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.
This rule will be adhered to even if, on the trial of the
action, the lower court holds that no evidence was given by the
plaintiff tending to show liability of the resident defendant, and
a second application for removal from the state to the federal
court has been made and denied after a trial, and the trial court
has sustained a demurrer to the evidence as to the resident
defendant, and where it appears that the ruling was on the merits
and
in invitum.
Powers v. Chesapeake & Ohio Railway Company,
169 U. S. 92,
distinguished, and
Whitcomb v. Smithson, 175 U.
S. 635, followed.
Where a fraudulent joinder of defendants is averred by the party
petitioning for removal and is specifically denied, the petitioner
has the affirmative of the issue.
This was an action brought by Andrew Herman, a minor, by his
next friend, in the Court of Common Pleas of Wyandotte County,
Kansas, September 18, 1897, against the Union
Page 187 U. S. 64
Terminal Railway Company, a corporation of Kansas, and the
Kansas City Suburban Belt Railway Company, a corporation of
Missouri, to recover damages for injuries inflicted through their
joint or concurrent negligence.
The belt railway company, October 18, 1897, filed a verified
petition and bond for removal, in proper form, on the ground of a
separable controversy; which petition alleged the controversy
between plaintiff and petitioner to be distinct and separable from
that between plaintiff and the Union Terminal Railway Company, on
these grounds:
"1. Defendant the Union Terminal Railway Company owns, repairs,
and maintains the railroad mentioned in plaintiff's petition. Your
petitioner has no interest therein, except that it has leased same
and pays certain yearly rental for the use of said tracks. All of
the locomotives, engines, and cars running over said railroad are
the property of your petitioner, or subject to its control.
Defendant terminal company has no control over the operation of
trains, and has no employees in train service. Defendant the Union
Terminal Railway Company is responsible for the condition of the
track, and your petitioner, and none other, for the acts and doings
of all persons operating trains."
"2. The plaintiff herein has declared upon two distinct causes
of action: first, for maintaining a defective switch, and second,
for negligent operation of a train of cars, the first of which, if
true, is negligence chargeable against defendant the Union Terminal
Railway Company, and the second, if true, is negligence chargeable
against your petitioner."
"3. The train of cars mentioned in the petition was operated by
your petitioner as averred. All of the parties in charge thereof
were in your petitioner's employ, and none other."
"4. By reason of the foregoing, your petitioner says that
whatever cause of action plaintiff has for negligent operation of
said railroad train lies against your petitioner exclusively."
The application for removal was heard February 5, 1898, and,
upon argument, denied. The belt company thereupon filed a
transcript of the record in the Circuit Court of the United States
for the District of Kansas, and plaintiff made a
Page 187 U. S. 65
motion to remand, which was sustained by the circuit court and
the cause remanded to the state court "on the ___ day of May,
1898." Each of the two railroad companies defendant then filed its
separate demurrer May 28, 1898, assigning as causes misjoinder of
parties, and that plaintiff had not stated a cause of action, or
facts sufficient to constitute a cause of action, against it. These
demurrers were severally overruled, and the defendants severally
answered. The cause came on for trial October 18, 1898, and on
October 20, at the close of the evidence for plaintiff, each
company filed its separate demurrer to the evidence on the ground
that the same was not sufficient to establish a cause of action
against it. The court sustained the demurrer of the terminal
company, the Kansas corporation, and entered judgment in its favor,
to which ruling of the court plaintiff at the time excepted, and
the court overruled the demurrer of the belt company, the Missouri
corporation, to which ruling the belt company excepted. Thereupon,
the belt company filed a second verified petition for removal,
which, after rehearsing the prior proceedings, thus continued:
"And the defendant further says that no evidence was offered or
introduced by plaintiff, or attempt made, to show a cause of action
against said Union Terminal Railway Company; that said Union
Terminal Railway Company was joined with this defendant
fraudulently, and for the sole purpose of preventing a removal of
this cause to the circuit court of the United States, and with no
purpose or intent of attempting to show any cause of action against
it."
"This defendant now here shows to the court that there is a
separable controversy, and that the plaintiff's cause of action
exists against the defendant alone, and in nowise against the said
defendant the Union Terminal Railway Company. That no cause of
action ever existed against the defendant the Union Terminal
Railway Company, as plaintiff at all times well knew."
