Woulfe v. Atl. City Steel Pier Co.

• Decision Date: 14 May 1941
• Docket Number: 129/703.
• Citation: 20 A.2d 45,129 N.J.Eq. 510
• Parties: WOULFE et al. v. ATLANTIC CITY STEEL PIER CO. et al.
• Court: New Jersey Court of Chancery

20 A.2d 45

129 N.J.Eq. 510

WOULFE et al.

v. ATLANTIC CITY STEEL PIER CO. et al.

129/703.

Court of Chancery of New Jersey.

May 14, 1941.

Syllabus by the Court.

1. A cause of action is not, ipso facto, removed from a state to a federal court by the filing of the required petition and bond therefor; removal is the result of the exercise of judicial discretion by a court, eo nomine, and not the act of a clerk.

2. On an application for removal, the courts of this state have the right and the duty to examine the record, and to determine whether the statutory requirements have been complied with and whether the cause is removable, and, if not, to refuse to surrender jurisdiction.

3. The sole question for decision by the state court is the sufficiency of the petition, and sufficiency depends upon whether or not the bill of complaint discloses a separable controversy involving the nonresident petitioner-defendant and an indispensable resident party.

4. In removal proceedings, severability of a controversy exists only where there is a separate and distinct cause of action, on which a separate and distinct suit might have been brought and complete relief afforded as to such cause of action, with all the parties on one side of that controversy citizens of different states from those on the other side.

5. Where the subject matter of the suit cannot be justly and equitably, completely and finally determined, without the presence of all those originally made parties to the suit, severability does not exist.

6. The test of separability must be applied to the cause of action as it is stated by complainant—not as the defendant endeavors to compel him to state it. A defendant has no right to say that an action shall be several which a complainant elects to make joint.

7. A cause of action is not separable which alleges that sales of commodities have been and are to be made on New Jersey property of a non-resident defendant as a result of the issuance of a mercantile license by the defendant resident municipality, in violation of its trust duty, and in violation of covenants in such trust deed and of an injunctive decree of this court.

8. Where a decree is sought against a trustee of the legal title to land, and others, to restrain alleged violations of covenants contained in the trust deed resulting from a violation by the trustee of its trust and a violation of the covenants by it and its co-defendant, the trustee is properly made a defendant The fact that the trustee was invited to join in the bill as a complainant (which invitation was declined) does not require a court to regard the trustee as a party complainant.

9. Where the presence of the trustee as a defendant in the suit would prevent removal of the cause to the federal courts on the ground of diversity of citizenship, that result is not, alone, sufficient to move the court to regard the trustee as a complainant rather than a defendant, especially where, as here, the allegations of the bill import a conspiracy between the trustee and the other defendant to violate an injunctive decree of this court as well as to violate covenants in the instrument creating the trust.

10. Where legal title to land has been conveyed to a city, subject to certain specific covenants, and where a former decree of this court has declared that city to be a "trustee for the public" and perpetually enjoined any violation of covenants contained in a trust deed, and where the bill of complaint alleges violations of such covenants by joint action or conspiracy, the city is an indispensable party to a suit to enjoin alleged and contemplated violations of the covenants.

Suit by John C. Woulfe and others against the Atlantic City Steel Pier Company and the City of Atlantic City to restrain any violation on the Steel Pier at Atlantic City of covenants voluntarily created by more than one hundred owners of land when the right of easement was given the city for construction and maintenance of the present boardwalk in that city. On petition for removal of cause to the United States District Court for the District of New Jersey.

Petition denied.

Vincent S. Haneman, of Atlantic City, for complainants.

Thompson & Lloyd, by John Lloyd, Jr., and George A. Bourgeois, all of Atlantic City, and Louis B. LeDuc, of Camden, for defendant-petitioner, Atlantic City Steel Pier Co.

Samuel Backer, of Atlantic City, for defendant Atlantic City.

WOODRUFF, Vice Chancellor.

The defendant, Atlantic City Steel Pier Company, a corporation of the State of Delaware, seeks a removal of this cause to the United States District Court for the District of New Jersey, and has filed a petition therefor and the required bond.

