City of Knoxville v. Southern Paving Const. Co.

• Citation: 220 F. 236
• Decision Date: 14 July 1914
• Docket Number: 8.
• Parties: CITY OF KNOXVILLE v. SOUTHERN PAVING CONST. CO. et al.
• Court: U.S. District Court — Eastern District of Tennessee

220 F. 236

CITY OF KNOXVILLE v. SOUTHERN PAVING CONST. CO. et al.

No. 8.

United States District Court, E.D. Tennessee.

July 14, 1914

W. T Kennerly, City Atty., of Knoxville, Tenn., and Maynard & Lee of Knoxville, Tenn., for plaintiff.

Coleman & Frierson, of Chattanooga, Tenn., for defendants.

SANFORD District Judge.

Clearly if this suit, which was removed from a Chancery Court of the State, does not involve a dispute or controversy properly within the jurisdiction of this court, it must either be remanded to the State court or dismissed, 'as justice may require,' pursuant to section 37 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1098), superseding section 5 of the Act of March 8, 1875, c. 137, 18 Stat. 472 (Comp. St. 1913, Sec. 1019).

Being a suit to recover damages for breach of contract, it is concededly, a purely common law action, jurisdiction of which was conferred upon the Chancery Courts of the State, concurrently with the common law courts, by the Tennessee Acts of 1877, c. 97, p. 119.

Clearly this court has no jurisdiction of such a controversy upon its equity side. Cates v. Allen, 149 U.S. 451, 13 Sup.Ct. 977, 37 L.Ed. 804; Mississippi Mills v. Cohn, 150 U.S. 202, 204, 14 Sup.Ct. 75, 37 L.Ed. 1052. It is equally clear, however, that it has jurisdiction of such a controversy upon its common law side, the requisite diversity of citizenship existing and the necessary jurisdictional amount being involved.

Under these circumstances the plaintiff relies upon the statement in Simkins' Fed. Eq. Suit (2d Ed.) 885, 886, that 'it seems that when a case is pending in a State equity, which if removed would, by the nature of the case, go on the law side, the court should remand and not require the pleadings to be recast. ' The cases of Cates v. Allen (U.S.) supra, and Gombert v. Lyon (C.C.) 80 F. 305, which are cited in support of this suggestion, do not, however, in my opinion, sustain the view suggested in the text, since in neither of them was the nature of the case such that it could have been transferred to the law side of the court, and the only alternative presented to the Federal Court was that of either remanding the suit or dismissing it entirely.

The true rule deducible from Cates v. Allen (U.S.) supra, and other Federal cases by which it has been followed, is, I think, this: That if the relief sought in the suit is grantable in the State court under a statute enlarging its equitable jurisdiction but is nevertheless beyond the equitable jurisdiction of the Federal Court, the case should, after removal, be remanded to the State court, instead of being dismissed. Cates v. Allen (U.S.) supra; Gombert v. Lyon (C.C.) supra; Mathews Co. v. Mathews (C.C.) 148 F. 490; Peters v. Equitable Society (C.C.) 149 F. 290. By reason of the equitable nature of the relief sought such controversy would likewise be entirely beyond the common law jurisdiction of the Federal Court, and the result of removing the same to the Federal Court would otherwise be that if not remanded it must be dismissed and the plaintiff thereby entirely deprived of the relief grantable in the State court; and hence, as the Federal Court is unable to grant such relief upon either its equity or law side, justice clearly requires that the suit, instead of being dismissed, should be remanded to the State court.

Obviously however, this rule does not apply where the suit is purely a common law action and the Federal Court has complete jurisdiction to give the full relief sought upon its law side. In such case, instead of either dismissing the suit or remanding to the State court, it should clearly be transferred to the law side of the court. Peters v. Equitable Society (C.C.) supra, at page 294. To hold otherwise would permit resident plaintiffs in States such as Tennessee, in which the Chancery Courts have been given concurrent jurisdiction of all civil causes of action triable by the common law courts, except those for injuries to person, property or character involving unliquidated damages, to practically defeat the right of non-resident defendants to remove such suits to the Federal Court by suing such non-resident defendants in...