Holbrook v. J. J. Quinlan & Co.

• Decision Date: 08 May 1911
• Citation: 84 Vt. 411,80 A. 339
• Court: Vermont Supreme Court
• Parties: HOLBROOK v. J. J. QUINLAN & CO.

80 A. 339

84 Vt. 411

HOLBROOK

v. J. J. QUINLAN & CO.

Supreme Court of Vermont. Orleans.

May 8, 1911.

Exceptions from Orleans County Court.

Action by Frank F. Holbrook against J. J. Quintan & Co. There was a verdict and judgment for plaintiff, and defendant brings exceptions. Affirmed and cause remanded.

Argued before HOWELL, C. J., and MUXSON, WATSON, HASELTON, and POWERS, JJ.

Howe & Hovey, for plaintiff.

Elisha May, for defendant.

POWERS, J. The plaintiff patronized a "Stock Exchange" conducted at Newport by one Charles N. Brady. The result was not altogether unusual—he lost his money. He brought a suit against this defendant returnable to Orleans county court, predicating his claim upon the ground that this stock proposition was the defendant's, and that Brady was its agent. This suit was on the defendant's motion (it being a Maine corporation) removed to the federal court, and was therein tried at its May term, 1907. The declaration in that suit counted specially on six different stock transactions, each bearing a separate number and date, and contained a general count in assumpsit. When at that trial the plaintiff attempted to give evidence of the two trades here in suit, numbered 288 and 294 and dated April 6, 1905, and April 10, 1905, respectively, the defendant objected on the ground that there were no special counts in the declaration covering these trades, and that recovery could not he had thereon under the general count. The circuit court intimated an opinion that no recovery could be had for the damages sought, which Included dividends and rights which had accrued on stocks purchased without special counts upon the respective contracts. The plaintiff, without attempting to amend, abandoned his claim for damages for the breach of these two special contracts, and attempted to recover the money paid in upon them, insisting that in the circumstances he could rescind the contracts and recover the consideration paid under the general count. In this position he was sustained by the Circuit Court, and he amended his specification accordingly. The jury rendered a verdict for the plaintiff which included the amounts paid in on these two trades and interest thereon—$1,063.30. The defendant carried the case to the Circuit Court of Appeals, which handed down a decision in May, 1908, holding that the declaration did not contain proper counts to warrant a recovery for damages for breach of the special contracts embodied in these two trades, and that the plaintiff could not rescind and recover the money paid in. The judgment order contained the following provision: "It is hereby ordered, adjudged, and decreed that the judgment of said Circuit Court be, and it hereby is, reversed unless the plaintiff remits $1,063.30 within such time as may be fixed by the Circuit Court. If such remittitur be made, the judgment is affirmed." The plaintiff seasonably complied with this requirement by filing a remittitur of the amount specified, and a few days later the defendant filed a "protest," wherein it insisted that, if the plaintiff intended to make further claim for any of the items included in his specification, he should do so in the Circuit Court, and that no other court had or could have jurisdiction over them or any of them. The Circuit Court gave no heed to this, and on June 26, 1908, issued execution for the amount of the original judgment less the amount remitted. This execution was promptly paid. The case in hand is an action of special assumpsit on the two trades above referred to—Nos. 288 and 294. The defendant (having first pleaded a special plea which is not here involved) pleaded the general issue and a special plea in bar. The latter set out all the facts regarding the first suit as above recited. The defendant filed a motion to remove this case to the Circuit Court and objected to all proceedings in the state court, on the ground that these two transactions were finally settled and determined in the first suit; and, if not, were finally removed to the Circuit Court, and only triable therein. At the close of the evidence the defendant moved for a verdict on the ground that the state court had no jurisdiction of the subject-matter, that he was estopped by the proceedings in the first suit, and that the matters involved were res adjudicata. On all these points the court ruled against it, and proper exceptions were reserved.

We agree with the defendant that, when a cause is removed to the federal court, it all goes. No part of the suit or the subject-matter thereof remains in the state court. Friedman v. Israel (C. C.) 26 Fed. 804; Company v. Carter (C. C.) 88 Fed. 707; Kern v. Huidekoper, 103 D. S. 491, 26 L. Ed. 354; Barney v. Latham, 103 U. S. 205, 26 L. Ed. 514. The defendant's position, however, that the removal finally transfers jurisdiction to the federal court, finds support only in B. & O. Railroad Co. v. Fulton, 59 Ohio St. 575, 53 N. E. 205, 44 L. R. A. 520, and the dissenting opinion in Mclver v. Fla. Cent. & P. R. Co., 110 Ga. 223, 36 S. E. 775, 65 L. R. A. 437, cited below. Tn the former case it is expressly held that when a case is removed to and thereafter disposed of in the federal court, even if such disposal is otherwise than on the merits, the plaintiff cannot recommence the action in the state court; citing Cox v. E. Tenn. V. & G. R. Co., 68 Ga. 446. It may safely be asserted that, after a cause has been removed, the state court can proceed no further with it or any part of it until its jurisdiction is in some way restored. Carson v. Dunham, 121 U. S. 421, 7 Sup. Ct. 1030, 30 L. Ed. 992.

