Town of Morganton v. Hutton & Bourbonnais Co.

• Decision Date: 14 May 1924
• Docket Number: 477.
• Parties: TOWN OF MORGANTON v. HUTTON & BOURBONNAIS CO. ET AL.
• Court: North Carolina Supreme Court

122 S.E. 842

187 N.C. 736

TOWN OF MORGANTON v. HUTTON & BOURBONNAIS CO. ET AL.

No. 477.

Supreme Court of North Carolina

May 14, 1924

Appeal from Superior Court, Burke County; Webb, Judge.

Condemnation proceeding by the Town of Morganton against the Hutton & Bourbonnais Company and Herman Bonninghausen. From an order of the district court, denying his petition for removal to a federal court, defendant Bonninghausen appeals. Affirmed.

This was a condemnation proceeding by the town of Morganton against Hutton & Bourbonnais Company, a domestic corporation for the condemnation of a large body of timber land for the purpose of providing a watershed and a water supply for the town. The summons was issued August 12, 1922, and a certified petition was filed August 12, 1922. The petition was in proper form. On June 14, 1923, upon affidavit of the town manager that he had notice that Herman Bonninghausen, a citizen of Michigan, claimed that he was owner of the lands an order was granted by the clerk making said nonresident a party defendant and giving the petitioner leave to file a supplementary petition and ordering a summons to issue for said nonresident. The summons was issued and served by publication. He filed the supplementary amendatory petition. Thereafter on August 21, 1923, the said nonresident Bonninghausen, filed a petition and bond for removal of the cause to the United States District Court, which was allowed by the clerk, but on appeal to the superior court the order was reversed, and the nonresident appealed to this court.

Ervin & Ervin, of Morganton, W. B. Councill, of Hickory, and Cansler & Cansler, of Charlotte, for appellant.

Avery & Ervin, of Morganton, W. A. Self, of Hickory, and L. E Rudisill, of Morganton, for appellee.

CLARK C.J.

In Black's Dillon on Removal of Causes, § 84, it is said, with a wealth of citations, that the following is the rule upon motions to remove causes from a state to the federal court:

"When there are several plaintiffs or several defendants in the cause, and a removal is asked on the ground of diverse citizenship, it is necessary that all of the parties on one side of the controversy (except merely nominal or formal parties, or parties improperly joined, whose citizenship may be disregarded) should be citizens of a different state or states from all of the parties on the other side. It is not enough that some of the plaintiffs may be citizens of different states from some of the defendants. This will not make the controversy one 'between citizens of different states,' within the meaning of the statute as interpreted by the courts. If any one of the plaintiffs is a citizen of the same state with any one of the defendants, the case will not be removable. Even if there is serious doubt as to whether all the defendants are citizens of different states from all the plaintiffs, the federal court should not take jurisdiction. It is not, however, necessary, when the removal is sought on this ground, that all the plaintiffs should be citizens of the state in which the action is brought, provided they are all citizens of states other than of which the defendant is a citizen."

In Lawson v. Railroad, 112 N.C. 400, 17 S.E. 173, Avery, J., quotes Waitt, C.J., in Stone v. South Carolina, 117 U.S. 430, 6 S.Ct. 799, 29 L.Ed. 963, as follows:

"A state court is not bound to surrender its jurisdiction of a suit on petition for removal until a case has been made, which on its face shows that the petitioner has a right to the transfer."

And in Pruitt v. Power Co., 165 N.C. 420, 81 S.E. 626, it is said:

"It is well settled that the state court should not surrender its jurisdiction unless the petition shows upon its face a removable cause and unless such petition and accompanying bond are filed in the state court within the time required by the act of Congress. R. R. v. Daugherty, 138 U.S. 298. * * * Whether the petition in its tenor, and time of filing, authorizes the removal is a matter for decision by the state court in the first instance. That court is not paralyzed by the simple presentation of a petition to remove."

Filing of petition in state court does not ipso facto deprive it of jurisdiction. Howard v. Railroad, 122 N.C. 944, 29 S.E. 778. The federal court acquires no jurisdiction when petition and bond are filed in clerk's office during vacation. Howard v. Railroad, supra; Higson v. Insurance Co., 153 N.C. 40, 68 S.E. 920; also, Dick, J., in Fox v. Railroad (C. C.) 80 F. 945 (1897).

Whether a case is removable is a question of law to be decided by the state courts. Patterson v. Lumber Co., 175 N.C. 93, 94 S.E. 692; Railroad v. Daughtry, 138 U.S. 298, 11 S.Ct. 306, 34 L.Ed. 963; Springs v. Railroad, 130 N.C. 198, 41 S.E. 100; Burlington, etc., R. Co. v. Dunn, 122 U.S. 513, 7 S.Ct. 1262, 30 L.Ed. 1159. And this must be made from the entire record. "The state court is at liberty to determine for itself whether, on the face of the record, a removal has been effected; and if it decides against the removal, its action will, after final judgment, be reviewable" in the Supreme Court of the United States. Stone v. South Carolina, 117 U.S. 430, 6 S.Ct. 799, 29 L.Ed. 962.

