Vimont v. Chicago & Northwestern Railway Company

• Decision Date: 21 October 1884
• Citation: 17 N.W. 31,64 Iowa 513
• Parties: VIMONT v. THE CHICAGO & NORTHWESTERN RAILWAY COMPANY
• Court: Iowa Supreme Court

17 N.W. 31

64 Iowa 513

VIMONT v. THE CHICAGO & NORTHWESTERN RAILWAY COMPANY

Supreme Court of Iowa, Dubuque

October 21, 1884

Appeal from Polk Circuit Court.

THE plaintiff appeals from an order remanding the cause to the federal court. The defendant appeals from an order overruling a motion made by the defendant to make one Johnson a party. The plaintiff perfected his appeal first.

REVERSED.

Nourse & Kauffman, for appellant.

N. M Hubbard and W. S. Clarke, for appellee.

ADAMS J., SEEVERS, J.

OPINION

ADAMS, J.

I.

It seems proper to consider the question first which is presented by the defendant's appeal. The action is brought by the plaintiff, Vimont, as assignee of one C. O. Johnson, to recover for a personal injury alleged to have been sustained by the assignor by reason of the wrongful and negligent acts of the defendant.

The defendant moved that Johnson be made a party, but the court overruled the motion, and this constitutes the defendant's ground of complaint. "When a determination of the controversy between the parties before the court cannot be made without the presence of other parties, the court must order them to be brought in." Code, § 2551. The defendant contends that this is precisely such case. While it does not deny that the plaintiff may hold a nominal assignment of Johnson's claim for damages, yet it insists that it may not be a valid assignment, and, in fact, is not a valid assignment, and that, such being the fact, a determination of the action, either for or against the plaintiff, would not conclude Johnson, and that his presence, therefore, as a party, is necessary for the defendant's protection.

We do not care to go into an extended consideration of the doctrine upon which the defendant relies. The assignment from Johnson to the plaintiff is set out in the plaintiff's petition, and purports to convey all of Johnson's interest, and we do not understand that the fact of the execution of the instrument is controverted. It may, it is true, be invalid for reasons which do not appear on its face. But the case has this peculiar feature, Johnson did in fact appear in the action, and filed what he called a response to the defendant's motion, setting up his sale and assignment of the claim to the plaintiff, and denying all ownership therein, or control of the prosecution thereof. After Johnson had thus appeared and put himself upon the record, there was, we think, no reasonable ground for sustaining the defendant's motion, unless it might be for reasons connected wholly with the question as to the defendant's right of removal to the federal court, and that we shall have occasion to consider hereafter.

II. Whether such right of removal existed is a question presented by the plaintiff's appeal. The petition for a removal shows that the defendant is a citizen of the state of Illinois, and, while it concedes that the plaintiff is a citizen of the same state, yet it avers that he is not the real party in interest, but that Johnson is, and that Johnson is a citizen of the state of Iowa, and that by reason of this fact, in connection with the fact that the amount in controversy is over $ 500, the federal court has jurisdiction, and the defendant a right of removal.

For the purposes of the opinion, it might be conceded that the circuit courts of the United States may, in some cases, have jurisdiction on the ground of citizenship, even where all the parties are citizens of the same state. Possibly this would be so where the petition showed that the plaintiff was a merely nominal and passive party, having no interest in, nor right to control, the litigation, though, by reason of some provision of statute, a legal party, and where, also, the petition showed who the person beneficially interested in, and having the right to control, the litigation was, and where the petition for removal showed the citizenship of such person to be such as would give the federal court jurisdiction if the person were the plaintiff of record. In such case it may be that a court would be justified in deeming the person beneficially interested, and having the right to control the litigation, as the real plaintiff, so far as the question of federal jurisdiction is concerned. As supporting such doctrine, see Browne v. Strode, 5 Cranch 303, 3 L.Ed. 108, and McNutt v. Bland, 2 Howard 9. But these cases differ from the case at bar. The plaintiffs in those cases were mere conduits, designated by the law as such, and through whom the parties aggrieved were to seek their remedy. They were wholly passive. They had no right to commence the actions, nor the right to dismiss them when commenced by the parties in interest.

