Bucy v. Nevada Const. Co., 9796.

• Decision Date: 16 February 1942
• Docket Number: No. 9796.,9796.
• Citation: 125 F.2d 213
• Parties: BUCY v. NEVADA CONST. CO.
• Court: U.S. Court of Appeals — Ninth Circuit

125 F.2d 213 (1942)

BUCY v. NEVADA CONST. CO.

No. 9796.

Circuit Court of Appeals, Ninth Circuit.

January 26, 1942.

Rehearing Denied February 16, 1942.

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Lewis & Stotesbury and J. M. Stotesbury, all of Bozeman, Mont., and Herbert O. Skalet, of St. Anthony, Idaho, for appellant.

F. M. Bistline, of Pocatello, Idaho, and Lynn M. Ewing, of Nevada, Mo., for appellee.

Before GARRECHT, HANEY, and HEALY, Circuit Judges.

GARRECHT, Circuit Judge.

An action originally was commenced in the state court of Idaho by the appellant, a citizen of the state of Montana, against the appellee, a corporation organized and existing under the laws of the state of Missouri, with a duly designated statutory agent and a principal place of business located at Ashton, Fremont County, Idaho. On motion of the defendant-appellee the cause, on September 9, 1939, was removed to the court below on the representation of diversity of citizenship. The District Court thereafter granted a motion, made by plaintiff, to remand the case to the state court. Four days later, the District Court vacated the order of remand theretofore entered, and ordered the motion to remand denied. As appellant's argument is concerned solely with these two orders entered by the District Court, we set them forth as they appear in the transcript:

"The motion of plaintiff, to remand, in the above cause having been filed and considered by the Court, It is Ordered that the said Motion to remand is hereby granted.

"Dated November 27, 1939. "Charles C. Cavanah "United States District Judge."

And the second order:

"It appearing to the Court that since entering the order on November 27, 1939, in the above cause remanding the cause to the State Court for lack of jurisdiction, the Supreme Court of the United States on November 22, 1939, in a majority opinion construed the Federal Statute differently and has held that the Federal Courts have jurisdiction although the Corporations are not organized in this State, and have complied with the laws of the State in the transacting of business in the State, and therefore, it is Ordered that the order heretofore made in the above cause on November 27, 1939 is vacated and set aside and the motion to remand is denied.

"Dated December 1, 1939. "Charles C. Cavanah "District Judge."

No objection seems to have been made, or exception taken, to either of these orders.

On January 10, 1940, more than a month after the court had entered its order vacating the remand order, appellant, as plaintiff, appeared and filed what is denominated an amended complaint. Thereafter, on January 11, 1940, appellee, as defendant, answered and also interposed a counterclaim which raised a new issue, to which plaintiff filed a reply on March 4, 1940. Thereafter, all parties voluntarily appeared and proceeded to trial before the court without a jury on October 15, 1940. The cause was submitted for decision, and on December 23, 1940, judgment was rendered for the defendant on its counterclaim.

The plaintiff pursues this appeal, contending that the order of the District Court granting plaintiff's motion to remand divested the court below of jurisdiction and that all proceedings thereafter were ineffectual to bind him, the state court having been automatically reinvested with jurisdiction.¹ The appellant's case rests solely upon this technicality, no other question being raised.

It is apparent in the light of Neirbo Co. v. Bethlehem Corp., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437, that the District Court did have jurisdiction when it erroneously entered its order to remand, which it almost immediately revoked as soon as it realized its error.

We have before us, therefore, a case in which the District Court, as determined by the Supreme Court, actually had jurisdiction of the parties and the subject matter but in which, through mistake, inadvertence, or error of law, the District Court made an order which, in effect, denied jurisdiction. Appellant now insists that this erroneous order completely and effectively divested the court below of power to take any action with reference thereto — in other words, that the court was helpless to correct its own error in any manner or under any circumstances.

In Ausbrooks v. Western Union Telegraph Co., D.C.Tenn., 282 F. 733, 734, the District Court entered a remand order providing that this cause "be, and is, remanded to the Circuit Court of Davidson County." Application was made to the same court to set aside its own order of remand. In refusing to do so the court said that its language, above quoted from the order of remand, "having ex propria vigore reinvested the State court with jurisdiction, necessarily terminated the jurisdiction of this court." This decision has been followed in other cases, and undoubtedly is correct so far as its rule may be applied to similar facts. But it is evident that the facts and circumstances before the court in that case are different from those here.