This is one of two causes recently instituted to restrain any violation on the Steel Pier at Atlantic City of covenants voluntarily created by more than one hundred owners of land when the right of easement was given the city for the construction and maintenance of the present boardwalk in that city. The right to build a pier in front of their property was reserved by the donors and, subsequently, Steel Pier, the amusement pier of the defendant company, and other similar structures were erected. The covenant reads: "We will not put or erect, or allow to be placed or erected, on the land hereby granted, or on the ocean side thereof, any building or structure except as by ordinance provided, and covenant that the above covenant shall run with the land; provided, that the grantors shall not be prohibited from building a pier in front of their property, and connecting the same to the new boardwalk about to be erected; and upon the further condition that the said pier shall be at least one thousand feet in length, extending into the ocean beyond the present sixty-foot strip, and constructed of iron or steel, and shall not permit the sale of any commodities upon the same, and be confined to the charging only an entrance fee."

In 1901 violations of this covenant on Steel Pier and on Young's Pier were charged, two bills of complaint were filed by the City of Atlantic City and the causes tried together. Similar decrees were therein made; the decree against the owners of Steel Pier "perpetually enjoining and restraining the Atlantic City Steel Pier Company, its attorneys, agents and servants from selling or causing, or permitting to be sold any commodity on the pier of the company at Atlantic City, and also, from selling any commodity or charging an additional fee for admission to the privileges of any particular part or place on the pier in addition to an entrance fee to the pier or after entrance to the pier." In the opinion filed by Vice Chancellor Reed, Atlantic City v. Atlantic City Steel Pier Company, 62 N.J.Eq. 139, 49 A. 822, 824, he, inter alia, said:

"The owners have themselves limited the uses to which such structures may be put. Such a restricted grant, in my judgment, the city may accept, and, as the representative and trustee of the public, may invoke the judicial arm of the government to protect. * * *

"The covenant in the present case is, as already remarked, practically to secure an easement; and easements may be imposed upon the land by its owner * * *. Then, again, this covenant is one of many similar covenants entered into by a body of covenantors as part of a common scheme for the mutual advantage of each and all such covenantors."

Steel Pier had been erected in 1898 by Atlantic City Steel Pier Company, a New Jersey corporation. On November 13, 1925, surviving directors of that corporation, as trustees in dissolution, conveyed the pier premises to Steel Pier Company, a New Jersey corporation; subsequently the latter company amended its certificate of incorporation and changed its name to "Atlantic City Steel Pier Company." The officers and directors were Frank P. Gravatt, president; Flora Gravatt, his wife, secretary and treasurer; and Richard Endicott, assistant secretary.

The status of the City of Atlantic City, under the easement deeds, was defined by Vice Chancellor Reed as "trustee for the public." In 1906 violations of the covenant again occurred on Steel Pier and again the city sought preventative relief in this court. City of Atlantic City v. Associated Realties Corp., 72 N.J.Eq. 634, 67 A. 937. Denied an injunction, the city appealed. The Court of Errors and Appeals said:

"There is no distinction, from the view point of the covenant, between the character of the charge for the hire of skates and the charge for the hire of reserved seats such as was properly held in Atlantic City v. Atlantic City Steel Pier Co., supra, to be a violation of the covenant. * * *

"The complainant is entitled to have an injunction restraining the defendant, its officers, servants, agents, and employes, from charging visitors to its pier any fee or sum of money for the hire and use of roller skates, or for checking garments, in addition to an entrance fee to the pier or after entrance to the pier." 73 N.J.Eq. 721, 70 A. 345, 347, 17 Ann.Cas. 743.

The matter of this covenant has been before this court nine times and five of those decisions have been reviewed by the Court of Errors and Appeals: City of Atlantic City v. Atlantic City Steel Pier Company, supra; City of Atlantic City v. Young, McShea Amusement Co., Chancery, 1901, 62 N.J.Eq. 147, 49 A. 1135, reversed, Court of Errors and Appeals, 1902, 63 N.J.Eq. 831, 53 A. 168; Atlantic City v. New Auditorium Pier Co., Chancery, 1902, preliminary hearing, 63 N.J.Eq. 644, 53 A. 99; Id., Chancery, 1904, final hearing, 67 N.J.Eq. 284, 58 A. 729, reversed, Court of Errors and Appeals, 1904, 67 N.J. Eq. 610, 59 A. 158, reargument before Court of Errors and Appeals was sought in 1905 by the city, Id., 67 N.J.Eq. 621, 63 A. 169; Evans v. New Auditorium Pier Co., preliminary application, Chancery, 1902, 63 N.J.Eq. 674, 53 A. 111; Id., final hearing, Chancery, 1904, 67 N.J.Eq. 315, 58 A. 191, reversed, Court of Errors and Appeals, 1904, Id., 67...