Brown v. Trousdale , 11 S. Ct. 308 ( 1891 )

138 U.S. 389 (1891)

BROWN
v.
TROUSDALE.

No. 158.

Supreme Court of United States.

Argued January 22, 23, 1891. Decided February 2, 1891. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF KENTUCKY.

Mr. T.W. Brown for appellants.

Mr. D.M. Rodman for appellees.

MR. CHIEF JUSTICE FULLER, after stating the case, delivered the opinion of the court.

The main question at issue was the validity of the bonds, and that involved the levy and collection of taxes for a series of years to pay interest thereon and finally the principal thereof, and not the mere restraining of the tax for a single year. The grievance complained of was common to all the plaintiffs and to all whom they professed to represent. The relief sought could not be legally injurious to any of the tax-payers of the county, as such, and the interest of those who did not join in or authorize the suit was identical with the interest of the plaintiffs. The rule applicable to plaintiffs, each claiming under a separate and distinct right, in respect to a separate and distinct liability and that contested by the adverse party, is not applicable here. For although as to the tax for the particular year, the injunction sought might restrain only the amount levied against each, that order was but preliminary, and was not the main purpose of the bill, but only incidental. The amount in dispute, in view of the main controversy, far exceeded the limit upon our jurisdiction, and disposes of the objection of appellees in that regard.

As the plaintiffs sought to restrain the collection of taxes already levied, and any further levies by the county judge, and also a decree adjudging the invalidity of the bonds, the sheriff, who was about to enforce the collection, and the county judge, were necessary parties to the bill as framed, as were the bondholders, whose interests were directly affected. There is nothing to show that the latter were so numerous as to render it impossible to bring them all before the court, and we need not discuss the proper course to be pursued in such a contingency. The plaintiffs made two of the bondholders residing in Kentucky, representing, the one the original, and the other the new, bonds, parties defendant, and averred that they did not know the names of the other holders of the bonds and asked for notice to be given to the unknown bondholders. Before that notice had been directed by the court, or the names of the other bondholders had been ascertained and steps taken to bring them in, the two non-resident bondholders voluntarily became parties to the proceedings, and thereupon the case was removed upon their application. And while the two Kentucky bondholders, on the day of the order of removal, withdrew the motion to dissolve and the demurrer, so far as they were parties thereto, and declared that they had no defence to make to the bill, because, as alleged in their affidavits, they believed that the justice of the cause was with the plaintiffs, and they, therefore, did not choose to resist in the premises, denying at the same time all collusion, yet this is not a controlling circumstance, in view of the frame of the bill.

Such being the attitude of the case, we are of opinion that the motion to remand should have been granted. The removal was had under the act of March 3, 1875, (18 Stat. 470,) but cannot be sustained under the first clause of the second section of that act, as the controversy was not between citizens of different States, unless the parties could be so arranged on the opposite sides of the matter in dispute as to bring about that result; nor, under the second clause of the section, unless there existed a separable controversy wholly between citizens of different States, and which could be fully determined between them.

In Harter v. Kernochan, 103 U.S. 562, 566, this court said: "Disregarding, as we may do, the particular position, whether as complainants or defendants, assigned to the parties by the draughtsman of the bill, it is apparent that the sole matter in dispute is the liability of the township upon the bonds [described in the bill]; that upon one side of that dispute are all of the State, county and township officers and taxpayers, who are made parties, while upon the other is Kernochan, the owner of the bonds whose validity is questioned by this suit. He, alone, of all the parties, is, in a legal sense, interested in the enforcement of liability upon the township. It is, therefore, a suit in which there is a single controversy, embracing the whole suit, between citizens of different States, one side of which is represented alone by Kernochan, a citizen of Massachusetts, and the other by citizens of Illinois." There the bonds were all owned and held by Kernochan, while here they are in large part held and owned by citizens of Kentucky. If this case admitted, then, of so arranging the parties as to put the county officers and taxpayers on one side of the controversy and the bondholders on the other, still the cause would not be susceptible of removal, under the first clause.

Was there, then, a separable controversy wholly between citizens of different States, and that a controversy which could be wholly determined between them? "The case," said Mr. Chief Justice Waite, in Fraser v. Jennison, 106 U.S. 191, 194, "must be one capable of separation into parts, so that in one of the parts a controversy will be presented with citizens of one or more States on one side and citizens of other States on the other, which can be fully determined without the presence of any of the other parties to the suit as it has been begun." Testing the right of removal by the case as made by the present bill, and as it stood at the time of removal, it was a case against all the bondholders, in respect to whom it was not denied that a large number were citizens of Kentucky, upon a cause of action not susceptible of division.

The plaintiffs were not prosecuting an action against individual bondholders for the cancellation of individual bonds. They were attacking the validity of the entire subscription and seeking a decree which would invalidate the entire issue. The petitioners were out of the jurisdiction, and if they had remained so would not have been concluded. The federal courts were open to them for the pursuit of the remedies which the law afforded. When they voluntarily submitted themselves to the jurisdiction of the state court, they became so associated with the resident bondholders as to render it impossible for them to contend that the controversy which involved all was separable as to them, and that they were thereby enabled to transfer the particular suit, as it affected all the defendants, to the Circuit Court.

The decree is reversed, and the cause remanded, with directions to remand it to the state court.