Thouron v. East Tennessee V. & G. Ry. Co.

• Decision Date: 27 April 1889
• Citation: 38 F. 673
• Parties: THOURON et al. v. EAST TENNESSEE, V. & G. RY. CO. et al.
• Court: U.S. District Court — Eastern District of Tennessee

38 F. 673

THOURON et al. v. EAST TENNESSEE, V. & G. RY. CO. et al.

United States Circuit Court, E.D. Tennessee.

April 27, 1889

Ingersoll & Peyton, Charles M. Da Costa, and Samuel Dickson, for the motion.

Pope Barrow, opposed.

JACKSON J.

In October, 1888, the complainants, Nicholas Thouron, William J Barr, and Edmund Allen, being then and now citizens of the state of Pennsylvania, in connection with C. Sligo de Pothonier and Frederick J. Burt, then and now aliens and subjects of Great Britain, on behalf of themselves and all other stockholders of the East Tennessee, Virginia & Georgia Railway Company similarly situated who might choose to come in and share in the benefit and expense of the litigation filed their bill in the chancery court of Knox county, Tenn at Knoxville against the East Tennessee, Virginia & Georgia Railway Company, a corporation of Tennessee, the Richmond & Danville Railroad Company, and the Richmond & West Point Terminal Railway & Warehouse Company, both corporations of the state of Virginia, and against the directors of the three said corporations, said directors being then and now citizens of the state of New York, Virginia, and Tennessee, for the purpose of enjoining and restraining the East Tennessee, Virginia & Georgia Railway Company from ratifying and approving a certain contemplated lease of its road and property to the Richmond & Danville Railroad Company, as the directory of said companies had agreed upon, or or about the 17th October, 1888, on the ground that said lease was ultra vires, was in violation of law, and was an abuse of the powers of said directors, etc., and seeking to compel the Richmond & Danville Railroad Company to restore to the possession of the East Tennessee, Virginia & Georgia Railway Company the road and property which the latter had already turned over to the former under and in pursuance of said lease agreement made by the directory alone of the two companies; and also seeking to prevent the West Point Terminal Company from voting the shares of stock of the East Tennessee, Virginia & Georgia Railway Company held and owned by it in favor of said lease at the meeting of the stockholders of the latter company, called to meet in December, 1888, for the purpose of ratifying and confirming said lease. The grounds on which the complainants, as stockholders in the East Tennessee, Virginia & Georgia Railway Company, predicated their right to the relief sought, need not be especially noticed. The defendant corporations were brought regularly before the court either by service of process or by voluntary appearance, and thereafter, on motion of the complainants, the chancellor granted the preliminary injunction prayed for, and further ordered and directed the Richmond & Danville Railroad Company to restore to the East Tennessee, Virginia & Georgia Railway Company the possession and control of the latter's road and property which had been turned over to it as lessee, so as to place the companies in statu quo pending the litigation. This was done in compliance with the order of the chancellor, and the cause then proceeded in the state chancery court, (the several steps taken not being material to the present question,) until December 1, 1888, when one A. G. Sharp, a citizen of Tennessee, and the alleged holder and owner of 50 shares of the common stock of the East Tennessee, Virginia & Georgia Railway Company, presented his petition to said chancery court, asking to be made a party co-complainant in said suit, and offering to bear his proportion of the expenses thereof, to the end that he might share the benefit sought or secured thereby. By an order of the court entered on the same day and date, said Sharp was made a party co-complainant in the cause. Thereafter the Richmond & Danville Railroad Company filed its answer to the bill, said answer, by agreement of parties, and by order of the court, being filed as of the date December 29, 1888. The other defendant corporations had previously filed their answers. The cause being then at issue as between the complainants, including said Sharp and the defendant corporations the Richmond & Danville Railroad Company on the 25th January, 1889, before any final hearing or trial had been had in the state court, presented its petition, supported by the affidavit of its proper officer, to the circuit court of the United States for the district of East Tennessee, asking to have said suit removed to said circuit court on account of prejudice and local influence which would prevent petitioners from obtaining justice in said chancery court of Knox county, or in any other state court of Tennessee to which petitioners might, under the laws of said state, have the right, because of such prejudice or local influence, to remove said cause. The petition set out that the petitioner was a corporation organized under and by virtue of the laws of the state of Virginia, and was a citizen of said state; that said A. G. Sharp was, at the commencement of said suit in the state chancery court, and still is, a citizen of the state of Tennessee; that in said chancery suit there was a controversy between the petitioner and said Sharp; that the amount involved in said controversy exceeded the sum of $2,000, exclusive of interest; that because of prejudice and local influence petitioner could not obtain justice in said state court, etc.; and praying that said cause might be removed into the said circuit court of said district. the existence of the prejudice and local influence were positively averred in the petition and as positively sworn to, in the very language of the act of 1887. Upon the presentation of said petition thus verified the circuit court allowed the same to be filed, and required petitioner to enter into bond for costs as provided by law, and, upon its so doing, passed and entered the following order, under date of January 28, 1889:

'It appearing to the court from the petition filed in this cause and the affidavit thereto attached, that from prejudice or local influence petitioner, the Richmond and Danville Railroad Company, will not be able to obtain justice in the chancery court of Knox county, Tenn., or in any other state court to which petitioner as defendant may or could under the laws of the state of Tennessee have the right, on account of such prejudice or local influence, to remove this cause, and that it is therefore entitled to have the removal which it seeks, it is accordingly ordered that this cause be, and the same is hereby, removed from the said chancery court of Knox county to this court, and that notice of this order be served upon said chancery court of Knox county, Tenn., and that said court and the clerk thereof be and is requested to furnish upon application of petitioner and the payment of the lawful fees therefor, a copy of the record on file in said court in this cause, to be filed in this court.'

This order was courteously recognized and acceded to by the presiding judge of the state court; a transcript of the record was promptly furnished petitioner, and by it filed in this court. Thereupon the complainants other than said A. G. Sharp filed their petition and motion to remand said cause to the state court, assigning in support of their motion various grounds, which it is not deemed necessary to notice and consider separately and in detail. They involve and present the general question whether the cause, as disclosed by the record now produced, and the situation of the parties to the suit, was either removable or properly removed to this court. On behalf of the Richmond & Danville Railroad Company it is claimed that the removal is warranted by the last clause of the second section of the act of March 3, 1887, which provides as follows:

'And where a suit is now pending, or may be hereafter brought, in any state court in which there is a controversy between a citizen of the state in which the suit is brought and a citizen of another state, any defendant being such citizen of another state may remove such suit into the circuit court of the United States for the proper district, at any time before the trial thereof, when it shall be made to appear to said circuit court that from prejudice or local influence he will not be able to obtain justice in such state court, or in any other state court to which said defendant may, under the laws of the state, have the right, on account of such prejudice or local influence, to remove said cause.'

The provision of the act of 1887 were construed and applied by this court in the case of Whelan v. Railroad Co., 35 F. 863, which is cited and relied on as fully sustaining the present removal. The decisions on the circuit are not in harmony touching the mode of procedure to effect a removal under said act because of prejudice or local influence, or the necessity of giving notice of the application, or to the right of the side opposing the removal to traverse and in some form to try the question whether such prejudice or local influence actually exists. The cases, however, generally concur in the proposition that any defendant, being a non-resident of the state in which the suit is brought, who can make it appear to the circuit court that he cannot obtain justice in the state court, etc., because of prejudice or local influence, is entitled to have the suit removed provided the requisite citizenship exists on the part of the plaintiff or complainant in the cause. After a re-examination of the opinion in Whelan v. Railroad Co., as...