First State Bank v. Chicago, RI & PR Co.

• Decision Date: 16 February 1933
• Docket Number: No. 9599.,9599.
• Citation: 90 ALR 544,63 F.2d 585
• Parties: FIRST STATE BANK v. CHICAGO, R. I. & P. R. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

90 ALR 544, 63 F.2d 585 (1933)

FIRST STATE BANK v. CHICAGO, R. I. & P. R. CO.

No. 9599.

Circuit Court of Appeals, Eighth Circuit.

February 16, 1933.

Ingram & Moher, of Stuttgart, Ark., for appellant.

Thomas S. Buzbee, of Little Rock, Ark., for appellee.

Before KENYON, GARDNER, and SANBORN, Circuit Judges.

KENYON, Circuit Judge.

Appellee, herein termed plaintiff, filed a bill in equity in the United States District Court for the Eastern District of Arkansas against Bankers' Trust Company, Union Trust Company, and First State Bank (corporations of Arkansas) as defendants (so designated here), asking that they be restrained from subjecting the plaintiff to a multiplicity of suits and to vexatious litigation by the bringing of separate suits to recover from plaintiff on each of forty-eight alleged forged bills of lading. A motion to dismiss was made by defendants on the grounds that the court had no jurisdiction to hear the cause, that the bill showed on its face a lack of equity, and that plaintiff had a plain, adequate, and complete remedy at law. The court overruled the motion and entered judgment for plaintiff granting the prayer for an injunction. Defendants, Bankers' Trust Company and Union Trust Company do not appeal. The First State Bank is the only appellant; proper severance having been made. As the case was determined upon the bill and motion to dismiss, the facts properly pleaded in the bill must be taken as established. Merinos Viesca y Compania v. Pan American P. & T. Co. (D. C. N. Y.) 49 F.(2d) 352; Central Shoe Co. v. Central Shoe Co., Inc. (D. C. Mass.) 58 F.(2d) 680; Lucas v. Federal Reserve Bank of Richmond (C. C. A. 4) 59 F.(2d) 617.

The bill alleges that plaintiff operates a line of railroad through fourteen states, including the state of Arkansas; that defendants are corporations, two of them having places of business in Little Rock, and one in Stuttgart, Ark.; that a partnership engaged in business at Stuttgart under the firm name and style of McGill Bros. Rice Mill forged, or caused to be forged, some forty-eight bills of lading purporting to have been issued by plaintiff at Stuttgart and covering supposed shipments of rice by said McGill Bros. Rice Mill; that the Bankers' Trust Company is the owner of twenty-eight of said bills purporting to cover shipments of the value of $79,316, and has made demand upon plaintiff for the payment of said amount; that defendant Union Trust Company is the owner of six of said bills purporting to cover shipments of the value of $14,690, and has likewise made demand upon plaintiff for the payment of said amount; that defendant First State Bank is the owner of fourteen of said bills purporting to cover shipments of the value of $31,400, and it also has made demand upon plaintiff for payment of said amount; that said bills of lading were made to resemble genuine bills of lading, and were made apparently negotiable in form in the manner provided by the acts of Congress; that each of said bills purports to represent a separate and definite liability against plaintiff for the value of rice pretended to be covered thereby and to represent a separate and distinct cause of action against plaintiff, and on which separate suits can be brought in any county in the state of Arkansas or in any of the fourteen states through which plaintiff operates a line of railroad; that the demands of each of the defendants could have been made the basis of one suit in the Eastern District of Arkansas, but that said Bankers' Trust Company, a defendant, has brought two separate suits against plaintiff, based on two of said forged bills of lading, in the circuit court of Calhoun county, Ark., some one hundred miles from Stuttgart where the alleged bills of lading were forged, and where plaintiff cannot compel the attendance of witnesses who live at Stuttgart and have knowledge of the facts relating to the forgery, on account of the distance, as under the laws of Arkansas a witness cannot be compelled to attend a trial except in the county of his residence or in an adjoining county; that in one of these suits defendant Bankers' Trust Company, seeks to recover $2,640 for the value of rice alleged to have been covered by a bill of lading, and in the other $2,670 for the value of rice likewise covered by another bill. The bill sets forth that it is necessary to the proper conduct of plaintiff's business as a carrier in interstate commerce that the potential liability of the carriers on these forged bills of lading be held for naught, and that to require litigating the question in separate suits based on each of said forged bill of lading and in separate jurisdictions will constitute an undue and unreasonable burden on interstate commerce. It is alleged therein that, unless defendants are restrained, they or their assigns will subject plaintiff to a multiplicity of suits and to burdensome and vexatious litigation by bringing separate suits on each alleged cause of action in courts far removed from Stuttgart, where it is claimed said causes of action accrued and in courts which have no jurisdiction to compel the attendance of witnesses necessary to plaintiff's defense, and that plaintiff has no adequate remedy at law. The prayer for relief is this: "Wherefore, inasmuch as plaintiff has no adequate remedy at law, and, in order to avoid a multiplicity of suits, plaintiff prays that the defendants and each of them be enjoined from negotiating or assigning any of said bills of lading, from prosecuting suits based upon said bills of lading elsewhere than in this Court; that they be required to submit said alleged bills of lading to this Court, and that the same be cancelled and held for naught; that, pending a final hearing hereof, a temporary injunction be granted as herein prayed."

