McCabe v. Guaranty Trust Co. of New York
| Decision Date | 31 May 1917 |
| Docket Number | 201. |
| Citation | 243 F. 845 |
| Parties | McCABE et al. v. GUARANTY TRUST CO. OF NEW YORK. |
| Court | U.S. Court of Appeals — Second Circuit |
Miller & Auchincloss, of New York City (David Hunter Miller and Frank L. Warrin, Jr., both of New York City, of counsel), for appellants.
Myers & Goldsmith, of New York City (Emanuel J. Myers and Gordon S P. Kleeberg, both of New York City, of counsel), for appellee.
The plaintiffs are citizens of the state of South Carolina, where they are engaged as partners in the cotton business. The plaintiff McCabe is the owner of a seat in the New York Cotton Exchange, which is a membership corporation organized and existing under the laws of the state of New York, and his membership therein is of considerable pecuniary value. The Guaranty Trust Company is a corporation organized and existing under the laws of the state of New York, and has its principal place of business in the Southern district of New York.
On June 14, 1916, the Guaranty Trust Company began an action in the Supreme Court of the State of New York in New York county against the plaintiffs, asking for judgment in the sum of $133,328.34, with interest. On the same day a warrant of attachment was issued against the defendants in the action and was levied by the sheriff upon certain of their property including the seat in the New York Cotton Exchange. The summons was never personally served upon defendants in the state action, but an order was made directing service of summons by publication.
The defendants in that action on August 21, 1916, appeared specially and filed a petition in the usual form for the removal of the action into the District Court of the United States for the Southern District of New York, alleging that the controversy in said action exceeded the sum of $3,000 and was wholly between citizens of different states. The usual bond was filed with the petition. On September 11, 1916, the defendants filed in the United States District Court for the Southern District of New York a duly certified copy of the entire record in the action.
Thereafter, and on the same day, September 11, 1916, they filed their bill of complaint herein, in which they prayed an injunction perpetually enjoining the Guaranty Trust Company from in any way proceeding in the action at law in the Supreme Court of New York in which it is plaintiff and the plaintiffs herein are defendants, which action it alleged had been duly removed into the United States District Court for the Southern District of New York. On September 12, 1916, Mr. Justice Mullan of the Supreme Court of New York granted the motion for the removal of the action to the District Court for the Southern District of New York.
On October 2, 1916, the District Judge filed an opinion in the action at law, in which he said that 'the real question here arises on the remand,' but 'I see no ground for remand, and the motion to remand is denied. ' He also declined in the ancillary suit to issue the preliminary injunction, on the ground that, as the New York court had granted the motion to remove, this swept 'away the whole ground on which the bill in equity rests. ' On October 6, 1916, a final decree was entered, dismissing the bill of complaint without prejudice. From that decree the plaintiffs appeal.
Before COXE, WARD, and ROGERS, Circuit Judges.
ROGERS Circuit Judge (after stating the facts as above).
This suit is ancillary in its nature, and is brought by two citizens of the state of South Carolina against a New York corporation residing in the Southern District of New York, and an injunction is asked to restrain the defendant from proceeding in an action which was commenced by it in the Supreme Court of New York county, and which is alleged to have been removed by the plaintiffs herein, being the defendants in the action removed. The District Judge has refused to remand the original action, and holds it to have been properly removed; and he has refused the injunction for reasons which will be referred to hereinafter.
The defendant in this suit in its answer denies that this court has the power or jurisdiction to entertain and take jurisdiction of the original action, and denies that that action is legally removed or can be removed. It also avers 'that this court is without power and jurisdiction to entertain and take jurisdiction of this action as ancillary to the aforesaid action, because this court could not take jurisdiction of and proceed with or take any steps in the original action in the state court if removed to this court, and would be required to remand such action or to dismiss the same from its further consideration.'
The question whether the action was properly removed from the state court was raised in the District Court on a motion to remand, and that court decided that the case was legally removed, and overruled the motion to remand. Whether the refusal to remand was error is not before this court in the present suit. The way to correct that error, if error was committed, is not by means of an averment in an answer filed in an ancillary suit. The Guaranty Trust Company denies that the original action was properly removed. In other words, it denies the jurisdiction of the District Court over a suit which is removed solely on the ground of diverse citizenship where the assignees do not all live in the same district. The question whether jurisdiction exists under such circumstances is a most important one, upon which, unfortunately, the judges in the Southern district hold contradictory views. In the original suit now under discussion the District Judge thought he had jurisdiction, and, as we have seen, refused to remand. In Doherty v. Smith (D.C.) 233 F. 132 (1915). Judge Learned Hand felt constrained to hold the reverse, not feeling himself sufficiently assured whether Ex parte Wisner, 203 U.S. 449, 27 Sup.Ct. 150, 51 L.Ed. 264, was intended to be overruled by the cases of In Matter of Tobin, 214 U.S. 506, 29 Sup.Ct. 702, 53 L.Ed. 1061 (1906), and of In the Matter of Athanasi Nicola, 218 U.S....
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