In the case at bar, if the assignment is valid in such sense as to give the plaintiff a right of action anywhere, it appears to us that he is at least a trustee. Now, we understand that the authorities are agreed that, where an action is brought by a trustee, who is such in good faith, and has power to control the claim, the citizenship of the persons beneficially interested, but not parties to the record, is not considered on a question of removal. If the trustee is a citizen of the same state of which the defendant is, federal jurisdiction is excluded. Coal Co. v. Blatchford, 11 Wall. 172, 20 L.Ed. 179; Knapp v. Railroad Co., 20 Wall. 117, 22 L.Ed. 328. Probably the defendant would not dispute this proposition. The objections raised by it go to the validity of the assignment. It disputes the plaintiff's trusteeship. It avers that the assignment is colorable and fraudulent, and invalid for other reasons.

But, suppose the facts are as the defendant contends, do they constitute a ground for removal? Could the court below, after having found such facts, properly make an order of removal? We think not. If such were the facts, the plaintiff had no cause of action. He was not the real party in interest, and should go out of court. The defendant was entitled to something better than an order of removal. We do not see how the plaintiff could have interest and power enough to enable him to prosecute the action in any court, without its resulting in the exclusion of federal jurisdiction. This is not a case where the plaintiff could be regarded as a mere conduit, as in Browne v. Strode and McNutt v. Bland, above cited. If he were reduced to something less than a trustee, he would sustain no legal relation to the claim whatever. If the assignment, for instance, had provided that the object of it was merely to give the assignor the right to use the plaintiff's name, while he was to remain passive, with neither interest nor power, he should not be allowed to maintain the action anywhere. The controversy would be decided upon such facts appearing, and there would be nothing to remove.

Now, under the facts, as the defendant avers them to be, it appears to us that the case is substantially the same. We think that on the defendant's appeal the judgment must be affirmed, and, on the plaintiff's appeal,

REVERSED.

OPINION ON REHEARING.

THE plaintiff, as assignee of one Johnson, brought this action to recover damages for a tort committed by the defendant. The latter moved the court to require Johnson to be made a party to the action. This motion was overruled and the defendant appeals. The latter afterward filed a motion to transfer the cause to the federal court. This motion was sustained, and the plaintiff appeals.

SEEVERS J.

As to the defendant's appeal. The petition states that C. O. Johnson was a passenger on one of defendant's trains, and, because of the negligence of the defendant, he was injured, and entitled to recover damages therefor. The nature and extent of the injuries are stated, and that Johnson had assigned his claim and right of action to the plaintiff, wherefore judgment was asked.

The defendant pleaded, First, a general denial of the allegations of the petition; Second, "that the assignment was colorable, collusive and fraudulent, and made for the purpose of depriving defendant of its right to remove the cause to the federal court;" and, Third, that the assignment of the claim by Johnson, together with the agreement executed at the same time by Vimont, constitutes barratry, champerty and maintenance, and is void for that reason." The agreement executed by the plaintiff at the time the assignment was made is in these words: "In consideration of the assignment to me by C. O. Johnson of his claim for damages against the Chicago & Northwestern Railway Co., resulting to him by reason of an injury received by him on or about the thirty-first day of August, 1881, on said railway, I hereby agree to dispose of the entire amount realized on said claim as follows: For my own compensation in and about the prosecution of said claim, and for the use of any advances of money I may make, I am to retain thereof the sum of fifty dollars. I am, also, to retain all sums of money that I may advance in the prosecution of said claim. Next, I agree to pay out of the proceeds of said recovery the reasonable fee of the attorneys and agents employed to prosecute said claim, or such fee therefor as may be agreed upon, if an agreement for a specific amount shall be agreed upon, and the balance of said recovery I agree to pay to the said C. O. Johnson.

"WM. H. VIMONT."

The defendant also pleaded that the assignment was made and completed in Illinois, and that, by the laws of that state, the assignment is void, and that it is illegal and void under the laws of Iowa.

The defendant moved the court to make an order requiring said Johnson to be made a party plaintiff, on the ground that no determination of the controversy could be made unless said Johnson was a party to the record; and, in support of the motion, the defendant...