The first question raised is that, as none of the alleged bills of lading held by appellant exceed the sum of $3,000, the jurisdiction of the federal court must fail. Some of the purported bills of lading held by defendant Bankers' Trust Company do exceed $3,000, but that is of no avail. The amount in controversy between plaintiff and the appealing defendant must exceed $3,000 in order to give jurisdiction, and the requirement as to jurisdiction is the same for cases in equity as for cases at law. Delaware Consol. Oil Co. v. Randall et al. (D. C. Okl.) 34 F.(2d) 666; Adam Schumann Associates, Inc., v. City of New York (C. C. A. 2) 40 F.(2d) 216. It is conceded by plaintiff in its complaint that each of the bills of lading represents "a separate and distinct liability" against plaintiff, and "a separate and distinct cause of action." Collectively the fourteen bills aggregate $31,400. Separately no one equals the jurisdictional amount.

The general rule is that jurisdiction is not conferred upon the federal court by joining claims against distinct and separate defendants, no one of which equals the jurisdictional amount. Walter v. Northeastern Railroad Co., 147 U. S. 370, 13 S. Ct. 348, 37 L. Ed. 206; Northern Pacific R. R. Co. v. Walker, 148 U. S. 391, 13 S. Ct. 650, 37 L. Ed. 494; Citizens' Bank of Louisiana v. Cannon, 164 U. S. 319, 17 S. Ct. 89, 41 L. Ed. 451. Nor can several plaintiffs joining in a suit against one or more defendants aggregate for jurisdictional purposes separate and distinct claims, no one of which is equal to the jurisdictional amount, although, when several plaintiffs "unite to enforce a single title or right, in which they have a common and undivided interest, it is enough if their interests collectively equal the jurisdictional amount." Troy Bank v. Whitehead & Co., 222 U. S. 39, 40-41, 32 S. Ct. 9, 56 L. Ed. 81; Wheless v. St. Louis et al., 180 U. S. 379, 21 S. Ct. 402, 45 L. Ed. 583; Rogers v. Hennepin County, Minn., 239 U. S. 621, 36 S. Ct. 217, 60 L. Ed. 469; Scott et al. v. Frazier et al., 253 U. S. 243, 40 S. Ct. 503, 64 L. Ed. 883.

In Woodmen of the World v. O'Neill, 266 U. S. 292, 45 S. Ct. 49, 69 L. Ed. 293, an exception to the general rule is noted, where the bill alleged that the various defendants' claims were baseless and were being prosecuted in pursuance of a conspiracy to embarrass and ruin plaintiff; the amount of the particular claims not being disputed, and the validity of all depending on the same issue. The court held that this situation tied together the claims as one claim for jurisdictional purposes. The same doctrine is laid down in McDaniel v. Traylor, 196 U. S. 415, 25 S. Ct. 369, 49 L. Ed. 533; McDaniel v. Traylor, 212 U. S. 428, 29 S. Ct. 343, 53 L. Ed. 584.

It may be stated as a conclusion from these cases that jurisdiction may not be conferred by aggregating separate and distinct claims of separate and distinct parties whether in behalf of several plaintiffs joining in a suit against one or more defendants or in behalf of a single plaintiff seeking to enjoin the prosecution against it by several defendants of separate and distinct claims. As the other two defendants are eliminated on this appeal, the question of jurisdiction resolves into one of aggregating the separate and distinct claims of a single party as distinguished from aggregating the separate and distinct claims of separate and distinct parties. We refer to some of the decisions on this question.

This court held in Fitchett et al. v. Blows et al. (C. C. A. 8) 74 F. 47, that an action in equity could be maintained to collect several promissory notes, each being under the jurisdictional amount, where the aggregate of said notes exceeded said amount, and to foreclose separate mortgages securing the notes separately on separate pieces of property. To the same effect is Heffner v. Gwynne-Treadwell Cotton Co. (C. C. A. 8) 160 F. 635, 638, where the court said, "the requisite jurisdictional amount is the aggregate of the judgment prayed for."

In Edwards v. Bates County, Mo., 163 U. S. 269, 16 S. Ct. 967, 41 L. Ed. 155, the action was on two $1,000 bonds and interest coupons. At that time...