Manufacturers' Commercial Co. v. Brown Alaska Co.

• Decision Date: 08 August 1906
• Citation: 148 F. 308
• Parties: MANUFACTURERS' COMMERCIAL CO. v. BROWN ALASKA CO. et al.
• Court: U.S. District Court — Southern District of New York

148 F. 308

MANUFACTURERS' COMMERCIAL CO. v. BROWN ALASKA CO. et al.

United States Circuit Court, S.D. New York.

August 8, 1906

Elbridge L. Adams, for plaintiff.

Justus P. Sheffield, for defendants.

THOMAS District Judge.

On June 4, 1906, a warrant of attachment issued out of the Supreme Court, state of New York, which was on the same day levied upon the bank account of defendant Brown Alaska Company amounting to $6,454.88, and the bank account of defendant John A. Mead Manufacturing Company, amounting to $1,353.18 both with the People's Trust Company of Brooklyn. June 16, 1906, the Brown Alaska Company appeared generally by attorney, and thereupon removed in its own behalf the action to this court. Neither of the other defendants have been served with the summons, or appeared in such manner as to confer jurisdiction on this court or the Supreme Court. But the Mead Company now moves in this court to vacate the attachment and dismiss the action as to it, and the Alaska Smelting & Refining Company moves to dismiss the action as to it. At the same time the plaintiff moves to remand the action, upon the ground that it is not removable to this court.

The plaintiff and defendant Mead Manufacturing Company are citizens and residents of the state of New Jersey. The Brown Alaska Company and the Alaska Smelting & Refining Company are citizens and residents of the state of Washington. The complaint states causes of action on several promissory notes made by the defendant Alaska Smelting & Refining Company, to the order of the Brown Alaska Company, and indorsed by it and the Mead Manufacturing Company. Section 454 (amended 1877) of the Code of Civil Procedure of New York provides:

'Two or more persons, severally liable upon the same written instrument, including the parties to a bill of exchange or a promissory note, whether the action is brought upon the instrument, or by a party thereto to recover against other parties liable over to him, may, all or any of them, be included, as defendants in the same action, at the option of the plaintiff.'

Section 455 provides:

'The joinder of a person, as defendant in an action, with another person, as prescribed in the last section, does not affect his right to any order or other relief, to which he would have been entitled, if he had been separately sued in the action.'

Daniel on Negotiable Instruments (5th Ed.) Sec. 669, states:

'Nature of the contract of indorsement-- It is a separate and independent contract.-- The indorsement of a bill or note is not merely a transfer thereof, but it is a fresh and substantive contract, embodying all the terms of the instrument indorsed, in itself. The indorsement of a bill is equivalent to the drawing of a new bill by the drawer upon the drawee (or acceptor, if it be accepted) in favor of the indorsee; and the indorsement of a note is equivalent to the drawing of a bill upon the maker, who stands in the relation of acceptor, as it were, in favor of the indorsee. So entirely distinct and independent is the contract of the indorser of a note from that of the maker that at common law a separate action against each was indispensable.' The contract of the maker of the notes involved herein, and his liability thereon, is quite independent of the several contracts of the indorsers, and the contracts and liability of the indorsers are alike distinct one from the other; but it is the policy of the state of New York to permit the holder to avoid a multiplicity of actions by joining causes of action of such a nature in a single action. There is no joint cause of action against two or more of the parties as regards any contract existing by reason of the note or the endorsements thereon. Causes of action and parties severally liable thereon are joined, but the liability is, as regards the basis thereof, separate. The holder does not charge joint, or joint and several, liability, but distinct liability on entirely separate contracts. The cause of action does not become joint, or joint and several, from the mere fact that the plaintiff elects to avail itself of the statutory permission and unite parties in the same action. The plaintiff cannot by such procedure make joint, or joint and several, what is necessarily several in its essential nature; nor can the plaintiff, by availing itself of the statutory provision, estop any defendant, liable solely upon its independent contract, from removing the action as regards such defendant to the federal court, if the other conditions precedent to such removal be present. The rule is stated in Hyde v. Ruble, 104 U.S. 407, 26 L.Ed. 823, Ayres v. Wiswall, 112 U.S. 187, 5 Sup.Ct. 90, 28 L.Ed. 693, and Louisville & Nashville R. Co. v. Ide, 114 U.S. 52, 5 Sup.Ct. 735, 29 L.Ed. 63. It appears from these cases, as well as from Starin v. New York, 115 U.S. 248, 6 Sup.Ct. 28, 29 L.Ed. 388, and Little v. Giles, 118 U.S. 596, 7 Sup.Ct. 32, 30 L.Ed. 269, that the question whether there is joint liability is not determined by the separate defense of a defendant denying joint liability. The fact that the Mead Company is a citizen and resident of New Jersey, of which state the plaintiff is also a citizen and resident, does not preclude the Brown Alaska Company from removing the action for the ascertainment of its liability, separate and distinct. The action is severable. Geer v. Mathieson Alkali Works, 190 U.S. 428, 23 Sup.Ct. 807, 47 L.Ed. 1122; Connell v. Smiley, 156 U.S. 335, 15 Sup.Ct. 353, 39 L.Ed. 443; Barney v. Latham, 103 U.S. 205, 26 L.Ed. 514; Fergason v. Chicago, M. & St. Paul Ry. Co. (C.C.) 63 F. 177; Warax v. Cincinnati, N.O. & T.P. Ry. Co. (C.C.) 72 F. 637; Sugar Creek, etc., Co. v. McKell (C.C.) 75 F. 34; Hartshorn v. Atchison Ry. Co. (C.C.) 77 F. 9; Carothers v. McKinley Mining & Smelting Co. (C.C.) 116 F. 947; Helms v. Northern P. Ry. Co. (C.C.) 120 F. 389; Harley v. Home Insurance Co. (C.C.) 125 F. 792; Henry v. Illinois Central Ry. Co. (C.C.) 132 F. 715; Cella et al. v. Brown et al. (C.C.) 136 F. 439; New England Waterworks Co. v. Farmer's Loan & Trust Co., 136 F. 521, 69 C.C.A. 297.

Some of the above cases involve the removal of the whole controversy to the federal court, while others relate to actions that are severable and removable as regards the liability of the removing defendant. This phase of the subject will be noticed later in reference to the motions of the defendants, not joining in the removal, to dismiss the action as to them and to vacate the attachment against the property of the Mead Company. Before considering that question the motion to remand upon the ground that neither the plaintiff nor the Brown Company is a resident of the Southern District of New York demands attention. The joinder of the other defendants does not affect this inquiry. The present question relates solely to the Brown Company. In Iowa Lillooet Gold Mining Company v. Bliss et al. (C.C.) 144 F. 446, the rule and grounds therefor adopted in many cases are well expressed by Judge Reed (144 F. 448) as follows:

'The motion to remand challenges the jurisdiction of this court, and in support thereof it is urged that, plaintiff being a corporation of Canada and defendant a corporation of Maryland, neither being a citizen or resident of Iowa, the action could not have been brought by original process in this court, and is not, therefore, one that is removable from the state court. This contention fails to distinguish between the jurisdiction or right of a court to determine a controversy and the venue or place where that jurisdiction may be exercised. The first part of section 1 of the judiciary act of 1887-88 (Act March 3, 1887, c. 373, 24 Stat. 552 (U.S. Comp. St. 1901, p. 508)) confers jurisdiction upon the Circuit Courts of the United States, concurrent with the courts of the several states, of all suits of a civil nature at law or in equity, wherein the requisite amount is involved, and in which there shall be a controversy between (3) citizens of different states, and (5) citizens of a state and foreign states, citizens, or subjects. The second part of that section provides that no civil suit shall be brought against any person in a Circuit Court of the United States by original process in any other district than that whereof he is an inhabitant; but, 'when the jurisdiction is founded only upon the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or the defendant.' This suit is not of the class there described, for plaintiff is a corporation of Canada, defendant Bliss a citizen and resident of the Northern District of Iowa, and the Guaranty Company a corporation of Maryland. If it is one of which this court has jurisdiction, it might therefore have been brought in this court by

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