There must be a separable controversy, in which the full rights of the nonresident defendant may be determined without the presence of the resident defendant. Peper v. Fordyce, 119 U.S. 469, 7 S.Ct. 287, 30 L.Ed. 435. In Fraser v. Jennison, 106 U.S. 191, 1 S.Ct. 171, 27 L.Ed. 131, it is stated that to remove a case on the ground that it is a separable controversy, the case must be one capable of separation into parts, so that in one of the parts a controversy will be presented with citizens of one or more states on one side and citizens of other states on the other, which can be fully determined without the presence of any of the other parties to the suit as it was begun. To same effect, Hyde v. Ruble, 104 U.S. 407, 26 L.Ed. 823; Torrence v. Shedd, 144 U.S. 527, 12 S.Ct. 726, 36 L.Ed. 528.

Or, if there is a fraudulent or illegal joinder of defendants. but as was said in Fore v. Tanning Co., 175 N.C. 584, 96 S.E. 48, by Hoke, J.:

"In Hollifield v. Telephone Co., 172 N.C. 714, it was held: 'Where a nonresident defendant seeks to remove a cause to the federal court upon the ground of diversity of citizenship, and alleges in his petition that a resident defendant was fraudulently therein joined to prevent removal, before the state court is under any duty or obligation to surrender its jurisdiction there must be specific allegation of the facts constituting the alleged illegal or fraudulent joinder, and it is not sufficient to charge generally or by indefinite averment that the joinder is or was intended to be in fraud of the nonresident defendant's rights.' "

Also, see Tobacco Co. v. Tobacco Co., 144 N.C. 352, 57 S.E. 5; Hough v. Railroad, 144 N.C. at page 700, 57 S.E. 469; Shane v. Butte El. Ry. Co. (C. C.) 150 F. 801.

In Railroad Co. v. Herman, 187 U.S. 63, 23 S.Ct. 24, 47 L.Ed. 76, it is held:

"While an action commenced in a state court against two defendants, one of whom is a resident and the other a nonresident, may be removed to the Circuit Court of the United States by the nonresident defendant if it can be shown that the cause of action is separable and the resident defendant is joined fraudulently for the purpose of preventing the removal of the cause to the Federal court, such removal cannot be had if it does not appear that the resident defendant is fraudulently joined for such purpose."

The question of the nature of the controversy is governed by the complaint. Whether there is a separable controversy is determined by the complaint. Staton v. Railroad, 144 N.C. 135, 56 S.E. 794; Hollifield v. Telephone Co., 172 N.C. 714, 90 S.E. 996; Patterson v. Lumber Co., 175 N.C. 92, 94 S.E. 692. And the plaintiff is entitled to have his cause of action considered as stated in complaint. Hough v. Railroad, 144 N.C. 700-702, 57 S.E. 469; Smith v. Quarries Co., 164 N.C. 338, 80 S.E. 388; Powers v. Railroad, 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673; Chesapeake & O. R. Co. v. Dixon, 179 U.S. 135, 21 S.Ct. 67, 45 L.Ed. 121; Alabama G. S. Ry. Co. v. Thompson, 200 U.S. 206, 26 S.Ct. 161, 50 L.Ed. 441, 4 Ann. Cas. 1147.

In Powers v. Railroad, 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673, it is said that a separate defense cannot create a separate controversy or deprive the plaintiff of the right to prosecute his own suit to a final determination in his own way, for the cause of action is the subject-matter of the controversy and is what the plaintiff alleges. Cited in Southern Ry. Co. v. Carson, 194 U.S. 138, 24 S.Ct. 609, 48 L.Ed. 907. Also in Railroad v. Ide, 114 U.S. 52, 5 S.Ct. 735, 29 L.Ed. 63, it is said:

"A defendant cannot make an action several which a plaintiff has elected to make joint."

In condemnation of land of nonresident defendant alone, federal court seems to have jurisdiction after appraisers have made their award; but never where a resident defendant is interested in the land.

Compensation (i. e., to nonresident), and not taking, places jurisdiction in the federal court. McCulloch v. Railroad, 149 N.C. 313, 62 S.E. 1096.

State and not United States courts have jurisdiction in condemnation proceedings. Ib. at page 317 (62 S.E. 1096), and cases cited therein.

In Bellaire v. Railroad, 146 U.S. 117, 13 S.Ct. 16, 36 L.Ed. 910, it is said:

"Where the object of the suit is to condemn and appropriate to the public use a single lot of land, the controversy is not divisible because the two defendants own distinct interests and may be entitled to separate damages, and, therefore, one of them cannot remove the cause [as to himself alone] from the state court to the Circuit Court of the United

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