DI BE IOWA & MINNESO'L'A OONSTRUOTION 00.
In re IOWA & MINNESOTA CONSTRUOTION Co.
B00NE and another v. IOWA & MINNESOTA CONSTRUCTION Co. and others.
(Oircuit Oourt, D.lo'llJa, N. D. January, 1882.)
OF CAUSE-WHO MAy-INTERVENORS.
Where the intervening petition charges fraud, and is not in t.he nature of a bill, charging errors or irregularities merely, or where it charges want of jurisdiction and want of notice to complainants, and where no attack is made on any final judgment, but only on interlocutory orders, still within the control of the state court, intervenors may remove the cause.
Where there has been no final trial or hearing, intervenors may remove the cause on the ground of local prejudice, on compliance with the prOVisions of the act of congress.
The filing of the petition in the state court ipso facto removes the cause. 4.
SAllE-RIGHT OF REMOVAL-RECEIVER.
The petition of intervention is in the nature of a suit for relief as against defendants therein named, and the right of removal is not affected by the fact that a receiver had been appointed by the court to wind up the affairs of the corporation. IS.
SAME-RIGHT OF INTERVENORS.
The right of intervenors to a preliminary injunction to rest.rain further pro· ceedings until there can be a hearing on the merits, follows as a matter of course.
Motion to Remand. MCCRARY, C. J. That the intervening petition, filed in this case in the state court by George Boone and Francis E. Hinckley, presents a controversy between citizens of Illinois on one side and. citizens of Iowa on the other side, is conceded. But it is insisted that the case was, nevertheless, not removable, because the petition of intervention is a supplementary proceeding, so connected with the original proceeding as to form an incident to it, and substantially a continuation of it. To determine whether or not this is so we must look to the record. The proceedings in the state court were instituted in 1875 by a petition presented by L. Schoonover, trustee, alleging that he was a judgment creditor of the said Iowa & Minnesota Construction Company, and stating the names of the stockholders in that corporation, with the sum subscribed by each. He alleged the insolvency of the corporation, and prayed the appointment of a receiver. This v.l0,no.4-26
application was set down for hearing at the March term, 1875, and notice to the stockholders was ordered to be served by publication in It, newspaper, and by sending the same through the mail. At thE! said March term, notice having been so given, the said L. Schoonover was appointed receiver, and authorized to dispose of the assets, collect the assessments from stockb.olders, and to pay the debts. There was no appearance for the stockholders. The court from time to time thereafter ordered assessments upon the stock to be made and .collected, and the receiver from time to time reported as to his doings, and the proceedings were still pending and undisposed of in the state court, when, on the seventh day of November, 1881, the said Boone and Hinckley appeared for the first time, and filed therein their peti.tion of intervention, by which they aHege in substance that they are, .andhave ever since the commencement of said proceedings been, residents and citizens of Illinois, and that they have had no notice of said proceedings. They aver that a certain large claim against the corporation, held by one Stacy, for whom the said Schoonover, the receiver, is assignee, is fr\ludulent; and that the said Schoonover has not defended against it; and that Stacy is in fact largely indebted to ;,he incorporation. Fraud·,.collusion, and conspiracy are charged;· and the prayer is that there may be accounting as between Stacy and the corporation, and that the receiver may be enjoined from proceeding, by suits at law or otherwise, to from the iqterveuqrstheir unpaid stock, and applying the same to the payment of the alleged fraudulent claim of Stacy; also that the order appointing said Schoonover as receiver be set aside. The rule by which we are to be 'guided in determining whether this is a removable!'controversy has been settled by repeated adjudications of the suprerilecourt, and is 'as :follows :
"This court cannot entertain jurisdiction to set aside the jtJ.dgment of lltate court for mere irregularity, or in a case where the proceeding' is merely t<tntamount to th'e common-law practice of moving to set aside' a judgment for irrl?gularity, or to a writ of error, a'· bill of review, or an appeal ; but 'it has jurisdiction :of a bill·to set aside a judgment for fraud, or upon,t}le ground t hat it was rendered by a court having no jurisd,icLion." Gain6/J'v. Fuentes, 92 u. S.10::Blll'rOn v. Hunton, 99 U. S. ..
That the removal' brthe case is riot prohibited by the doctrine 1tnnouuced in these cases is clear'ror several 'reasons: . '. ':
(1) The intervening petition charges fraud, and is, not, in the 'nature of tlie bill charging error or irregularities merely. (2) .It want -of jurisdiction, and that the proceedings complained of have been 1fad with-
IN BE IOWA & MINNESOTA CONSTRUCTION 00.
out notice to complainants. For the purposes of the present motion I suppose this must be taken as true. (3) The intervenors do not attack any final jUdgment of the state court, but only the interlocutory orders made from time to time, and which, at the,time of the intervention, were still within the control of the state court.
