Lawrence Trust Co. v. Chase Securities Corp.
| Decision Date | 27 November 1935 |
| Citation | 198 N.E. 905,292 Mass. 481 |
| Parties | LAWRENCE TRUST CO. v. CHASE SECURITIES CORPORATION. WESTERN MASSACHUSETTS BANK & TRUST CO. v. SAME. PLYMOUTH COUNTY TRUST CO. v. SAME. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Actions of contract or tort by the Lawrence Trust Company against the Chase Securities Corporation, by the Western Massachusetts Bank & Trust Company against the Chase Securities Corporation, and by the Plymouth County Trust Company against the Amerex Holding Corporation. From orders allowing removal of the actions to the District Court of the United States, the plaintiffs appeal.
Orders affirmed.
Appeals from Superior Court, Essex County; Gray and Broadhurst judges.
F. L Simpson, of Boston (D. J. Cohen and J. A. Scolponeti, both of Boston, with him) for appellants.
M. Jenckes and R. Donaldson, both of Boston, for appellee.
The writ in each of these actions, sued out of the Superior Court, is brought in the name of a banking corporation organized under the laws of this commonwealth against the Chase Securities Corporation, now known as Amerex Holding Corporation, organized under the laws of the state of New York. Each cause of action is described as contract or tort. Each plaintiff is stated, in the writ or declaration or both, to be in the possession of Henry H. Pierce, commissioner of banks for this commonwealth. The defendant in each action seasonably filed a petition under sections 28 and 29 of the Judicial Code of the United States (U.S.C.A. title 28, §§ 71, 72), that the suit by removed to the District Court of the United States for the District of Massachusetts because the action was of a civil nature, the amount in dispute exceeded $3,000 exclusive of interest and costs and the plaintiff and the defendant were citizens and residents of different states, and that the bond filed therewith be accepted as good and sufficient. In each case an order was entered accepting the petition and bond and in substance allowing or directing the removal of the suit to the District Court of the United States, and the plaintiff appealed to this court.
The appeals are rightly before us. Ellis v. Atlantic & Pacific R. Co., 134 Mass. 338; Long v. Quinn Bros., Inc., 215 Mass. 85, 86, 102 N.E. 348; Munnss v. American Agricultural Chemical Co., 216 Mass. 423, 424, 103 N.E. 859; Commonwealth v. Norman, 249 Mass. 123, 126, 144 N.E. 66.
The plaintiffs raise no question as to form or seasonableness of the petition for removal, the sufficiency of the bond, or the jurisdictional amount involved. The single contention presented in behalf of each plaintiff is that the case is not subject to removal because it is in its essential nature and effect an action brought by the commonwealth through one of its administrative officers and, as the commonwealth is not considered a citizen within the meaning of the removal statute, the petition for removal on the ground of diversity of citizenship fails in law. If that contention is sound, the cases are not removable. Commonwealth v. Norman, 249 Mass. 123, 127, 144 N.E. 66; Stone v. South Carolina, 117 U.S. 430, 433, 6 S.Ct. 799, 29 L.Ed. 962; Title Guaranty & Surety Co. v. State of Idaho For Use of Allen, 240 U.S. 136, 140, 36 S.Ct. 345, 60 L.Ed. 566; Lankford v. Platte Iron Works Co., 235 U.S. 461, 35 S.Ct. 173, 59 L.Ed. 316; Puerto Rico v. Russell & Co., 288 U.S. 476, 484, 53 S.Ct. 447, 77 L.Ed. 903; City Bank Farmers' Trust Co. v. Schnader, 291 U.S. 24, 29, 54 S.Ct. 259, 78 L.Ed. 628.
On a petition for removal all issues of fact must be tried in the federal court, as well those relating to the removability of the cause as those touching the merits of the suit. The state court is without jurisdiction in that particular but must accept as true in determining whether to surrender jurisdiction the allegations of fact set forth in the petition. Burlington, Cedar Rapids & Northern R. Co. v. Dunn, 122 U.S. 513, 515, 516, 7 S.Ct. 1262, 30 L.Ed. 1159; Kansas City, Fort Scott & Memphis Railroad & Daughtry, 138 U.S. 298, 303, 11 S.Ct. 306, 34 L.Ed. 963; Chesapeake & Ohio R. Co. v. Cockrell, 232 U.S. 146, 154, 34 S.Ct. 278, 58 L.Ed. 544.
