Lake Street El. R. Co. v. Farmers' Loan & Trust Co.

• Decision Date: 09 January 1897
• Docket Number: 326.
• Citation: 77 F. 769
• Parties: LAKE STREET EL. R. CO. v. FARMERS' LOAN & TRUST CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

77 F. 769

LAKE STREET EL. R. CO. v. FARMERS' LOAN & TRUST CO. et al.

No. 326.

United States Court of Appeals, Seventh Circuit.

January 9, 1897

Clarence A. Knight and Paul Brown, for appellant.

Runnells & Burry, for Farmers' Loan & Trust Co.

Moran Kraus & Mayer, for American Trust & Savings Bank.

Dupee Judah, Willard & Wolf, for Northern Trust Co.

Before WOODS, JENKINS, and SHOWALTER, Circuit Judges.

WOODS Circuit Judge.

This suit was commenced in the superior court of Cook county Ill., by the Lake Street Elevated Railroad Company, the appellant here, against the Farmers' Loan & Trust Company, the American Trust & Savings Bank, and the Northern Trust Company of Chicago, the appellees. Each of these companies is represented separately by its own attorneys or counsel. The purpose of the suit was to remove, and to procure the appointment of a successor to, the Farmers' Loan & Trust Company as co-trustee with the American Trust &amp Savings Bank in a mortgage upon the road and franchises of the appellant company, and to enjoin, pending the suit and perpetually, the bringing or prosecution, by the Farmers' Loan & Trust Company, of any suit to foreclose the mortgage. The parties are corporations of Illinois, except the Farmers' Loan & Trust Company, which was organized under the laws of New York. That company presented to the superior court, and moved that court to grant, a petition for the removal of the case to the federal court, and, the motion having been denied, procured a transcript which by leave of court was filed in the court below. Thereupon the other parties each filed motions to remand the case to the superior court. These motions, for reasons stated in the opinion of the court (72 F. 804), were overruled. In a later opinion, found in the record, the status of the case in the two courts is explained, and it is stated, in substance, that, in order to avoid conflict, the presiding judges had agreed that a temporary injunction, which, upon the filing of the bill, the superior court had ordered without notice, should be dissolved 'in each court at the same hour,' and thereafter, on April 21, 1896, an order was entered by the court below, on motion of the Farmers' Loan & Trust Company, and after argument, that the injunction granted by the superior court prior to the removal of the cause be dissolved, and it is upon the entering of that order that error is assigned.

The chief objection urged is that the court never acquired jurisdiction of the case, and therefore was without power to make the order. The jurisdiction is denied on the grounds that the case is not between citizens of different states, and that there is involved in the suit neither a federal question nor a separate or separable controversy between the complainant and the Farmers' Loan & Trust Company, to which the other respondents, one or both, are not necessary parties. On the other hand, the right of removal is asserted, both on the ground of a separable controversy, and because a federal question is presented, and at the same time it is contended that this court cannot consider the question of jurisdiction, or whether the case was removable, because that question was determined by the circuit court when it overruled the motions to remand. That ruling, it is contended, cannot be reviewed on the appeal from the later order dissolving the injunction, in considering which the court must proceed on the assumption that the case was properly removed into the circuit court; the order of the circuit court in that respect being reviewable, it is claimed, only upon appeal from a final decree.

