Mutual Life Ins. Co. of New York v. Marsh

• Decision Date: 07 March 1932
• Docket Number: No. 177.,177.
• Citation: 47 S.W.2d 585
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. MARSH.
• Court: Arkansas Supreme Court

47 S.W.2d 585

MUTUAL LIFE INS. CO. OF NEW YORK v. MARSH.

No. 177.

Supreme Court of Arkansas.

March 7, 1932.

Rehearing Denied April 11, 1932.

Appeal from Circuit Court, Nevada County; Dexter Bush, Judge.

Action by Clarence Marsh against the Mutual Life Insurance Company of New York. From a judgment for plaintiff, defendant appeals.

Reversed and remanded, with directions.

Frederick L. Allen, of New York City, and Rose, Hemingway, Cantrell & Loughborough, of Little Rock, for appellant.

Martin & Martin, of Little Rock, for appellee.

MEHAFFY, J.

The appellee brought suit on an insurance policy for $3,000 and 12 per cent. penalty and attorney's fees.

The appellant is a citizen of the state of New York, and the appellee is a citizen of the state of Arkansas. The appellant filed its petition for removal to the federal court, alleging diversity of citizenship, and that the amount in controversy exceeds the sum of $3,000.

The appellant filed a bond and prayed that the court proceed no further, and that the cause be removed to the United States District Court.

The circuit court denied the petition and appellant filed answer, the case proceeded to trial, and there was a judgment for $3,000 and $360 penalty, and a $500 attorney's fee. Motion for a new trial was filed and overruled, and an appeal granted to the Supreme Court.

The only question we find it necessary to determine is whether the cause was removable to the federal court. The federal statute provides: "Any suit of a civil nature, at law or in equity, arising under the Constitution or laws of the United States, or treaties made * * * under their authority, of which the district courts of the United States are given original jurisdiction, in any State court, may be removed by the defendant or defendants therein to the district court of the United States for the proper district.

"Any other suit of a civil nature, at law or in equity, of which the district courts of the United States are given jurisdiction, in any State court, may be removed into the district court of the United States for the proper district by the defendant or defendants therein, being nonresidents of that State." Title 28, § 71, U. S. Code, Annotated.

It is also provided by the federal statute: "The district courts shall have original jurisdiction as follows: (1) * * * Of all suits of a civil nature, at common law or in equity * * * where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and * * * is between citizens of a State and foreign States, citizens, or subjects." Title 28, § 41, U. S. Code, Annotated.

The diversity of citizenship is not disputed, but appellee contends that the cause was not removable because, he says, that under the decisions of the federal court, section 6155 of C. & M. Digest is unconstitutional. The contention is that, while this court has held the statute valid, the federal court has held that it is void.

If this section is valid, it necessarily follows that the amount in controversy exceeds $3,000, exclusive of interest and costs. He sues for $3,000 and 12 per cent. damages and attorney's fees. Section 6155, supra, provides that the attorney's fees shall be taxed as costs, but it does not provide that the 12 per cent. penalty shall be taxed as costs. Therefore the amount in controversy was $3,360.

Appellee calls attention to Standard Accident Ins. Co. v. Rossi (C. C. A.) 35 F.(2d) 667, 672. That case does not hold that the Arkansas statute for penalty and attorney's fees is invalid, but the court said in that case: "In view of the fact that the case must be tried again, we think some remarks upon the imposition of penalties and attorney's fees, under section 6155, supra, of the Arkansas Digest, are pertinent. It is true that the language of the statute, strictly construed, imposes these penalties in all cases where the company fails to pay within the time specified in the policy, after demand made therefor. However, the rigor of this language has...