Jellison v. Krell Piano Co.

Citation246 F. 509
Decision Date24 November 1917
Docket Number3112.
PartiesJELLISON v. KRELL PIANO CO. et al.
CourtUnited States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky

B. F Graziani, of Covington, Ky., for plaintiff.

S. D Rouse, of Covington, Ky., and Maxwell & Ramsey, of Cincinnati, Ohio, for defendants.

COCHRAN District Judge.

This cause is before me on motion to remand. It is a suit to recover $2,900 for services rendered as general manager of a musical department and to enjoin violation of a copyright for a method of co-operative player piano playing. Though not set forth in separately numbered paragraphs, two causes of action are thus presented, one for the recovery of money and the other for an injunction. The ground of removal was diversity of citizenship. The petition for removal alleged that the matter in dispute exceeded, exclusive of interest and costs, the sum or value of $3,000. Since the filing of the transcript here on plaintiff's motion, the cause of action for the injunction has been dismissed. So that as matters now stand this is a suit to recover $2,900; i.e., a suit not properly within this court's jurisdiction. It was upon such dismissal and because the suit could not have been removed to this court if, when it was removed, it had been as it then stood, that the motion to remand was made. The question is foreclosed by a decision of the Supreme Court and two decisions of the appellate court of this district. They are those rendered in these cases, to wit: Kirby v. American Soda Fountain Co., 194 U.S. 141, 24 Sup.Ct. 619, 48 L.Ed. 911; Riggs v. Clark, 71 F. 560, 18 C.C.A. 242; Hayward v. Nordberg Mfg. Co., 85 F. 4, 29 C.C.A. 438.

In the Supreme Court case the purchaser of a soda fountain, for which he had exchanged an old one and agreed to pay $2,025 in addition, brought suit in a state court for rescission for fraud and recovery of $2,500 damages. The suit was removed to the federal court on the ground of diversity of citizenship. There the vendor filed a cross-bill seeking to recover the balance of the $2,025 then due, to wit, $1,700, and enforcement of the lien. Thereupon, on plaintiff's motion, the original bill was dismissed without prejudice. This left the cross-bill undisposed of. To this the plaintiff filed a plea to the jurisdiction on the ground that the amount sought to be recovered did not exceed $2,000, exclusive of interest and costs, the then jurisdictional amount. It does not seem that he sought thereby to have the cross-bill remanded to the state court, but to have it dismissed for want of jurisdiction. The plea was overruled, and that on two grounds. One was that notwithstanding the dismissal of the original bill the amount in controversy was still sufficient to give jurisdiction. It is not necessary to pause to explain how this was made out. The other was that, though the amount in controversy was not sufficient, the court had jurisdiction of the cross-bill when it was filed, and that jurisdiction was not ousted by the subsequent dismissal of the original bill. The court, through Mr. Chief Justice Fuller, said:

'It is the general rule that, when the jurisdiction of a Circuit Court of the United States has once attached, it will not be ousted by subsequent change in the conditions.'

Again, after showing that the court had acquired jurisdiction by the removal proceedings, he said:

'The jurisdiction thus acquired by the Circuit Court was not divested by plaintiff's subsequent action.'

The general rule stated was put as the generalization of the decisions in these five cases, to wit: Morgan v. Morgan, 2 Wheat. 290, 4 L.Ed. 242; Clarke v. Mathewson, 12 Pet. 165, 9 L.Ed. 1041; Kanouse v. Martin, 15 Ow. 198, 14 L.Ed. 660; Roberts v. Nelson, Fed. Cas. No. 11907; Cook v. United States, 2 Wall. 218, 17 L.Ed. 755.

By the first two it was held that, if jurisdiction of a federal court was acquired by reason of diversity of citizenship, it would not be ousted by the diversity ceasing to exist in the progress of the case therein. By the other three it was held that, if the amount in controversy was sufficient when a federal court acquired jurisdiction, it would not be divested if plaintiff reduced the matter in dispute to less than the jurisdictional amount. In the case of Chicago v. Mills, 204 U.S. 321, 27 Sup.Ct. 286, 51 L.Ed. 504, the Supreme Court, through Mr. Justice Day, citing that case, said:

'The question of jurisdiction must be decided, having reference to the attitude of the case at the date the bill was filed.'

