The general rule is that, when the jurisdiction of a Circuit
Court of the United States has once attached, it will not be ousted
by subsequent change in the conditions.
A circuit court may proceed to judgment on a cross-bill where
defendant's pecuniary claim is less than $2,000, if the
jurisdictional amount in dispute appears from bill, answer and
cross-bill which relate to the same transaction, notwithstanding
the original bill has been voluntarily dismissed.
Kirby filed his first original amended petition in the District
Court of Dallas county, Texas, against the American Soda Fountain
Company, averring that he was induced by false representations by
defendant to agree to exchange his soda fountain apparatus for the
soda fountain apparatus of defendant, and pay defendant $2,025 in
addition, and signed a memorandum in relation thereto, which,
however, plaintiff alleged did not contain all the terms of the
contract; that the exchange was made, but defendant's soda fountain
apparatus, instead of being superior in value by $2,025, was, as
matter of
Page 194 U. S. 142
fact, less by $2,500, and plaintiff prayed for the cancellation
of the obligation to pay $2,025, for $2,500 damages, and for
general relief. The original petition sought damages merely, and in
the sum of $1,500.
On application of defendant, the cause was removed to the
Circuit Court of the United States for the Northern District of
Texas.
The case was entered in that court May 12, 1902, and on that day
defendant filed its answer, denying all charges of fraud, and
setting up the written contract between plaintiff and itself, which
it alleged contained all the terms of the agreement between them,
whereby defendant agreed to manufacture and ship to plaintiff, and
plaintiff purchased of defendant, a certain soda fountain machine
at the price of $3,219, and defendant agreed to take plaintiff's
machine in part payment at the sum of $1,194, leaving a balance of
$2,205, which plaintiff agreed to pay, and which was secured by a
mortgage lien on the property. That defendant manufactured and
shipped the machine to plaintiff and set it up in his store, and
fully complied with the contract, but plaintiff, after paying $325
on account of the $2,025, failed and refused to further comply with
the contract or to pay anything more thereon.
Defendant said plaintiff ought to take nothing by his suit, and
prayed judgment for the sum of $1,700 and for foreclosure of its
mortgage lien. Together with its answer, defendant filed its
cross-complaint, setting up the facts in detail and praying for
judgment in the sum of $1,700, and interest, and for a decree
establishing its mortgage lien on the property, and for foreclosure
and sale, and such further relief as equity might require.
Subpoena on the cross-complaint was issued and served May 13,
1902.
June 20, 1902, plaintiff moved to transfer the cause to the law
docket, and on that date the following order was entered of
record:
"Complainant coming and asking that the original bill of
complaint be dismissed without prejudice, and it appearing
Page 194 U. S. 143
to the court that said request should be granted, it is
therefore ordered that the original bill of complaint herein be and
the same is hereby dismissed without prejudice to the right of the
plaintiff to proceed further on the cause of action set forth in
said bill hereafter as he may be advised. It is further ordered
that the costs of the original bill and proceedings thereon herein
be adjudged against complainant, for which execution may
issue."
July 24, 1902, plaintiff, as defendant in the cross-complaint,
filed his plea thereto, in which he averred that the original bill
filed by him had been dismissed, and that the cross-bill was not
within the jurisdiction of the court because the amount sought to
be recovered did not exceed $2,000, exclusive of interest and
costs. February 13, 1903, the plea to the jurisdiction of the court
was argued and overruled, and plaintiff, defendant in the
cross-bill, was ordered to file an answer to said cross-bill on or
before the rule day of the court occurring in April, 1903. No
further answer or plea to the cross-bill having been interposed by
the defendant therein, a decree
pro confesso was rendered
against him April 21.
On May 27, 1903, the court rendered a decree on the cross-bill,
which recited the various proceedings; found the allegations of the
cross-complaint and exhibits to be true; that Kirby was justly
indebted to the American Soda Fountain Company in the sum of
$1,700, with interest, and that a valid mortgage lien to secure
that sum existed, and decreed payment of the amount within sixty
days, and that, if not paid, the property should be sold and the
proceeds applied, with judgment for deficiency, if any.
An appeal from this decree was prayed and allowed, and the
question of jurisdiction was certified. The case came on in this
Court on motions to dismiss or affirm.
Page 194 U. S. 144
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
This case was brought directly to this Court on a certificate of
jurisdiction under section five of the Judiciary Act of March 3,
1891, and might therefore have been advanced under Rule 32. The
motions to dismiss or affirm may be treated as equivalent to
submission under that rule, but as the motions were made, and the
motion to dismiss was chiefly rested on the ground that the value
of the matter in dispute was not sufficient to give this Court
jurisdiction, we think it proper to say that
"the act of 1891 nowhere imposes a pecuniary limit upon the
appellate jurisdiction, either of this Court or the circuit court
of appeals, from a district or circuit court of the United
States."
The Paquete Habana, 175 U. S. 677,
175 U. S.
683.
