Rosecrans v. William S. Lozier, Inc.

• Decision Date: 02 May 1944
• Docket Number: No. 12798.,12798.
• Citation: 142 F.2d 118
• Parties: ROSECRANS et al. v. WILLIAM S. LOZIER, Inc., et al.
• Court: U.S. Court of Appeals — Eighth Circuit

142 F.2d 118 (1944)

ROSECRANS et al. v. WILLIAM S. LOZIER, Inc., et al.

No. 12798.

Circuit Court of Appeals, Eighth Circuit.

May 2, 1944.

COPYRIGHT MATERIAL OMITTED

Clarence C. Chilcott, of Kansas City, Mo. (Marion D. Waltner, of Kansas City, Mo., on the brief), for appellants.

William E. Kemp, of Kansas City, Mo. (Col. Frank E. Shaw, of Omaha, Neb., Bert E. Church and Roger C. Slaughter, both of Kansas City, Mo., and Howard T. Fleeson, both of Wichita, Kan., on the brief), for appellees.

Before GARDNER, WOODROUGH, and JOHNSEN, Circuit Judges.

GARDNER, Circuit Judge.

This is an appeal by the plaintiff E. S. Rosecrans from a judgment which dismissed his action with prejudice for want of prosecution after denial of a motion to remand the case to the state court from which it had been removed. Marion D. Waltner and Clarence C. Chilcott are joined as appellants because they were attorneys for plaintiff below and were included in an injunction order preventing plaintiff and his attorneys from further prosecuting the action in the state court, the injunction order being also included in the appeal. As the basic controversy concerns only plaintiff and defendants, the other appellants may be disregarded.

The original petition as filed in the state court alleges that plaintiff E. S. Rosecrans is a citizen and resident of New York; that defendant William A. Lozier, Inc., is a New York corporation, and that defendants William S. Broderick and David G. Gordon are citizens and residents of Colorado, and that defendants operate under the style and firm name of William S. Lozier, Inc.-Broderick & Gordon; that on or about October 1, 1942, J. D. Winder entered into an oral contract with defendants for the operating and managing of a cafeteria commissary, recreation building, bath houses and other conveniences in what is known as Trailer Town, and for furnishing in connection therewith all counters, shelving, furniture, cook stoves, refrigerators, sinks and all necessary kitchen and dining room equipment, besides certain sanitary equipment for Trailer Town, near De Soto, Kansas, for use of the workers employed at the Sunflower Ordnance Works. Winder agreed, it is alleged, to carry a full line of meats, groceries, dairy products and other merchandise and to sell the same at prices not exceeding 25% above the cost of delivery at Trailer Town; to set up facilities for handling ordinary mail of patrons, including sale of stamps, and to transport incoming mail to Trailer Town at least once a week, and to supervise the recreational activities of Trailer Town, including a nursery for the children of the occupants.

Defendants on their part agreed to furnish Winder with a combination residence and office building, with heat, light, and sanitary fixtures completely installed, all electrical energy, water for all purposes, and to maintain roads, walks, drainage systems and utility lines, police and fire protection. A schedule of payments for the use of trailers is set out in the petition, and plaintiff alleges that Winder had performed all conditions of the contract on his part to be performed except as prevented by defendants, and that he had been damaged by reason of the breach of said contract in the sum of $50,000, and that this claim for damages had been assigned to the plaintiff. In a second count plaintiff alleges that there was furnished by Winder fuel, labor and supervision for heating a school house in Trailer Town, for which defendants became obligated to pay $500.

Defendants filed in the Circuit Court of Jackson County, Missouri, where the action was brought, a petition for removal to the United States District Court for the Western District of Missouri. The grounds for removal alleged in the petition are: (1) J. D. Winder is the true party in interest and as between him and the defendants diversity of citizenship exists; (2) there was never an oral contract between Winder and defendants, the only contract being a written one in which the United States of America is an interested party and the real party in interest, as the contract relating to the trailer camp to be located on United States property "was subject to the approval, confirmation and control of the United States of America, acting by and through its authorized representative, the Contracting Officer of the Corps of United States Engineers;" (3) the written contract provides that plaintiff's alleged assignor shall be without power to assign the contract except with the written consent of defendants and the United States acting through the contracting officer, and the purported assignment to plaintiff of an oral contract is alleged in plaintiff's petition for the fraudulent purpose of preventing removal to the United States District Court, and that Winder, who is a resident of Arkansas, is a necessary and indispensable party and had he sued there would have been complete diversity of citizenship.