In Riggs v. Clark it was held that a suit to cancel a mortgage for $2,120 should not be remanded after removal, because, by stipulation, the actual amount in controversy was reduced to a sum not over $2,000. The decision in Hayward v. Nordberg Mfg. Co. was to the same effect. The court, through Judge Lurton, said:

'Where a cause is removed to the Circuit Court of the United States by a defendant, and the record at the time of removal shows a dispute or controversy within the jurisdiction of a Circuit Court in respect to amount, the jurisdiction over that case cannot be defeated by the subsequent concession of the plaintiff that the amount he claimed was less than that he had stated in pleadings filed before such removal. Neither would such concession be strengthened by any stipulation as to the real facts of his demand, nor by any other form of concession made after removal.'

This case, though not within the facts of these cases, is within the principle applied in them, and hence is governed by them.

The plaintiff relies on these decisions, to wit: Fischer v. Star Co. (D.C.) 227 F. 955; Jones v. W. U. Tel. Co. (D.C.) 233 F. 301, which was based on section 37 of the Judicial Code (Comp. St. 1916, Sec. 1019). That section is in these words, to wit:

'If in any suit commenced in a District Court, or removed from a state court to a District Court of the United States, it shall appear to the satisfaction of the said District Court, at any time after such suit has been brought or removed thereto, that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of said District 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 this chapter, the said District Court shall proceed no further therein, but shall dismiss the suit or remand it to the court from which it was removed, as justice may require, and shall make such order as to costs as shall be just.'

This provision is exactly the same as section 5 of the act of March 3, 1875, except the last paragraph of that section, which was repealed by the Acts of 1887-88. It originated there. Prior thereto there was no such provision in the federal jurisdictional legislation. In the Fischer Case the suit as brought in the state court was for infringement of a registered trade-mark. It was removed to the federal court because a federal question was involved. After the removal, an amended bill was filed omitting all mention of the registered trade-mark and alleging unfair competition. As there was no diversity of citizenship, the defendant thereupon moved to dismiss the suit. The plaintiff moved to remand it under section 37. The motion to dismiss was overruled, and that to remand sustained. There is room to say that the action of the court should have been the reverse of that taken. The amended bill set up an entirely new cause of action-- one that had not been brought in the state court. By the action taken a suit was remanded to the state court that had not been brought there. The Jones Case was a suit to recover damages for negligence in transmitting and delivering a telegram. Recovery was sought for $2,500 for mental suffering and $550 for expenses incurred and lost services. These two amounts were sought to be recovered in separate counts. The removal was had on the ground of diversity of citizenship. A demurrer was sustained to the first count for mental suffering. Thereupon the suit was remanded. Judge Bledsoe said:

'It would seem proper, therefore, that the court, having determined that no cause of action is stated in the complaint as to any matter of which this court has jurisdiction, suo motu should remand to the state court, the proper tribunal for its trial, the cause of action set forth in the second count of the complaint.'

It is on this case that plaintiff mostly relies in support of its motion to remand. This decision also is of doubtful soundness. Thereby the plaintiff was deprived of his right to question the correctness of the court's ruling on the first count in the appellate court, and on the return of the case to the state court there was nothing to prevent it, if it thought the first count good, from setting aside the order sustaining the demurrer and proceeding with it as well as the second count. These two decisions therefore yield very slight support to plaintiff's position.

But it must be admitted that section 37 of the Judicial Code presents some difficulty, and this particularly in view of the decisions of the Supreme Court in the cases of Texas Transportation Co. v. Seeligson, 122 U.S. 519, 7 Sup.Ct 1261, 30 L.Ed. 1150, and Torrence v. Shedd, 144 U.S. 527, 12 Sup.Ct. 726, 36 L.Ed. 528. In the Seeligson Case the suit had been removed by one of several defendants between whom and the plaintiff there was diversity of citizenship on the ground of a separable controversy between those two parties, and thereafter, on motion of plaintiff, the suit was discontinued as to such defendant; there being no diversity of citizenship between plaintiff and other defendants. It was held that the lower court properly remanded the suit to the state...

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