On this appeal, no question of error in matter of equity
procedure in the retaining of the cross-bill after the dismissal of
the bill is open for consideration, but we do not intimate in the
slightest degree that any error in that particular was committed.
Chicago, M. & St.P. Railway Company v. Third National
Bank, 134 U. S. 276;
Daniell, Ch. Pr. (5th ed.) 1553, note; Bates Eq.Proc. §
386.
The contention is that the circuit court had no jurisdiction as
a court of the United States to proceed on the cross-bill because
of the lack of the prescribed jurisdictional amount. But we think
the circuit court was right in rejecting this contention and in
overruling the plea.
In the first place, the whole record being considered, the value
of the matter in dispute might well have been held to exceed two
thousand dollars, exclusive of interest and costs.
Stinson v.
Dousman, 20 How. 461,
61 U. S. 466;
New England Mortgage Company v. Gay, 145 U.
S. 123,
145 U. S. 131;
Shappirio v. Goldberg, 192 U. S. 232;
Lovell v. Cragin, 136 U. S. 130.
In
Stinson v. Dousman, the suit was brought to recover
something less than five hundred dollars as rent of a parcel of
land under a written contract for the purchase of the land
Page 194 U. S. 145
at eight thousand dollars, which provided that the covenantee
should pay rent on failure to comply with sundry conditions
prescribed, and defendant not only set up in his answer a defense
to the claim for rent, but also sought a decree affirming the
contract as outstanding. It was objected in this Court that the
matter in dispute was not of the value of one thousand dollars, and
that therefore there was no jurisdiction. Mr. Justice Campbell
said:
"The objection might be well founded, if this was to be regarded
merely as an action at common law. But the equitable as well as the
legal considerations involved in the cause are to be considered.
The effect of the judgment is to adjust the legal and equitable
claims of the parties to the subject of the suit. The subject of
the suit is not merely the amount of rent claimed, but the title of
the respective parties to the land under the contract. The contract
shows that the matter in dispute was valued by the parties at
$8,000. . . . We think this Court has jurisdiction."
The case is cited and considered in
New England Mortgage
Company v. Gay and in
Shappirio v. Goldberg.
In
Lowell v. Cragin, it was held as correctly stated in
the headnotes:
"When the matter set up in a cross-bill is directly responsive
to the averments in the bill, and is directly connected with the
transactions which are set up in the bill as the gravamen of the
plaintiff's case, the amount claimed in the cross-bill may be taken
into consideration in determining the jurisdiction of this Court on
appeal from a decree on the bill."
In the present case, the circuit court in its decree referred to
the plaintiff's bill and the relief thereby sought, in connection
with the cross-bill, and, we think, was justified in doing this, as
the record had not passed from under its control, and it was
apparent that the decree on the cross-bill disposed of the
contention of plaintiff in respect of the cancellation of the
contract. Taking the bill, defendant's answer, and the cross-bill
together, the jurisdictional amount was made out.
In the second place, it is the general rule that, when the
jurisdiction of a circuit court of the United States has once
attached,
Page 194 U. S. 146
it will not be ousted by subsequent change in the conditions.
Morgan v.
Morgan, 2 Wheat. 290;
Clarke
v. Mathewson, 12 Pet. 165;
Kanouse v.
Martin, 15 How. 198,
56 U. S. 208;
Roberts v. Nelson, 8 Blatchf. 74;
Cooke v.
United States, 2 Wall. 218.
In
Morgan v. Morgan, it was laid down by Chief Justice
Marshall that the jurisdiction of the circuit court, having once
vested between citizens of different states, could not be divested
by a change of domicil of one of the parties, and his removal into
the same state as the adverse party
pendente lite. This
was so ruled in
Clarke v. Mathewson and other cases there
cited.
In
Kanouse v. Martin, after petition to remove had been
filed and bond tendered, the state court allowed the plaintiff to
reduce the matter in dispute to less than the jurisdictional
amount, and went on with the case. This was necessarily held to be
erroneous, but the observations of Mr. Justice Curtis show that, in
his opinion, the general rule to which we have referred also
applied, and he cites
Morgan v. Morgan and
Clarke v.
Mathewson.
In
Roberts v. Nelson, the amount claimed was reduced
after the case had been removed, and Mr. Justice Blatchford, then
district judge, held that the jurisdiction of the court having once
attached, no subsequent event could divest it.
In
Cooke v. United States, Mr. Chief Justice Chase said
that "jurisdiction once acquired cannot be taken away by any change
in the value of the subject of controversy."
This action, when brought in the state court, was an action to
recover $1,500 damages for deceit. Defendant demurred to and
answered the original petition. Plaintiff subsequently filed his
amended petition seeking to be relieved of the obligation to pay
$2,025, and damages in the sum of $2,500. The matter in dispute
having thus been made to exceed the sum or value of two thousand
dollars, exclusive of interest and costs, defendant presented his
petition and bond for removal, and the cause was thereupon removed.
The jurisdiction thus acquired by the circuit court was not
divested by plaintiff's subsequent action.
Decree affirmed.
