Fountain v. Town of Angelica

• Decision Date: 01 April 1882
• Citation: 12 F. 8
• Parties: FOUNTAIN v. TOWN OF ANGELICA.
• Court: U.S. District Court — Northern District of New York

12 F. 8

FOUNTAIN v. TOWN OF ANGELICA.

United States Circuit Court, N.D. New York.

April, 1882

Spencer Clinton, for plaintiff.

Hamilton Ward, for defendant.

WALLACE C.J.

By the fifth section of the act of March 3, 1875, to determine the jurisdiction of circuit courts of the United States, it is declared that if at any time in the progress of a case either originally commenced in a circuit court or removed there from a state court, it shall appear that such suit does not really involve a dispute or controversy properly within the jurisdiction of the court, or that the parties to said suit have been improperly or collusively made or joined either as plaintiffs or defendants, for the purpose of creating a case cognizable or removable under the act, the said circuit court shall proceed no further, but shall dismiss the suit or remand it to the court from which it was removed.

This action presents the question whether the plaintiff has been improperly or collusively made a party for the purpose of creating a case cognizable by this court within the meaning of the section referred to.

It is said by the supreme court in Hawes v. Contra Costa Water Co. 25 Alb.Law J. 146, (S.C. 11 F. 93, note,) that this statute strikes a blow at improper and collusive attempts to impose upon this court cognizance of cases not justly belonging to it. Before this act was passed it was settled law that although a transfer of the subject of the controversy may have been made for the purpose of vesting an interest in parties competent, by reason of their domicile to litigate in the federal courts, that circumstances would not defeat the jurisdiction if the transaction invested the assignee with the real interest in the subject-matter; yet if the assignment was colorable only, and the real interest still remained in the assignor, jurisdiction would not be entertained. Barney v. Baltimore City, 6 Wall. 280. The section in question, therefore, was quite unnecessary if it was only intended to reach a case in which the plaintiff, by assignment, obtained merely a colorable title to the subject of the controversy. It is not difficult to discern the purpose of the section. It had long been notorious that the jurisdiction of the circuit courts was constantly invoked for the benefit of parties not within the class which the constitutional grant of jurisdiction to the federal courts was intended to include; by parties who, because they were citizens of the same state as their adversary, could only resort to the courts of the state, but who, for some ulterior motive, desired to resort to the federal courts. The convenient device was resorted to of transferring the subject of the controversy to a citizen of another state, a friendly coadjutor, who, while acquiring the legal title, was expected to litigate for the benefit of the original party. Thus, new parties were introduced into controversies in which they had no substantial interest, merely to bring cases into the federal jurisdiction. It cannot be doubted that the provision in question was intended to meet and prohibit a jurisdiction sought and obtained by such collusive methods. It should be held that a plaintiff who has been introduced into a controversy by an assignment or transfer merely that he may acquire a standing and relation to the controversy which will enable him to prosecute it for the beneficial interests of the original party, 'has been...