It is to be noted that in the Ausbrooks case the District Court entertained an application for rehearing, which might indicate that even in that case during the time in which a new trial might be asked for, the court still assumed it had jurisdiction. In re Sherman, 124 U.S. 364-369, 8 S.Ct. 505, 31 L.Ed. 423. There is a rule in the District Court of the United States for the District of Idaho which grants to all or any of the parties, for certain reasons stated, a new trial or rehearing if application therefor is made not later than ten days after the entry of the judgment. One of these reasons is "error in law occurring at the trial." This rule would indicate that it would be proper for the court of its own initiative to take action in the matter. In the instant case of its own motion, and as far as appears in the record, before anything had been done towards carrying into execution the remanding order, the court reviewed and set aside its own manifestly erroneous order.

This rule of the United States District Court for Idaho states that the procedure shall be as prescribed in the General Rules of Civil Procedure for the District Courts of the United States. Rule 60 of these General Rules, 28 U.S.C.A. following section 723c, the Advisory Committee's notes thereon, and particularly the discussion appearing on page 185 of the Proceedings of the Institute at Washington, D. C., October 6, 7, 8, 1938, as published by the American Bar Association, support the theory of the inherent power of courts to correct their own errors.

As pointed out in the discussion of the Institute, this Rule 60 does not affect, interfere with, or curtail the common-law power of the federal courts, but as was emphasized, the broad power, which was theirs by the common law, to deal with situations where, in justice and good conscience, relief should be granted from manifest error, remained inherent in the courts.

"The power to vacate judgments was conceded by the common law to all its courts. Within its proper limitations it is a power inherent in all courts of record and independent of statute. It may be exercised by the court either of its own motion or on motion or suggestion by a party or interested person. * * *" 1 Freeman on Judgments § 194, pp. 375, 376.

Appellant insists that this inherent power of the court has been abrogated by the terms of the statute (28 U.S.C.A. § 71), and it has been so held in Leslie v. Floyd Gas Co., D.C., 11 F.Supp. 401, 402. There the court held that the order of remand ipso facto terminated the jurisdiction of the District Court. The opinion in that case went even further and held that the state court was reinvested with jurisdiction whether or not a copy of the remanding order was filed in the state court and where no subsequent proceedings had been taken. We cannot follow this reasoning. Not only does it run counter to the doctrine of the common law whereby courts of record have inherent power to correct their own errors, but it abrogates all statutes enacted for that purpose and misconstrues the very statute here under discussion.

These cases cited by appellant from the federal District Courts, which assert that an order of remand ipso facto or ex proprio vigore terminates the jurisdiction of the federal court, place too narrow and restricted a meaning upon the word "immediately" and give no meaning to other words used in the Act. In these decisions the importance of the word "immediately" is exaggerated and the words "carried into execution" are utterly disregarded. The last quoted words clearly indicate that something further was to be done after the order was entered to carry it into effect, but even without these words such similar significance should be given to the word "immediately" alone. In decisions touching the point "immediately" has been repeatedly held to mean "as soon as practicable" or "within a reasonable time".

"The construction, as given generally by the courts to the words `immediately' and `forthwith,' when they occur in contracts or in statutes, is, that the act referred to should be performed within such convenient time as is reasonably requisite. * * *" Martin v. Pifer, 96 Ind. 245, 248.

"* * * `immediately' means `as soon as practicable,' and conversely it is proper to construe `as soon as practicable' to mean `immediately.' * * *" Chicago, B. & Q. R. R. v. Richardson County, 72 Neb. 482, 100 N.W. 950, 952.

"* * * `immediately' * * * does not mean instantaneously but requires action to be taken within a reasonable time. * * *" Lucas v. Western Union Telegraph Co., 131 Iowa 669, 109 N.W. 191, 193, 6 L.R.A.,N.S., 1016.

If the above construction of the word "immediately" be substituted in its place, the statute would read: "such remand shall be as soon as practicable carried into execution" or "such remand shall be within a reasonable time carried into execution".

Such a construction would give harmonious reading to all the words of the statute.

The...