Davis v. Mills

• Decision Date: 22 January 1900
• Docket Number: 457.
• Citation: 99 F. 39
• Court: U.S. District Court — District of Connecticut
• Parties: DAVIS v. MILLS et al.

99 F. 39

DAVIS v. MILLS et al.

No. 457.

United States Circuit Court, D. Connecticut.

January 22, 1900

John A Shelton, for plaintiff.

Gross Hyde & Shipman, for defendants.

TOWNSEND District Judge.

Demurrer to plea to jurisdiction in action at law. The complaint alleges that while defendants herein were trustees of the Obelisk Mining & Concentrating Company, a corporation organized under the laws of Montana, it became indebted to the assignors of sundry claims now held by plaintiff, and failed to file the report of its condition as required by law, and claims that, it being insolvent, defendants are jointly and severally liable for the amount of said claims.

The statute of Montana provides as follows:

'Every such company shall, annually, within twenty days from the first day of September, make report, which shall be published in some newspaper published in the town, city or village, or if there be no such newspaper published in said town, city or village, then in some newspaper published nearest the place where the business of the said company is carried on, which shall state the amount of capital stock and of the proportion actually paid in and the amount of existing debts, which report shall be signed by the president and a majority of the trustees, and shall be verified by the oath of the president or secretary of said company, and filed in the office of the clerk of the county where the business of the company shall be carried on, and if any of said company shall fail to do so all the trustees shall be jointly and severally liable for all the debts of said company then existing, and for all that shall be contracted before said report shall be made. No liability shall attach to any trustee, or board of trustees, by virtue of the provisions of this section for a failure to cause to be published in a newspaper the report in this section mentioned, if within the time herein mentioned, the said trustee, or board of trustees, or company shall annually cause said report to be filed in the office of the clerk and recorder of the county in which the business of said company is carried on, as declared in its certificate of incorporation. ' Comp. Laws, p. 728, Sec. 460.

The defendants have pleaded to the jurisdiction on the following grounds, namely:

'(1) Because the action was brought by the plaintiff as assignee of three separate and distinct causes of action, neither one of which amounts, without interest and costs, to the sum of two thousand dollars, and neither one of which could have been brought within the jurisdiction of this court by the assignor. (2) Because the sum or amount, viz. two thousand dollars, required to give jurisdiction of this action to this court is made up by illegally joining three several counts for less amounts, each of which sets up a separate and distinct cause of action, not arising out the same transaction, and in no way related to each other, and not proper to be joined in the same action. (3) Because the complaint is an attempt to enforce in this court a penal statute of the state of Montana, which can only be enforced in the courts of that state, and of which this court will not entertain jurisdiction. (4) Because the rights, such as they are, of the several assignors, mentioned in said complaint, to the benefit of the Montana statute, are not assignable, and do not follow the alleged assignments to the plaintiff of the said rights of action against said Obelisk Mining & Concentrating Company.'

Counsel for defendants, in support of the first point, cited section 629, Rev.St. 1878, as amended by the act of August 13, 1888 (25 Stat. 433, c. 866), which provides that the circuit court shall not 'have cognizance of any suit * * * to recover the contents of any promissory note or other chose in action in favor of any assignee, * * * unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made. ' It has been repeatedly held that the restrictions as to amounts and as to suits by assignees are distinct and independent in language and purpose; that the intent of all the legislation since the enactment of the judiciary act of 1789 has been, by the provision as to amounts, merely to prevent the dockets of the federal courts from being crowded with small cases, and, by the provision as to assigned choses in action, to prevent the creation of jurisdiction by the transfer of claims held by a citizen of the same state with the debtor to a citizen of another state. Stanley v. Board (C.C.) 15 F. 483; Hammond v. Cleaveland (C.C.) 23 F. 1; Bernheim v. Birnbaum (C.C.) 30 F. 885; Chase v. Roller-Mills Co. (C.C.) 56 F. 625.

In Bowden v. Burnham, 8 C.C.A. 248, 59 F. 752, Judge Caldwell, delivering the opinion of the court of appeals, said:

'When the plaintiffs had acquired, in good faith, from citizens of states other than the state of which the defendants were citizens, claims amounting in the aggregate to $2,000, they had a right to sue the defendants on all of such claims in one action in the circuit court, although no one of the claims amount to $2,000. The requisite amount and the citizenship necessary to confer the jurisdiction are united in the plaintiffs, and the jurisdiction is not affected by the fact that the several assignors of the claims could not have maintained separate suits thereon because the claim of each was less than $2,000 in amount.'

The complaint alleges that the assigned claims originally belonged to citizen of the state of Montana, and they together aggregate more than $2,000.

The second point, namely, misjoinder, was disposed of by Judge Shipman on a prior hearing, on motion for leave to amend the complaint by the addition of a third count. 83 F. 982. Judge Shipman was of the opinion that 'these statutory claims arose out of the same transaction,-- that is the same neglect,-- and that, being owned by one person, they can be proved in one complaint.'

The third point raises the question whether said statute is penal, so as not to be enforceable outside the state of Montana. It is unnecessary now to consider what the law may formerly have been in the federal courts or what may now be the law in the state courts. In Huntington v Attrill, 146 U.S. 676, 12 Sup.Ct. 231, 36 L.Ed. 1131, the supreme court of the United States says that as such a statute 'gives a civil remedy at the suit of the creditor only, and measured by the amount of his debt, it is, as to him, clearly remedial. To maintain such a suit is not to administer a punishment imposed upon an offender against the state, but simply to enforce a private right secured under its laws to an individual. We can see no just ground, on principle, for holding such a statute to be a penal law, in the sense that it cannot be enforced in a foreign state or country. ' See, also, Whitman v. Bank, 28 C.C.A. 404, 83 F. 288. Counsel for defendants contends that the supreme court of Connecticut decided in Mitchell v. Hotchkiss, 48 Conn. 1, that such a cause of action was penal, and that this court is concluded by said decision. But that case only holds that the cause of action does not survive against the administrator, and that decision is not necessarily inconsistent with the opinion of the court in...