But; its jurisdiction is restored when the case is disposed of in the federal court otherwise than on its merits. This proposition is abundantly supported by the cases. Thus in Hooper v. A. K. & N. Ry. Co., 106 Tenn. 28, 60 S. W. 607, 53 L. R. A. 931, it is held that one may take a voluntary nonsuit in an action properly removed to the federal court and begin another action in the state court—criticising B. & O. R. Co. v. Fulton, supra. See, also, Ill. Cent. R. Co. v. Benz, 108 Tenn. 670, 69 S. W. 317, 58 L. R. A. 690, 91 Am. St. Rep. 763. Again, in Young v. So. Bell T. & T. Co., 75 S. C. 326, 55 S. E. 765, 7 L. R. A. (N. S.) 501, it is held that the removal does not confer such exclusive jurisdiction upon the federal court that, upon a discontinuance, the plaintiff could not begin a new action in the state court. And in McIver v. Fla. Cent, etc., R. Co., 110 Ga. 223, 36 S. E. 775, 65 L. R. A. 437, it is held that one may become nonsuit or voluntarily dismiss an action properly removed, and thereafter begin a new suit on the same cause of action in the state court. The opinion in this case points out the fact that Cox v. E. Tenn. V. & G. R Co., 68 Ga. 446, is not an authority to the contrary. In Stevenson's Adm'r v. Ill. Cent. R. Co.; 117 Ky. 855, 79 S. W. 767, 4 Am. & Eng. Ann. Cas. 890, it is held that an action dismissed in the federal court, to which it has been removed, does not prevent a state court from assuming jurisdiction in a new suit on the same cause of action. To the same effect are Rodman v. Mo. Pac. Ry. Co., 65 Kan. 645, 70 Pac. 642, 59 L. R. A. 704; Gassman v. Jarvis (C. C.) 100 Fed. 146, wherein B. & O. R. Co. v. Fulton is criticised with some severity; Foley v. Cudahy Packing Co., 119 Iowa, 246, 93 N. W. 284; Fleming v. Railroad, 128 N. C. 80, 38 S. E. 253; and other cases to be found in 17 Dec. Dig. under "Removal of Causes," § 109. And it makes no difference if the sum declared for in the new suit is so small that the suit cannot be removed. Mclver v. Railroad Co.; Hooper v. Railway Co.; Young v. So., etc., Co., supra. It is true, as argued by the defendant, that the court will not allow one to be tricked out of his right of removal (Yawkey v. Richardson, 9 Mich. 529, 81 Am. Dec. 769); but here nothing of the kind was attempted or accomplished.

The plaintiff was ready enough to try his whole case in the federal court, but the defendant's objection stood in the way. Rather than risk an amendment, the plaintiff waived a good part of his claim under these two trades, and tried to recover under his general count. This attempt the defendant rendered unavailing by taking the case to the Court of Appeals and there prevailing. Surely in these circumstances the defendant cannot consistently claim that it has been tricked out of its rights.

Nor was this suit prematurely brought; for, without saying when this action should be considered to have been commenced and without saying whether or not the pendency of a former action should be pleaded in advance of a plea to the merits, it is not necessary that the actual dismissal in the federal court should precede the commencement of the second action. Dana & Co. v. Blackburn, 121 Ky. 706, 90 S. W. 237. See, also, Howell v. Howell (Ala.) 54 South. 601.

When the former case was removed, the plaintiff first claimed to recover therein just what he now sues for; but, as we have seen, he finally sought to prevail upon an entirely different cause of action. His first claim was based on the theory of a binding contract broken by the defendant; his last, upon a rescinded contract. The first was not disposed of on its merits. The last was held to be unfounded. Nothing affecting the cause of action now declared upon was then and there decided except a question of pleading. That judgment is only conclusive on the question whether the plaintiff could rescind these two contracts and recover the money paid in. That is the only res adjudicated.

Nor is the plaintiff estopped by an election of remedies. Though a suit for damages and a suit for a recovery of the money paid in are inconsistent within the rule of White v. White, 68 Vt. 161, 34 Atl. 425, since one affirms and the other rescinds the contract, the plaintiff is not precluded, since it turned out that he never had the remedy he sought to enforce, and the pursuit of a remedy which does not exist...