56 F. 737 | U.S. Circuit Court for the District of Western Missouri | 1893
The question to he decided is whether or not this proceeding is a suit, within the meaning of the judiciary act, and, as such, removable from the state court to the United States circuit court, under the second section of the act of congress of March 3, 1887, as amended August 13, 1888. The contention of plaintiff is that the proceeding under the state statute is merely ancillary, in aid of the writ of execution, and, as such, is to he regarded as a continuation of the proceeding on the judgment; and that, as the principal cannot he removed hither, neither can this, its mere incident. Without undertaking to review the
“A stockholder is not in any sense a party to the judgment rendered against a corporation to which he may belong, nor does such judgment hind his property. * * * In Blackman v. Railroad Co. it was ruled that, upon a corporation being sued, a stockholder is not a party to the action, and not before the court.” 58 Ga. 189.
The court then proceeds to notice the ruling by the English courts in such proceeding, where it is held that the stockholder should have an opportunity to have the matter as to his liability tried by a jury, with the right to a writ of error; that the stockholder “is not a party on the record, and, though the acts say that execution shall issue, they mean after the proper stages have been taken to make .the person intended to be charged a party to the record.” Fürther on the court says: '
“The proceeding is sometimes said to be auxiliary to the main one, yet * * * the moving against the stockholder * * * is an independent and original action; and so this court has treated it in regard to the stockholders. * * * Any process, whether notice, writ, or motion, which, when served upon a party, will have the effect to authorize an order or judgment in per-sonam against him, upon the rendition of which a general execution may issue, leviable upon all the property in the state of which he may be possessed, cannot he regarded in any other light, so far as that party is concerned, than as an independent proceeding.”
On the well-settled rule of comity, this court, in applying a state statute in a case like this, feels bound by, and wül follow, the construction placed upon it by the state court.
It would not be questioned if, in the absence of this statutory proceeding, the judgment creditor had found Mr. Bates in this state, and had proceeded against him by bill in equity to reach assets in his hands belonging to the debtor corporation, it would have been a “suit” removable into this jurisdiction. And since the state supreme court declares that the motion for execution is in the nature of a suit in equity to reach such assets, and is an independent and
Again, it is said, in support of the proposition that this proceeding is merely incidental and dependent, that if the debt against the corporation should be satisfied by it, the proceeding against the stockholder would eo iustanti cease. The same could be-said of a suit in equity by a judgment creditor against a fraudulent grantee to declare a trust in favor of the creditor, or oí a suit at law against the assignor of a note after failure to collect from the maker. A payment by the original debtor would put an end to the last proceeding. Yet no question could bo ¡nade, if the diverse citizenship existed, of the right of the defendant in such suits to remove the cause into the federal court. As said'by Mr. Justice Bradley in Barrow v. Hunton, 99 U. S. 85:
“The character of the cases themselves is always open to examination for the purpose of determining whether, ratione materiae, the courts of the United Stales are incompetent to take jurisdiction thereof.”
The case of Bondurant v. Watson, 103 U. S. 281, is illustrative of the proper distincl ion in question. B. had proceeded to judgment in a parish court of Louisiana against 0., and sued out thereon a fi. fa. against land covered by the mortgage sought to be enforced. A., who was not a party to that judgment, filed suit in the state court to restrain B. from levying the writ on this specific land, claiming a superior title under 0. Thereupon B., a nonresident, removed the proceeding into the federal court. The right of removal was contested on the ground that it was not a new and independ
“The controversy in the original case between Walter E. Bondurant and Albert Bondurant and others had been ended by a final judgment. The case between Watson and Mrs. Bondurant had its origin in a judgment, but it was a new and independent suit between other parties, and upon new issues. * * * It could not be called incidental or auxiliary to the original case. It was a new and independent controversy between other parties. It filled all the requisites of the law for the removal of cases. It was a suit of a civil nature in equity, in which the matter in dispute, exclusive of costs, exceeded the sum or value of five hundred dollars, ($500.00,) and in which there was a controversy between citizens of different states. No reason is perceived why a party to such a controversy should not enjoy his constitutional right of having his cause tried by a court of the United States. The case of Bank v. Turnbull, 16 Wall. 190, relied on by the appellee, is not in point. That was a statutory proceeding to try in a summary way the title to personal property seized on execution. It was nothing more than a method proscribed by the law to enable the court to direct and control its own process, and, as decided by this court, was merely auxiliary to, and a graft upon, the original action.”
One branch of the varied and protracted litigation between Wilson and Seligman reached the supreme court of the United States, and was passed upon shortly after the case in the state court. In this light the language of Mr. Justice G-ray is quite significant touching the question whether the present proceeding possesses i ie element of an independent suit. 144 U. S. 41-46, 12 Sup. Ct. Rep. 541. He says:
“He [Seligman] denies that he was a stockholder, and the question whether he was one was not tried or decided in the controversy between the plaintiff and the corporation, nor involved in the judgment recovered by one of those parties against the other. Under the statute of Missouri, and upon fundamental principles of jurisprudence, he is entitled to legal notice, and trial of the issue whether he is a stockholder, before he can be charged with personal liability as such.”
The defendant’s controversy with the plaintiff is wholly separable from the issues involved in the judgment against the corporation. The only question he litigates here is his liability as a stockholder. The motion takes and occupies the character of a petition. The defendant is brought into court on process. There is a plaintiff and a defendant, and the object of the proceeding is to have the court adjudge whether or not the defendant’s property shall be rendered liable to plaintiff in the sum of $26,250 or less. On this issue he is entitled to a trial in due form of law, with the right of appeal or writ of error. The defendant corporation is not a party to this proceeding, and is not before the court. If such a case does not present all the elements of a “suit,” within the meaning of the judiciary acts of congress, it does seem to me that Chief Justice Marshall was in error when he said, in Weston v. Charleston, 2 Pet. 464:
“The term [‘suit’] is certainly a very comprehensive one, and is understood to apply to any proceeding in a court of justice on which an individual pursues that remedy which the law affords. The modes of proceeding may be various, but if a right is litigated in a court of justice the proceeding on which the decision of the court is sought is a suit.”
It follows that flu; motion to remand is denied.