Gableman v. Peoria, D. & E. Ry. Co.

• Decision Date: 22 March 1900
• Docket Number: 546.
• Citation: 101 F. 1
• Parties: GABLEMAN v. PEORIA, D. & E. RY. CO. et al. [1]
• Court: U.S. Court of Appeals — Seventh Circuit

101 F. 1

GABLEMAN v. PEORIA, D. & E. RY. CO. et al. ^[1]

No. 546.

United States Court of Appeals, Seventh Circuit.

March 22, 1900

W. A Cullop, for plaintiff in error.

W. S Horton, for defendants in error.

Before WOODS, JENKINS, and GROSSCUP, Circuit Judges.

GROSSCUP Circuit Judge.

This action was brought originally in the superior court for Vanderburg County, in the state of Indiana, by the plaintiff in error, a citizen of Indiana, against the defendants in error, to recover damages for personal injuries said to have been sustained by the plaintiff in error through the negligence of the defendants in error in the operation of a railway train, and the failure to properly operate the gates at a railway crossing. The defendant railway company is a corporation organized under the laws of the State of Indiana and the defendant George Colvin is a citizen of Indiana. The defendant Edward O. Hopkins was, at the time the injuries were received, and the suit was commenced, receiver of the defendant railway company, by appointment of the United States Circuit Court for the Southern district of Illinois, and was, at the time of the injuries, in sole control and management of the railway company; having an office in Vanderburg County, in the State of Indiana. The record does not disclose his place of residence as an individual. In due time after the commencement of the suit the defendant, Edward O. Hopkins, receiver, on his sole petition, removed the cause into the Circuit Court for the District of Indiana, upon the ground that it was a case arising under the Constitution and laws of the United States. A motion to remand was entered by the plaintiff in error, and overruled by the Circuit Court for the District of Indiana (82 F. 790); and at the trial, subsequently, a verdict was, by direction of the court, returned for the defendants in error.

The plaintiff in error challenges the jurisdiction of the Circuit Court for the District of Indiana, and the inquiry thus raised lies at the threshold of this case.

The receiver is not appointed under any law or provision of the Constitution of the United States peculiarly relating to a receiver. His appointment arises from the general equity powers of the United States Courts, in common with other courts exercising chancery jurisdiction, to appoint receivers in given cases. If an action against him, such as the one under consideration, can be said to arise under the Constitution and laws of the United States, it is simply because the court making the order of appointment is itself organized under the laws and the Constitution of the United States. In the earliest case (Osborn v. Bank, 9 Wheat. 738, 6 L.Ed. 204), construing the language of the constitution relating to cases arising under the Constitution and laws of the United States, Chief Justice Marshall says:

'We think, then, that, when a question to which the judicial power of the Union is extended by the constitution forms an ingredient of the original cause, it is in the power of congress to give the circuit courts jurisdiction of that cause, although other questions of fact or of law may be involved in it. * * * The case of the bank is, we think, a very strong case of this description. The charter of incorporation not only creates it, but gives it every faculty which it possesses. The power to acquire rights of any description, to transact business of any description, to make contracts of any description, to sue on those contracts, is given and measured by its charter, and that charter is a law of the United States. This being can acquire no right, make no contract, bring no suit, which is not authorized by a law of the United States. It is not only itself the mere creature of a law, but all its actions and all its rights are dependent on the same law. Can a being thus constituted have a case which does not arise literally, as well as substantially, under the law? Take the case of a contract, which is put as the strongest against the bank. When a bank sues, the first question which presents itself, and which lies at the foundation of the cause, is, has this legal entity a right to sue? Has it a right to come, not into this court particularly, but into any court? This depends on a law of the United States. The next question is, has this being a right to make this particular contract? If this question be decided in the negative, the cause is determined against the plaintiff; and this question, too, depends entirely on a law of the United States. These are important questions, and they exist in every possible case. The right to sue, if decided once, is decided forever; but the power of congress was exercised antecedently to the first decision on that right, and, if it was constitutional then, it cannot cease to be so, because the particular question is decided. It may be revived at the will of the party, and most probably would be renewed, were the tribunal to be changed. But the question respecting the right to make a particular contract, or to acquire a particular property, or to sue on account of a particular injury, belongs to every particular case, and may be renewed in every case. The question forms an original ingredient in every cause. Whether it be in fact relied on or not in the defense, it is still a part of the cause, and may be relied on. The right of the plaintiff to sue cannot depend on the defense which the defendant may choose to set up. His right to sue is anterior to that defense, and must depend on the state of things when the action is brought. The question which the case involves, then, must determine its character, whether those questions be made in the cause or not.'