The proposition that the power of this court to review the particular order appealed from may be hampered or restricted by any prior ruling of the circuit court, involving the same question or any phase of the question, is manifestly untenable. Whether a court has jurisdiction is an ever-present question. Every step in a case is an assertion of jurisdiction for the purpose of that step. Every order entered is to be read as if it contained an explicity assertion of jurisdiction, and an appeal therefrom challenges the truth of that assertion. It matters not whether there has or has not been a previous ruling upon the question, embodied in some order from which a direct appeal is not allowed. A review of the order from which this appeal was taken, if extended to the question of jurisdiction, would not be technically a review of the refusal of the circuit court to remand the case. It would be, simply a determination of the question of jurisdiction, as asserted and exercised in making the particular order assailed, just as if no other ruling had been made touching the point. When, by the act of March 3 1891, and the amendatory act of February 18, 1895, congress gave a right of appeal to the circuit courts of appeals from interlocutory orders and decrees of injunction, and from orders refusing or dissolving such injunctions, without setting bounds to the scope of the review, power was given to determine the propriety and validity of any order appealed from upon any and every pertinent consideration, and without defeating in large measure the purpose for which the statutes were enacted, it is impossible to concede that, in reviewing an order from which an appeal has been authorized, the court of appeals can determine for itself no proposition of law or fact which the circuit court had determined in the case by an order made before the one appealed from. If that were so, the right of appeal might easily be thwarted. An injunction is granted only upon a bill which prays for it, and if, before granting or refusing the prayer, the court, in passing upon a demurrer to the bill, or on exceptions to an answer, should decide a proposition which lies at the bottom of the application, then, on appeal from an order thereafter made, granting or refusing an injunction, that proposition, though perhaps the only one in dispute, could not be reconsidered. The ruling of the circuit court, as disclosed in a different order, would have to be accepted as the unquestionable basis on which the correctness and validity of the contested decision should be determined in the court of appeals. The authorities cited do not sustain the contention. In Andrews v. Pipe Works, 18 U.S.App. 458, 10 C.C.A. 60, and 61 F. 782, the jurisdiction was not questioned or considered. In Gates v. Bucki, 12 U.S.App. 69, 4 C.C.A. 116, and 53 F. 961, the jurisdiction was made, by special pleas, an issue of fact, which, of course, would not be entered upon in determining an appeal from an interlocutory order of injunction. In Construction Co. v. Young, 11 U.S.App. 683, 8 C.C.A. 231, and 59 F. 721, there was no question of jurisdiction, and the expressions quoted and relied upon are, perhaps, not in harmony with our decision in Andrews v. Pipe Works, supra, wherein we held that so much of an order for the appointment of a receiver as directed the surrender of the property in controversy to the receiver was appealable. In Thompson v. Nelson, 37 U.S.App. 478, 18 C.C.A. 137, and 71 F. 339, and in Duplex Printing-Press Co. v. Campbell Printing-Press & Manufacturing Co., 37 U.S.App. 250, 16 C.C.A. 220, and 69 F. 250, decided in the Sixth circuit, the jurisdiction was unquestioned; and there is no need to dispute the proposition, enunciated in those cases, that, on an appeal from a preliminary injunction, 'we are to consider the correctness of the order from the same standpoint as that occupied by the court granting it. ' There can be no standpoint into which the question of jurisdiction does not enter. Expressly, or by implication, jurisdiction is asserted in every affirmative step taken in a judicial proceeding. Cases are cited in which the supreme court has declared its want of power to inquire into the jurisdiction of the circuit court, or to review its orders, except on appeal from a final decree or judgment. Graves v. Corbin, 132 U.S. 571, 10 Sup.Ct. 196; Railway Co. v. Fitzgerald, 160 U.S. 556, 16 Sup.Ct. 389. But those decisions manifestly signify nothing in respect to the power of the circuit courts of appeals to review interlocutory orders, which have been made appealable to those courts and not to the supreme court. In Turner v. Trust Co., 106 U.S. 552, 1 Sup.Ct. 519, the appeal was 'only from the order confirming the sale,' which had been made in pursuance of a decree of foreclosure, the appellants having 'elected not to appeal from the final decree, although it necessarily involved every question affecting the jurisdiction of the circuit court'; and it was held that, 'in such cases, upon an appeal, not from the final order, but only from an order in execution thereof, the court will not examine the record prior to such decree, to see whether the petition for removal was filed in due time, or whether it makes a case of federal jurisdiction, * * * but will assume that the final decree, being passed by a court of general jurisdiction, and not showing upon its face a want of jurisdiction as to subject-matter or parties, was within the power of the court to render.' Reference is made in the opinion in that case to the overruling of a motion to remand as constituting an adjudication that the...