The Boatmen's Bank v. Fritzlen

• Decision Date: 06 April 1907
• Docket Number: 14,884
• Citation: 89 P. 915,75 Kan. 479
• Parties: THE BOATMEN'S BANK v. D. G. FRITZLEN et al. [*]
• Court: Kansas Supreme Court

89 P. 915

75 Kan. 479

THE BOATMEN'S BANK v. D. G. FRITZLEN et al. ^[*]

No. 14,884

Supreme Court of Kansas

April 6, 1907

Decided January, 1907.

Error from Clark district court; EDWARD H. MADISON, judge.

STATEMENT.

ON July 23, 1903, W. H. Weldon instituted a suit in the district court of Clark county, Kansas, asking for judgment for $ 3750 against D. G. Fritzlen and Edna P. Fritzlen upon a promissory note executed July 2, 1903, due ten days after date, and to foreclose mortgages on real and personal property of the Fritzlens. The Boatmen's Bank of St. Louis, Missouri, was named as a defendant, and it was alleged that the bank claimed some interest in the mortgaged property under mortgages held by it, but that these were illegal and of no effect. On August 13, 1903, the bank filed its petition and bond for removal to the United States circuit court for the district of Kansas, in which it alleged that it was a citizen of Missouri, and that Weldon and the Fritzlens were citizens of Kansas; and it stated as a first ground of removal that there was a separable controversy between Weldon and the bank, and as a second ground that the bank could not obtain justice in that court because of prejudice and local influence. The controversy reached the federal court on September 14, 1903, when the motions of Weldon and the Fritzlens to remand were considered and denied. On October 9 1903, the bank brought a replevin action in the federal court to recover the personal property of the Fritzlens covered by the bank's mortgages. On April 2, 1904, the motions to remand were renewed, and later an order was made allowing the motions and remanding the cause to the state court. (Weldon v. Fritzlen, 128 F. 608.) On April 25, 1904, the motion of the Fritzlens to dismiss the replevin action was allowed by the federal court, but that judgment was subsequently reversed by the United States circuit court of appeals. ( Boatmen's Bank v. Fritzlen, 135 F. 650, 68 C. C. A. 288.)

On May 14, 1904, the bank filed an answer which, in effect, denied the allegations of Weldon's petition, but asked for no affirmative relief. On May 26, 1904, Weldon filed a reply to the bank's answer, and on the same day D. G. Fritzlen filed an answer in the case, which admitted the execution of the Weldon note and mortgages, but denied that he was indebted to the plaintiff in the amount claimed. He then set up as a first defense against the bank's note and mortgages that illegal commissions for the sale of cattle were included in the note and that they were therefore void. A second defense was that the bank was a foreign corporation and that it had not been authorized to do business in Kansas. As a third defense he set up a counterclaim for $ 20,000 as damages for the breach of a contract, and as a fourth defense set up a counter-claim for $ 25,000 for the conversion of the personal property which the bank had taken under a writ of replevin. The first and second defenses of Fritzlen's answer against the bank were identical with the defenses set forth in Weldon's reply to the bank's answer. On June 10, 1904, the bank filed its second petition and bond for removal, alleging, first, that there was a separable controversy, and second, that the suit was fraudulently brought by Weldon and Fritzlen to prevent a removal of the cause to the federal court and to defeat the jurisdiction of the federal court over the real controversy between the bank and the Fritzlens. On this ground the bank alleged:

"This defendant, Boatmen's Bank, further shows and avers that this defendant had no knowledge either by its officers or attorneys of the filing of said separate answer of defendant D. G. Fritzlen and said reply of plaintiff of May 26, 1904 until Saturday, June 4, 1904, on which last day the attorneys of said bank were furnished with copies of said answer and reply by the clerk of the district court, and that the time within which this defendant, Boatmen's Bank, is required to plead or answer to said separate answer has not yet expired according to the statutes or the rules of practice of the state of Kansas, and that neither said Boatmen's Bank nor its attorneys herein have been served with said separate answer of defendant D. G. Fritzlen, or required by an order of court to plead, answer or demur to said separate answer and that said separate answer is in all that is contained therein, after paragraph one, a new suit on the part of D. G. Fritzlen against this defendant, Boatmen's Bank.