In response to this petition, plaintiff filed, without
objection, an affidavit which stated, among other things, that it
was not true
"that plaintiff joined the Union Terminal Railway Company
Page 187 U. S. 66
as defendant therein fraudulently, or for the purpose of giving
this Court jurisdiction of the petitioner, but, on the contrary,
plaintiff avers that said action was brought in good faith against
both defendants as joint tortfeasors, and that plaintiff believed
in good faith that he has a joint cause of action against both
defendants, and had subpoenas issued for witnesses to prove
directly the responsibilities of the Union Terminal Railway Company
for the injuries sustained by plaintiff; but that, on account of
the removal of a witness from the state, plaintiff was, at the last
moment, unable to obtain certain testimony which, if introduced,
would have tended to prove the joint liability of said defendants.
That plaintiff has excepted to the ruling of the court sustaining a
demurrer to the evidence on the part of the Union Terminal Railway
Company in the trial of this case for the purpose of preserving his
rights in this action against both of said defendants jointly."
And it was further stated that counsel had relied on the
production, on notice which had been given, of
"writings showing the relations existing between the two
defendant companies in the operation and maintenance of their lines
of railroad where the injuries were received,"
and on an agreement with counsel for both of the defendants to
admit the facts as to the relations between said companies, which,
when it was too late to adduce other testimony, was not
fulfilled.
The application for removal was overruled, and the belt company
excepted, but took no bill of exceptions embodying the evidence to
which the demurrers had been directed. The trial then proceeded,
and resulted in a disagreement of the jury.
Plaintiff subsequently filed an amended petition reducing the
damages claimed to less than $2,000, and the cause was again tried,
and resulted in a verdict and judgment in favor of plaintiff for
$1,500. The cause was carried to the Kansas Court of Appeals and
the judgment affirmed, and thence to the Supreme Court of Kansas,
with like result.
Kansas City Suburban Belt R. Co. v.
Herman, 68 P. 46.
A writ of error from this Court was then allowed by the Chief
Justice of Kansas, and citation issued to and acknowledged
Page 187 U. S. 67
on behalf of Herman and the Union Terminal Railway Company. The
case was submitted on motions to dismiss or affirm.
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
The question is whether the state court erred in denying the
second application for removal, and in view of our previous rulings
in respect of such applications we think there was color for the
motion to dismiss. And reference to two recent decisions of this
Court will indicate the reasons for our conclusion that the motion
to affirm must be sustained.
In
Powers v. Chesapeake & Ohio Railway Company,
169 U. S. 92, the
railroad company filed its petition for removal on the grounds of
separable controversy, and that its codefendants were fraudulently
and improperly joined in order to defeat the company's right of
removal. The transcript of the record of the state court was filed
in the circuit court of the United States, and a motion to remand
was sustained for want of separable controversy. Thereafter, when
the case was called for trial in the state court, plaintiff
discontinued his action against the codefendants, and the company
filed a second petition for removal, which was denied. The company
then again filed a transcript of the record of the proceedings in
the circuit court, and plaintiff again moved to remand, and the
circuit court, being of opinion that plaintiff had fraudulently
joined the codefendants in order to defeat the removal, and was
estopped to deny that the second petition for removal was filed in
time, denied the motion to remand. 65 F. 129. Final judgment was
afterwards rendered in the company's favor, and a
Page 187 U. S. 68
writ of error was sued out from this Court on the sole ground
that the cause had not been properly removed into the circuit
court. The judgment was affirmed, and it was held that
"when this plaintiff discontinued his action as against the
individual defendants, the case for the first time became such a
one as, by the express terms of the statute, the defendant railway
company was entitled to remove, and therefore its petition for
removal, filed immediately upon such discontinuance, was filed in
due time."
But we did not pass upon the questions of fraudulent joinder and
estoppel, because the application was seasonably made and stated
sufficient ground for removal apart from fraud.
In
Whitcomb v. Smithson, 175 U.
