E. A. Holmes & Co. v. United States Fire Ins. Co.

• Decision Date: 20 January 1906
• Docket Number: 594.,592,593
• Citation: 142 F. 863
• Court: U.S. District Court — Western District of Tennessee
• Parties: E. A. HOLMES & CO. et al. v. UNITED STATES FIRE INS. CO.

142 F. 863

E. A. HOLMES & CO. et al. v. UNITED STATES FIRE INS. CO.

Nos. 592, 593, 594.

United States Circuit Court, W.D. Tennessee, Western Division.

January 20, 1906

These are motions to remand to the state court. The facts as presented on the face of these records are as follows: On the 3d of November, 1904, the complainant, Holmes & Co. was a merchant at Durhamville, Lauderdale county, Tenn., and on that day took out a fire insurance policy for $1,000 on its stock of goods with the defendant insurance company. On the 16th day of December, 1904, Holmes & Co. took out an additional fire insurance policy for $1,500 on this same stock of goods with the defendant insurance company. Both policies ran for one year from the date of issuance. On the . . day of February, 1905, this stock of goods was destroyed by fire. On the 26th day of September, 1905, Holmes & Co. and the Ripley Bank, citizens, Tenn., Tennessee, filed their bill in the chancery court of Lauderdale county, Tenn., against the defendant, a nonresident corporation, seeking to recover on the fire policy for $1,000, issued Nov. 3, 1904. On the same day the same complainants filed their bill in the same court against the same defendant, seeking to recover on the fire policy for $1,500, issued on the 16th day of December 1904. Seasonably the defendant filed its petition for removal to this court of each of these cases, on the grounds of diverse citizenship, and alleging that the amount involved exceeded $2,000, exclusive of interest and costs. As a further ground of removal it is alleged in the petition that these 'two separate suites were thus instituted for the fraudulent purpose of preventing the removal of said causes to the federal court. ' The learned chancellor declined to order either of said suits to be removed. Thereupon the defendant filed its separate answer to each of the bills so filed against it, and moved the court to consolidate the two causes. This motion was allowed, and the decree recited that 'It appearing that defendant has answered said bills, and after argument was heard, the court is of the opinion that said two causes should be consolidated for the purpose of taking proof and hearing. And it is so ordered. ' After the causes were thus consolidated, the defendant filed its petition for removal of the consolidated cause to the federal court, upon the ground of diverse citizenship, and presumably on the ground that the amount involved in the consolidated causes exceeded $2,000 exclusive of interest and cost, though the petition does not allege the last-mentioned jurisdictional fact. This application for removal was also denied by the chancellor. Thereupon, the defendant procured certified copies of the records in each of the separate cases, and also of the consolidates case, and filed them in this court, and the motion to remand in each of these cases is now before the court.

Pierson & Pierson, for complainant.

Kirkpatrick & Son and Metcalf, Minor & Metcalf, for defendant.

McCALL District Judge (after stating the facts).

As Mr Justice Harlan says in McDaniel v. Traylor, 196 U.S. 426, 25 Sup.Ct. 372, 49 L.Ed. 533:

'The question of jurisdiction here presented arises out of facts not to be found in any case brought to our attention or of which we have knowledge.'

The diverse citizenship of the parties is not denied. The jurisdictional question presented is one only as to the amount involved. Did the complainant have the right to bring two separate suits on two separate written contracts against the same insurance company, insuring them against loss by fire? I think so. If they had the right to do so, they would not be acting fraudulently if they brought a suit on each of them, although the suits were instituted the same day and in the same court.

Chapter 866, Act.Cong.Aug. 13, 1888, 25 Stat. 433 (U.S. Comp. St. 1901, p. 508), provides:

'That the Circuit Courts of the United States shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature at common law or in equity, when the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, ' etc.

The amount involved in neither of the cases exceeded the sum or value of $2,000, and hence the chancellor was correct in refusing defendant's petition for removal in each of these separate cases. The complainants had the right to bring but one suit to recover on both policies. They could have joined their causes of action, had they chosen to have done so. They having elected to bring a suit on each policy separately, they have a right to prosecute each suit to a final decision in their own way. This is the rule in actions of tort which might have been brought against many persons, or against one or more of them; but, when brought in the state court jointly, it would contain no separable controversy which would authorize its removal by some of the defendants into the federal jurisdiction, though different defenses are set up by separate answers. 'The cause of action is the subject-matter of the controversy, and that is, for all the purposes of the suit, whatever the plaintiff declares it to be in his pleading. ' Powers v. Chesapeake & ohio R.R. Co. v. Dixon, 179 U.S. 131, 21 Sup.Ct. 67, 45 L.Ed. 121. Alabama Great Southern Railway Company v. Thompson, Adm'r (Oct. Term, 1905) 26 Sup.Ct. 161, 50 L.Ed. . . . .

These cases hold that no separable controversy exists where joint tort-feasors are sued jointly, albeit separate suits would lie against each, and each defendant might have a different defense. Does it stand to reason, then, that a defendant would have the right to say that a complainant must join all his causes of action against one defendant in one suit, so that the total amount involved would confer jurisdiction of the federal court, whereas, the jurisdiction would not exist in any one of such causes of action, and that, because he brings separate suits in each cause of action, he does it for the fraudulent purpose of preventing a removal to the United States court? To so hold would be equivalent to holding that one who brings his action in the state court for damages to recover $1,999 does so for the fraudulent purpose of preventing the removal of the cause to the United States courts. Such a position is not tenable.

In addition, the rule is now well settled that under the judiciary act of 1887-88 a suit cannot be removed from the...