It is, however, ‘ will settled that if, upon the face of the record, including the petition for removal, a suit does not appear to be a removable one, then the state court is not bound to surrender its jurisdiction, and may proceed as if no application for removal had been made.’ Madisonville Traction Co. v. St. Bernard Mining Co., 196 U.S. 239, 245, 25 S.Ct. 251, 253, 49 L.Ed. 462; Stone v. South Carolina, 117 U.S. 430, 432, 6 S.Ct. 799, 29 L.Ed. 962; Oakley v. Goodnow, 118 U.S. 43, 6 S.Ct. 944, 30 L.Ed. 61; Kimball v. Evans, 93 U.S. 320, 23 L.Ed. 920; Southern R. Co. v. Lloyd, 239 U.S. 496, 36 S.Ct. 210, 60 L.Ed. 402; Chesapeake & Ohio R. Co. v. Cockrell, 232 U.S. 146, 34 S.Ct. 278, 58 L.Ed. 544; Great Northern R. Co. v. Alexander, 246 U.S. 276, 38 S.Ct. 237, 62 L.Ed. 713. There is nothing contrary to this proposition in Chesapeake & Ohio R. Co. v. McCabe, 213 U.S. 207, 29 S.Ct. 430, 53 L.Ed. 765.
It has been the practice and held to be the duty of this court in cases properly brought before it, to consider and decide whether as matter of law a cause for removal is made on the face of the record, of course subject to review by the Supreme Court of the United States. That was adjudicated in Stone v. Sargent, 129 Mass. 503, in an exhaustive opinion by Chief Justice Gray speaking for the court, wherein all the pertinent and authoritative decisions previously rendered were reviewed. It was there said, 129 Mass. 503, at page 508:‘ This court has uniformly held that any court of the Commonwealth, before declining the further exercise of jurisdiction over a cause, must consider and determine whether, upon the record and papers before it, the petitioner has brought himself within the acts of Congress.’ Similar procedure was followed in Duff v. Hildreth, 183 Mass. 440, 67 N.E. 356, where the opinion of the court was delivered by Chief Justice Knowlton, To the same effect are Broadway National Bank v. Adams, 130 Mass. 431; Danvers Savings Bank v. Thompson, 130 Mass. 490; Ellis v. Atlantic & Pacific R. Co., 134 Mass. 338; Long v. Quinn Bros., Inc., 215 Mass. 85, 86, 102 N.E. 348; Munnss v. American Agricultural Chemical Co., 216 Mass. 423, 424, 103 N.E. 859; Booki v. Pullman Co., 220 Mass. 71, 107 N.E. 418; Eaton v. Walker, 244 Mass. 23, 27, 138 N.E. 798; Commonwealth v. Norman, 249 Mass. 123, 127, 144 N.E. 66; Mahoney v. United States Shipping Board Emergency Fleet Corporation, 253 Mass. 234, 236, 148 N.E. 454, and Pringle v. Storrow, 256 Mass. 561, 153 N.E. 26, 49 A.L.R. 1222. See, also, Tapley v. Martin, 116 Mass. 275, 276.
The state is not named as a party to the present actions. In each, the trust company is described as the party plaintiff with the additional statement that it is in the possession of the commissioner of banks. The statutes of the Commonwealth have created that office, have regulated in detail the right of its holder to take possession of trust companies, and have enumerated his powers after having taken such possession. The court takes judicial notice of these public laws. No evidence touching them is required. The allegations set forth on the record in the light of these governing statutes reveal the question of law here involved without proof.
Every presumption is in favor of legality. Duffy v. Treasurer & Receiver General, 234 Mass. 42, 50, 125 N.E. 135; Hall v. Barton (Mass.) 195 N.E. 753; Korbly v. Springfield Institution for Savings, 245 U.S. 330, 336, 38 S.Ct. 88, 62 L.Ed. 326. It must be assumed that the commissioner of banks, pursuant to the statutes, is regularly and lawfully in possession of each of the trust companies here named.
The question whether the state is the real party plaintiff in each case must be determined in accordance with essential and underlying principles and not upon surface appearances. Mere nomenclature may not be decisive. The governing statutes empowering the commissioner of banks to take possession of and to liquidate trust companies are in G.L. (Ter.Ed.) c. 167, §§ 22 to 36 and sections 31A and 35A, as added by St. 1933, c. 277, and c. 302. The comprehend under the general term ‘ bank’ savings banks, co-operative banks, trust companies and other persons, partnerships, associations and corporations subject to the supervision of the commissioner of banks. By section 22, he may take possession of the property and business of any bank when satisfied of the existence of specified conditions which have a tendency to indicate that its business cannot be conducted by it longer with safety to the public. Cosmopolitan Trust Co. v. Mitchell, 242 Mass. 95, 112, 136 N.E. 403. Provision is made by section 23 for notice to interested parties and for permitting resumption of business by the bank with his consent upon conditions which include payment of certain expenses incurred in prosecuting or defendant suits from the funds of the bank. By section 24, power is conferred to collect debts and claims due the bank, to enforce the liabilities of stockholders, and to liquidate the affairs of the bank. By section 25, he is authrorized in the name of the bank to prosecute and defend all suits and to execute all instruments necessary to effectuate any sale or lease of real or personal property, or any compromise. By section 26, he is empowered to appoint agents and assistants. By section 27, he is required to make and file inventories. Notice and proof of claims are regulated by section 28. Filing of lists of claims presented, including such as have been rejected, is required by section 29. Payment of compensation of agents, counsel and employees, and all expenses of liquidation out of the...
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