Price & Hart v. T.J. Ellis & Co.

• Citation: 129 F. 482
• Decision Date: 11 April 1904
• Docket Number: 5,265.
• Parties: PRICE & HART v. T. J. ELLIS & CO.
• Court: U.S. District Court — Eastern District of Arkansas

129 F. 482

PRICE & HART v. T. J. ELLIS & CO.

No. 5,265.

United States Circuit Court, E.D. Arkansas, Western Division.

April 11, 1904

N.W. Norton Baldy Vinson, and Metcalf & Metcalf, for plaintiff.

Wells Williamson & Cotham and W. S. & F. L. McCain, for defendants.

TRIEBER District Judge.

The only question involved in this motion to remand is whether the plaintiff, who is a nonresident of the state, and who has instituted an action at law in the state court against a resident of this state to recover a sum of money not exceeding $2,000, can remove the cause to a national court when the defendant filed with his answer denying the plaintiff's demand a counterclaim by which he seeks to recover from the plaintiff a judgment for more than $2,000 exclusive of interest and costs. The question has never been authoritatively settled by the decision of any court whose judgment is conclusive on this court. Neither the Supreme Court nor the Circuit Court of Appeals for this (the eighth) circuit has ever passed upon it directly, nor has any other federal appellate court ever determined that question, except the Circuit Court of Appeals for the Fifth Circuit, in Waco Hardware Co. v. Michigan Stove Co., 91 F. 289 33 C.C.A. 511. West v. Aurora City, 6 Wall. 139, 18 L.Ed. 819, has been frequently cited by some of the courts as a case in point, but that case is inapplicable to the acts of Congress now in force, as the removal in that case was sought to be made under the provisions of the judiciary act of 1789 (1 Stat. 79), digested as the first subdivision of section 629, Rev.St.U.S., which has been repealed or superseded by the act of March 3, 1875 (18 Stat. 470), and the act of March 3, 1887, as corrected by the act of August 13, 1888 (25 Stat. 433; U.S. Comp.St. 1901, p. 509). The act of 1789, construed by the court in West v. Aurora City, limited the right of removal to a defendant who had not submitted himself to the jurisdiction of the state court, except to enter his appearance for the purpose of removing the case. The chief justice, who in that case, said:

'And it (the right to remove) is given only to a defendant who promptly avails himself of the right at the time of appearance by declining to plead and filing his petition for removals.'

Waco Hardware Co. v. Michigan Stove Co., supra, while no doubt a binding authority on the Circuit Courts of the United States held within the Fifth Circuit, has no such effect on this court, although entitled to the highest consideration. The decision of that case is based solely on what was decided in West v. Aurora City, and, as that case construed an act of Congress different from those now in force, it has no application to causes arising under the present acts. The acts of Congress now in force regulating the removal of causes from a state to a national court contain no such restrictions as did the act of 1789. A defendant now may plead or answer in the state court, and still remove the cause, if the facts otherwise authorize a removal, provided he files his petition and bond for removal at or before the time he is, by the laws of the state or the rules of the court in which the action is pending, required to plead. Brisenden v. Chamberlain (C.C.) 53 F. 307; Champlain Constr. Co. v. O'Brien (C.C.) 104 F. 930; Sidway v. Missouri, etc., Co. (C.C.) 116 F. 381.

The decisions of the Circuit Courts of the United States on this question are quite numerous, but unfortunately so conflicting that the only aid they afford is the reasoning of the different judges who decided them. In this the Eighth Circuit we find four cases reported in which this question was in some shape before the Circuit Courts for determination. Carson & Rand Lumber Co. v. Holtzclaw (C.C.) 39 F. 578, decided by Judge Thayer; Bennett v. Devine (C.C.) 45 F. 705, decided by Judge Shiras; Lee v. Continental Ins.Co. (C.C.) 74 F. 424, decided by Judge Adams; and McKown v. Kansas & T. Coal Co. (C.C.) 105 F. 657, decided by Judge Rogers. A careful examination of these cases shows that the only one in which the facts were identical with those in the case at bar is Carson & Rand Lumber Co. v. Holtzclaw, and there Judge Thayer held that the cause was removable under the acts of Congress now in force. In Lee v. Continental Ins. Co., the statutes of Utah, in a court of which state the action was pending, made it obligatory on the defendant to set up his counterclaim in the same action, or be forever afterward prohibited from maintaining an action against the plaintiff therefor. But the learned judge, in delivering his opinion, took occasion to express his views on this subject regardless of the Utah statute, and reached the same conclusion as that expressed by Judge Thayer in Carson & Rand Lumber Co. v. Holtzclaw, supra. Judge Adams thus states his conclusions:

'There is a contradiction of opinion, independent of such legislation as is found in the statute of Utah, with respect to the question whether the amount involved in an asserted counterclaim against a cause of action shall or may be considered in determining the jurisdiction of federal courts. Opinions of very eminent judges and courts are found on either side of the question, and as a new question it would be somewhat difficult to determine it, based simply on the decided cases. However, my inclination is to adopt the conclusion that the amount involved in a counterclaim is a part of the subject-matter in dispute, within the meaning of the act of Congress, conferring jurisdiction upon the federal court; and that inclination is strongly fortified in the case at bar by the terms of the Utah statute.'

In Bennett v. Devine, decided by Judge Shiras, the cause was sought to be removed by the original defendant, who was sued for $1,950 only, but filed a counterclaim to recover $3,000, and it was held that it could not be removed upon the ground, as stated by the learned judge, that:

'So far as the counterclaim is concerned, the party seeking the removal is the plaintiff therein, and the right of removal does not exist in favor of a plaintiff, or a party who has voluntarily invoked the jurisdiction of the state court.'

In this case the removal was made by the original plaintiff, who became the defendant in the counterclaim.

In McKown v. Kansas & T. Coal Co., decided by Judge Rogers, the facts were like those in Bennett v. Devine. The removal was sought to be made by the original defendant, who became the plaintiff in a counterclaim, and, the right to remove being limited to the defendant, the cause was properly remanded.

That the defendant who files a counterclaim becomes, as to the counterclaim, a plaintiff, under the statute of Arkansas, and the original plaintiff becomes the defendant, has been fully determined by the court of last resort of that state in Heer Dry Goods Co. v. Shaffer, 51 Ark.

368, 11 S.W. 517. In that case an action at law had been instituted by the plaintiff to recover a sum of money from the defendant. The defendant, with his answer, denying the indebtedness alleged in the complaint, pleaded a set-off and counterclaim, the correctness of which was verified by the oath of the defendant. The plaintiff filed no reply to this set-off, but dismissed his original action. The defendant thereupon demanded judgment on his counterclaim, which was granted by the court...