In Railway Co. v. Cox, (145 U.S. 594, 12 Sup.Ct. 905, 26 L.Ed. 829,) the action was by defendant in error, a citizen of Texas, in the United States Circuit Court for the Eastern District of Texas, against John C. Brown and Lionel L. Sheldon, as receivers of the Texas & Pacific Railway Company, to recover damages for the death of the defendant in error. It did not appear that the defendants were citizens of a state other than the plaintiff, and for that failure the jurisdiction of the court was questioned. Fuller, C.J., said:

'The Texas & Pacific Railway Company is a corporation deriving its corporate powers from acts of congress, and was held in Pacific R. Removal Cases, 115 U.S. 1, 5 Sup.Ct. 1113, 29 L.Ed. 319, to be entitled, under the act of March 3, 1875, to have suits brought against it in the state courts removed to the circuit courts of the United States, on the ground that they were suits arising under the laws of the United States. The reasoning was that this must be so, since the company derived its powers, functions, and duties from those acts, and suits against it necessarily involved the exercise of those powers, functions, and duties, as an original ingredient. * * * In respect of liability, such as is set up here, the receiver stands in the place of the corporation. As observed by Mr. Justice Brown, delivering the opinion of the court, in McNulta v. Lochridge, 141 U.S. 327, 331, 12 Sup.Ct. 11, 13, 35 L.Ed. 796, 800: 'Actions against the receiver are, in law, actions against the receivership, or the funds in the hands of the receiver; and his contracts, misfeasances, negligences, and liabilities are official, and not personal, and judgments against him as receiver are payable only from funds in his hands.''

Railway Co. v. Cody, (166 U.S. 606, 17 Sup.Ct. 703, 41 L.Ed. 1132,) was a case originally commenced by the defendant in error in the district court of Tarrant County, Tex., against the Texas & Pacific Railway Company, to recover for personal injuries, and was removed by the Texas & Pacific Railway Company to the Circuit Court of the United States for the Northern District of Texas. In the petition filed by the defendant in error in the state court at the commencement of the suit, the Texas & Pacific Railway Company was designated as a private corporation created and existing under the laws of the State of Texas, the same state of which the defendant in error was a citizen, but in the petition for removal it was stated that at the commencement of the suit the railway company was a corporation organized under and by virtue of certain Acts of Congress. The gist of the decision is that, notwithstanding the defendant in error's mis-statement in the original petition respecting the governmental origin of the railway corporation, the railway company may, by petition for removal, bring to the court the fact that it is a corporation under the laws of the United States. It necessarily follows, upon the principle stated in Railway Co. v. Cox, supra, that the Circuit Court of the United States has jurisdiction. It will be observed that in these cases the parties invoking jurisdiction were either corporations organized under laws of the United States, and deriving their rights to sue and be sued, and their general rights to carry on business, therefrom, or were successors in trust to such corporations. The cases therefore fall within the principles announced by Chief Justice Marshall in Osborn v. Bank, supra.

Cases of another class, however, have been called to our attention, in support of the court's jurisdiction. Buck v. Colbath, (3 Wall. 334, 18 L.Ed. 257), and Feibelman v. Packard, (109 U.S. 421, 3 Sup.Ct. 289, 27 L.Ed. 984,) were actions against the United States marshal. The first was prosecuted through the state courts, coming to the Supreme Court on error to the state court. The second, begun originally in the state court, was removed by the marshal into the Federal Court.

In the case first named, the suit was against the marshal, to recover in trespass for the taking of goods, and the defense was that the goods were...