in Barney v. Latham, 103 U.S. 205, the former judgments of this court should be reconsidered, and it should not be decided that whenever in a suit between a resident plaintiff and several defendants, one only of whom is a non-resident, there is a cause of action which might be fully determined as between the plaintiff and the non-resident defendant, if the other defendants were not parties, the suit is removable. Barney v. Latham does not seem to sanction any such contention. Some misapprehension of that decision may have arisen by overlooking the distinction between a separable cause of action and a separate or separable controversy. The cases in the seventh and eighth circuits seem to interpret that decision as holding that whenever a separate action could have been maintained by ...