S. 635, the action had been brought by Smithson in a
Minnesota court against the Chicago Great Western Railway Company
and H. F. Whitcomb and Howard Morris, receivers of the Wisconsin
Central Railroad Company, to recover for personal injuries
inflicted, while he was serving the Chicago company as a locomotive
fireman, in the collision of the locomotive on which he was at work
and another locomotive operated by Whitcomb and Morris as
receivers. The Chicago company answered the complaint, and the
receivers filed a petition for the removal of the cause into the
Circuit Court of the United States for Minnesota, alleging diverse
citizenship; that they were officers of the United States court;
that the controversy was separable, and that the railway company
was fraudulently made a party to prevent removal. Plaintiff
answered the petition, and asserted that the company was made party
defendant in good faith, and not for that purpose. An order of
removal was entered, and the cause sent to the circuit court, which
thereafter remanded it to the state court. Trial was had, and,
after the testimony was closed, counsel for the Chicago company
moved that the jury be instructed to return a verdict in behalf of
that defendant, which motion was granted. The receivers then
presented a petition for removal, but the court denied the
application, and exception was taken. The court thereupon
instructed the jury to return a verdict in favor of the Chicago
company, which was done, and the cause went to the jury, which
returned a verdict against
Page 187 U. S. 69
the receivers and assessed plaintiff's damages. Judgment was
entered on the verdict, and subsequently affirmed by the Supreme
Court of Minnesota on appeal, and a writ of error was sued out from
this Court. Motions to dismiss or affirm were submitted, and we
held that there was color for the motion to dismiss, and affirmed
the judgment. We there said:
"The contention here is that, when the trial court determined to
direct a verdict in favor of the Chicago Great Western Railway
Company, the result was that the case stood as if the receivers had
been sole defendants, and that they then acquired a right of
removal, which was not concluded by the previous action of the
circuit court. This might have been so if, when the cause was
called for trial in the state court, plaintiff had discontinued his
action against the railway company, and thereby elected to
prosecute it against the receivers solely, instead of prosecuting
it on the joint cause of action set up in the complaint against all
the defendants.
Powers v. Chesapeake & Ohio Railway,
169 U. S.
92. But that is not this case. The joint liability was
insisted on here to the close of the trial, and the nonliability of
the railway company was ruled
in invitum."
It was pointed out that the ruling of the trial court
"was a ruling on the merits, and not a ruling on the question of
jurisdiction. It was adverse to plaintiff, and without his assent,
and the trial court rightly held that it did not operate to make
the cause then removable, and thereby to enable the other
defendants to prevent plaintiff from taking a verdict against them.
The right to remove was not contingent on the aspect the case may
have assumed on the facts developed on the merits of the issues
tried."
We held also that the judgment of the circuit court in remanding
the cause, when removed on the first application, covered the
question of fact as to good faith in the joinder, and added
that,
"assuming, without deciding, that that contention could have
been properly renewed under the circumstances, it is sufficient to
say that the record before us does not sustain it."
It will be perceived that, in
Powers v. Railway
Company, applications for removal were made; they were
severally denied, and the record was filed in the circuit court of
the
Page 187 U. S. 70
United States in each instance. Remand was granted on the first
removal, and denied as to the second. Plaintiff voluntarily
discontinued his action against the company's codefendants before
trial, thereby leaving the case pending between citizens of
different states, and no necessity to dispose of the issue as to
fraudulent joinder arose.
In
Smithson v. Whitcomb, two applications for removal
were made, and they were severally denied, but the record was filed
in the circuit court of the United States only on denial of the
first application, and the case was only once remanded. Plaintiff
did not discontinue his action against either of the defendants,
and went to trial against both, and the trial court directed a
verdict in favor of one of them. The ruling was on the merits and
in invitum.
In the case at bar, two applications for removal were made, and
they were severally denied, but the record was filed in the circuit
court of the United States only on the denial of the first
application, and the case was only once remanded. Plaintiff did not
discontinue as to either of the defendants, and went to trial
against both, and the trial court sustained, in favor of one of
them, a demurrer to the evidence. Here again the ruling was on the
merits and
in invitum.
The first petition in terms raised no issue of fraudulent
joinder, but the second petition did. Was that issue seasonably
raised, and, if so, ought the case to have been removed? The second
petition did not state when petitioner was first informed of the
alleged fraud, but left it to inference that it was not until after
plaintiff had introduced his evidence, notwithstanding the
averments in the first petition.
But, apart from this, the averments of fraud were specifically
denied, and, so far as this record discloses, the petitioner, who
had the affirmative of the issue, failed to make out its case.
Plymouth Mining Company v. Amador Canal Company,
118 U. S.
270.
Doubtless the general rule is that issues of fact raised on
petitions for removal should be tried in the circuit court of the
United States, but petitioner did not file the record in the
circuit court, and, as the issue was correctly disposed of, it
would
Page 187 U. S. 71
be absurd to send the case back to be removed for the purpose of
being remanded, and we are obliged to deal with the record as it
is. Nor was the evidence introduced on plaintiff's behalf, and
demurred to, made part of the record, and the bare fact that the
trial court held it insufficient to justify a verdict against the
terminal company was not conclusive of bad faith. The trial court
may have erred in its ruling, or there may have been evidence
which, though insufficient to sustain a verdict, would have shown
that plaintiff had reasonable ground for a
bona fide
belief in the liability of both defendants. In these circumstances,
the case comes within
Smithson v. Whitcomb, and the
judgment must be
Affirmed.