"Said defendant, Boatmen's Bank, further avers and shows to the court that this suit in its inception and in the conducting thereof was and has been fraudulently instituted and maintained by plaintiff, Weldon, and defendants Fritzlen for the purpose of fraudulently preventing this defendant, Boatmen's Bank, from removing this action to the United States circuit court, as prayed for in this petition; that said Boatmen's Bank has no interest whatever in the mortgages and note held by plaintiff and made to him by defendant Fritzlen and mentioned in plaintiff's petition in this cause, and that, as appears from said separate answer of defendant D. G. Fritzlen, there was and has been and is now no controversy between plaintiff and defendant Fritzlen as to the said mortgages and note of plaintiff and the foreclosure thereof, and said defendant Boatmen's Bank further charges and avers that this suit was brought in the manner and form of the bringing of the same not for the purpose of adjudicating or settling any controversy between plaintiff, Weldon, and the defendants Fritzlen, but for the purpose, fraudulently, of enabling the defendants Fritzlen to maintain their said suit set up in their said separate answer herein against this defendant, Boatmen's Bank, and to litigate the same in the state court, and to prevent the trial of said controversy between said Fritzlens and this defendant, Boatmen's Bank, in the United States circuit court.

"The defendant Boatmen's Bank further avers and states that the defendants Fritzlen herein were and have been in default from the time of the institution of this suit until the filing of said separate answer herein, and that by agreement between plaintiff and defendants Fritzlen the said separate answer of D. G. Fritzlen was withheld and not filed until after the remanding of this cause on the first petition filed by this petitioner, so as to prevent it being made to appear while this action was pending on said former petition in the United States court that this suit was maintained for the fraudulent purposes aforesaid, and that the controversies herein were wholly between citizens of different states."

The petition for removal was denied, and the trial which followed in the district court resulted in favor of Weldon and the Fritzlens. The bank complains.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. REMOVAL OF CAUSES--Diverse Citizenship--Fraudulent Joinder of Parties. The institution of a fictitious action in a court of the state of which the plaintiff is a citizen, for the purpose of bringing two defendants of diverse citizenship--one being a non-resident--into such court, to enable the resident defendant to litigate a cause of action against the non-resident defendant in that court, and to prevent the non-resident defendant from removing such cause to the federal court, is a fraud upon the jurisdiction of the federal court and upon the non-resident defendant, and upon a seasonable application by the non-resident defendant the sham plaintiff should be disregarded and the real controversy removed to the federal court.

2. REMOVAL OF CAUSES--Question to be Decided by State Court on a Petition for Removal. The averments of fraud as well as all issues of fact raised by the petition for removal are to be tried in the federal court. The only question for a state court to decide is one of law: whether, admitting the facts alleged in the petition and disclosed by the record to be true, the cause is a removable one.

3. REMOVAL OF CAUSES--Time of Filing Petition. A petition for removal is filed in time if it is filed by the defendant as soon as the record in the cause or the acts of the parties show it to be a removable cause.

4. REMOVAL OF CAUSES--Fraudulent Attempt to Prevent Removal--Estoppel. The time within which a cause may be removed, being a requirement of mode and form and not of jurisdiction, is a subject of waiver and estoppel, and a party who fraudulently attempts to prevent a removal, whereby the defendant fails to file his petition for removal within the statutory time, will not be allowed to take advantage of his own wrong, but will be estopped to object that the petition for removal was not filed in time.

5. REMOVAL OF CAUSES--Improper Joinder of Parties--Real Parties Citizens of Different States. In considering a petition for removal a court should disregard an improper or sham party who has injected a fictitious cause of action into the case and may arrange the actual parties on opposite sides of the real controversy according to their respective interests, and if there then appears to be a controversy between citizens of different states, involving the requisite amount, the cause may be removed.

Botsford, Deatherage & Young, for plaintiff in error.

H. J. Bone, and D. R. Hite, for defendant in error D. G. Fritzlen, and Francis C. Price, for defendant in error W. H. Weldon.

OPINION

JOHNSTON, C. J.:

Many errors are assigned on the rulings made in the various stages of the trial, but the first and controlling one is based on the decision denying the petition for removal to the federal court. There was a remand on the first petition for removal and under the act of congress the decision on that motion is not reviewable. (25 U.S. Stat. at L....