Following removal to the District Court plaintiff filed a motion to remand. Evidence was taken and the District Court by order denied the petition to remand. Later, before another District Judge, upon plaintiff's refusal to proceed further in the Federal Court a judgment was entered "that this cause be and the same is hereby dismissed with prejudice."

The contentions on this appeal are that the court erred in denying plaintiff's motion to remand because the action in fact did not arise under the Constitution or laws of the United States; that the assignment of the claim for damages was valid, and hence, jurisdiction could not be predicated upon diversity of citizenship.

Suits of a civil nature may be removed from the state court to a United States court if arising under the Constitution or laws of the United States. Judicial Code, Sec. 28, Title 28 U.S.C.A. § 71. This right of removal is not dependent upon diversity of citizenship between the parties. Cummings v. Chicago, 188 U.S. 410, 23 S.Ct. 472, 47 L.Ed. 525. Ordinarily the presence of a federal question which will authorize removal of the suit to a United States court must be disclosed by plaintiff's petition or complaint, unaided by defendant's answer or defenses, or indeed by plaintiff's reply to the defenses pleaded by defendant. Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70; Great Northern R. Co. v. Galbreath Cattle Co., 271 U.S. 99, 46 S.Ct. 439, 70 L. Ed. 854; Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 258 U.S. 377, 42 S.Ct. 349, 66 L.Ed. 671. It is therefore of controlling importance to consider the allegations of plaintiff's petition.

If the claim disclosed by plaintiff's pleading presents a controversy which depends for its solution upon the construction of a federal statute or the federal Constitution, or directly involves some right or immunity created or protected by the Constitution, then it was removable to the Federal court. It is not always easy to determine when a suit may be said to arise under the Constitution or laws of the United States. Some tests, however, seem to be well recognized. To bring a case within the removal statute, a right or immunity created by the Constitution or laws of the United States must be the essential element of plaintiff's cause of action. Gully v. First National Bank, supra. It is not sufficient to warrant removal that in the progress of the trial it may be necessary to give a construction to the Constitution or laws of the United States, but the case must substantially involve a dispute or controversy as to the effect or construction of the Constitution, laws or treaties of the United States, upon the determination of which the result depends. The controversy must be genuine and present as distinguished from a possible or conjectural one. With these rules in mind we turn to a consideration of the cause of action pleaded in plaintiff's petition.

We may note the background. Defendants before entering into any contract with Winder, had entered into a cost-plus-a-fixed-fee contract with the United States government for the design and construction of an ordnance plant known in the record as the Sunflower Ordnance Works, near De Soto, Kansas. This was authorized by Title 2 of the First War Powers Act of December 18, 1941, Title 50 U.S.C.A. Appendix, § 611, and by Executive Order No. 9001, dated December 27, 1941, 50 U.S.C.A. Appendix, § 611 note. Construction of the camp was on property owned by the United States and the construction was under direction of an army officer acting for the government. The ordnance plant is devoted to the manufacture of munitions for use in the war effort. Defendants contend that the oral contract described in the petition provided in effect that defendants, by agreeing to furnish Winder certain services and appointments, were in fact acting as agents of the United States. The contract of defendants with the government, we think, made them independent contractors rather than government agents. Pickering Land & Timber Co. v. Wisby, D.C.La., 242 F. 993. But even if they were agents of the United States that would not ipso facto make the case removable. The right of removal is purely statutory and the statute contains no provision permitting an agent or delegate of the United States to remove an action in which it is sought to hold him personally liable for any act or transaction arising out of the agency. If the agent so sued can show that he was not acting for himself and did not bind himself personally, but bound only a principal, that would, of course, be a legal defense to the action. Ingram Day Lbr. Co. v. United States Shipbuilding Fleet Corp., D.C.Miss., 267 F. 283. Defendants here stress the agreement as pleaded which obligated them to furnish fire and police protection. They urge that they could not furnish such service as private contractors but only as representatives of some governmental authority. Even if this were true, it would not necessarily mean that they represented the United...