Doran v. Elgin Cooperative Credit Ass'n

• Decision Date: 29 December 1950
• Docket Number: Civ. No. 218.
• Parties: DORAN v. ELGIN COOPERATIVE CREDIT ASS'N et al.
• Court: U.S. District Court — District of Nebraska

95 F. Supp. 455

DORAN v. ELGIN COOPERATIVE CREDIT ASS'N et al.

Civ. No. 218.

United States District Court D. Nebraska, Norfolk Division.

December 29, 1950.

T. W. Lanigan, of Grand Island, Neb. and Harold Rice, of Neligh, Neb., for plaintiff.

Russell W. Bartels, of South Sioux City, Neb., for defendant Elgin Cooperative Credit Ass'n.

W. G. Whitford, of Neligh, Neb., for defendant Ross Martin.

G. L. De Lacy (Kennedy, Holland, De Lacy & Svoboda), of Omaha, Neb., for defendant American Employers Ins. Co.

DELEHANT, District Judge.

The defendant, Elgin Cooperative Credit Association, moves to remand this case to the District Court of Antelope County, Nebraska, from which its removal to this court was effected by the defendant American Employers Insurance Company. They will be designated briefly as the Association and the Company respectively.

The plaintiff, a citizen of Nebraska, filed this action in the state court against all of the defendants asking for an accounting in respect of his several transactions with the Association, a determination of the amount due him as established by such accounting, and a judgment against the defendants "jointly and severally" for such amount, and for relief in sundry other respects. More than $3,000.00, exclusive of interest and costs, is unquestionably involved. The Association is a Nebraska corporation, organized under Chapter 21, Article 13, subdivision (b), R.S.Neb.1943, and engaged in the banking business (with the limitations provided by the law of Nebraska, Section 21-1308 et seq., R.S.Neb. 1943, in respect of such institutions) at Elgin, Nebraska. Martin is a citizen of Nebraska and allegedly the Association's former managing officer. The Company is a Massachusetts corporation authorized to do business as an insurer in Nebraska.

Briefly stated, the plaintiff's complaint or petition charges that the Association, and Martin as its manager, in the handling of sundry banking accounts in the Association belonging to the plaintiff, including the making of promissory notes and in the accounting for the proceeds of sales at a sale pavilion, also belonging to the plaintiff, misapplied and converted moneys belonging to him in a large sum, for the determination of the precise amount of which an accounting will be required; that, as a result thereof, those two defendants are substantially indebted to him; that the Company has issued a bond in the penal sum of $35,000.00, conditioned on the faithful accounting by Martin and the other officers of the Association of monies entrusted to it whereunder, and to the extent of its designated limit, it has assumed a liability to depositors for and to the extent of their losses in consequence of the infidelity of any such officer or officers.

Without unnecessary discussion or citation of authorities it may be observed at the outset that the community of citizenship between the plaintiff, Martin and the Association would defeat the jurisdiction of this court over the case if it had originally been filed here, and also its removal, at the instance of all of the defendants. All parties recognize that premise. But the Company alone has caused the removal upon the claim that Title 28 U.S.C.A. § 1441(c) supports it. That contention is denied in the presentation of the Association's motion to remand and without formal motion was likewise denied by counsel for the plaintiff on oral argument. Its validity is the court's sole present inquiry.

Section 1441(c) is presently in the following language: "Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction." (Emphasis added.)

In that form the section has been in force since September 1, 1948. Immediately and for approximately thirty-five years theretofore, the subject was somewhat differently covered by a portion of what was formerly Title 28 U.S.C.A. § 71, whose relevant language was: "And when in any suit mentioned in this section 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 defendants actually interested in such controversy may remove said suit into the district court of the United States for the proper district."

That the revision of the phraseology was purposeful, and was designed to achieve clarification, and a measure of restriction in the removal jurisdiction of the United States district courts may be gathered from the pertinent reviser's notes. See Title 28 United States Code, Congressional Service, pp. 1854-1855. Its detailed quotation and discussion are regarded as unnecessary.

Whatever the former practice may have allowed, it is now essential to removal by less than all defendants on the ground defined in Section 1441(c), that in the pleading prompting the effort to remove there be joined with one or more non-removable claims or causes of action "a separate and independent claim or cause of action, which would be removable if sued upon alone". The claim or cause of action must be not only separate from, but also independent of, the non-removable claim or cause of action. The terms "separate" and "independent" are used conjunctively, a circumstance which the courts are not at liberty to neglect. Vide infra.

The presently applicable section of the statute has not received judicial construction, of which the present writer is, or counsel seem to be, aware which is directly instructive upon this submission.

Of the cases reported from district courts which have applied it, several have involved the familiar circumstance of the joint or concurrent negligence of two or more parties uniting in the causation of a single injury, which has long been regarded as inadequate under the former practice to disclose a separable controversy supporting removal. Thomas v. Thompson, D. C.Ark., 80 F.Supp. 225; English v. Atlantic Coast Line R. Co., D.C.S.C., 80 F.Supp. 681; Smith v. Waldemar, D.C.Tenn., 85 F. Supp. 36; Billups v. American Surety Co., D.C.Kan., 87 F.Supp. 894; Harward v. General Motors Corp., D.C.N.C., 89 F. Supp. 170; and Rodewald v. Phillips Petroleum Co., D.C.Iowa, 91 F.Supp. 700. Upon that point see also Bentley v. Halliburton Oil Well Cementing Co., 5 Cir., 174 F.2d 788, reversing 81 F.Supp. 323. Others either do not disclose fully the basis of their determination or rest upon procedural questions. McFadden v. Grace Line, D.C. N.Y., 82 F.Supp. 494. President, etc. v. Monogram Associates, D.C.N.Y., 81 F. Supp. 739. Still others deal with active and deliberate torts jointly committed by two or more parties, e.g. Robinson v. Missouri Pacific Transportation Co., D.C.Ark., 85 F. Supp. 235; and Duffy v. Duffy, D.C.Iowa, 89 F.Supp. 745, or with...