Another consideration, however, is still more conclusive of the question. The petition for removal is not based entirely upon the citizeuship of the parties. It charges local prejudice, and prays removal upon that grol,lnd also. Now, if we consider the proceeding in the state court from the beginning as one suit, and also assume that the intervenors had notice, and were proper parties, still it is clear that there has never been a final trial or hearing, and that, therefore, the petition far removal, upon the ground of local prejudice, is in time, and perfectly ,good. It may be that, if these assumptions are found upon investigation to be correct, we may be constrained to hold the intervenors bound by some of the orders of which they complain, unless they can successfully attack them fo-r fraud j but, however this may be, the light of removal is clear. We are not called upon, in passing upoD:that question, to what the ultimate judgment may be upon, the issues presented. It is enough that the parties are citizens of different states; that the amount involved exceeds $pOO, e,xclusive of costs; that the proper affidavit of prejudice is filed; and that the cause had not been finally tried or determined when the petition for removal filed. All these conditions we find fulfilled. It reUlainsto consider the question whether the were partiea to the suit in, the state court at the time they their peti. tion and bond for, removal. I suppose the theory of the rece.ivex of ,sucll creditors ,as sustain his action is, that the intervenors have been the beginlling by virtue of the publication of notice' or sending thereof the mails, or both. If this be ,so, that end of on this point j but the intervenors deny this, and assert thWi they never were parties nntil they made themselves such by filing ,their petition of intervention; and upon this theory the c<,mnsel tor the receiver insist that they had no right to intervene with<;>utleaveof,court, was not obtained, and that they were, parties. The right to intervene, under the .Codeof is given absolutely alld without condition to "any persoll who has an interest in the litigation," whether 4e be interested in cess of 0nfj.or other party to the action, or against both. ,:God,e
The manner of the intervention is provided by the same Corle, § 2685, as follows:
"The intervention shall be by petition, which must set forth the facts 011 which the intervenor rests, and all the pleadin,qs therein shall be governed by the same princip7es provided fOT in t7ds chapter. But if such petition is filed during the term, the court ,shall direct the time in which an answer shall be filed thereto."
No action by the court seems to be necessary to an intervention. The party who intervenes appears to have the same right to file his petition of intervention that the origjnal plaintiff had to commence his suit. There is no provision for obtaining leave of court, and as he may file his petition at any time, "either before or after issue has been joined in the cause," it is clear that he may file it during a vacation, and therefore necessarily without leave of court. If filed during term the court shall direct the time in which the answer shall be filed. This is upon the supposition that the adverse parties are present, and are ad vised of the filing. If filed in vacation there is no provision as to the time of' answering, e;xcept that it shall be governed by the rules prescribed for pleading in other cases. I think the intervenors correctly construed this provision as authorizing the service of notice to the adverse parties requiring an answer at the next term as in cases of original suits, This ruling is not in conflict with anything to be found in the ease of Barkdull v. Callanan, 33 Iowa, 391. In that case a petition of intervention was filed in vacation, and the court distinctly say that such filing was "authorized by section 2932 of the Revision," which is the same as section 2685 of the Code of 1873, above quoted. The petition for intervention was afterwards, upon notice, stricken out, and leave to refile was refused. The court' say: "\Ve cannot determine the correctness of this ruling, for nuexception was taken to it." There was a motion for change of venue, which was overruled; and the court say, properly, "because her petition of intervention had been stricken from the files," and she was, therefore, not a party. The case does not hold that leave of court is necessary to the filing of a petition of intervention, but, on the contrary, holds that such a petition may be filed in vacation, and therefore impliedly holds that it may be done without such leave. A question is made as to whether it was necessary for intervenors to present their petition for removal to the state court. If this were a new question I should have grave doubts upon it; but it seems to be settled that the filing of a proper petition in the state court ipso
IN RE IOWA & MINNESOTA CONSTRUCTION CO.
facto removes the cause. Osgood v. R. Co. 2 Cent. L. J. 273; Merchants', etc., Bank v. Wheeler, 13 Blatchf. 218; Connor v. Scott, 4 Dill. 242; Article on Removal of Causes, 2 Cent. L. J. 730, and cases cited. It has been suggested that this proceeding was not a suit in the state court within the meaning of the acts of congress, and therefore not removable. I am, however, of the opinion that the petition of intervention is in its nature a suit wherein the intervenors seek relief as against the defendants therein named, and the right of removal in sU,ch a case is not affected by the that the state court had appointed areceiver who was proceeding to wind up the affairs of the corporation. Osgood v. R. Co. 2 Cent. L. J. 273. If we assume that the subject matter of the controversy was in the possession of the court, the right of removal still remains, as was distinctly held by the supreme court in Kern v. Huide1coper, 103 U. 8. 485, (see pp. 490, 491.) The motion to remand must be overruled. The question of the right of the. intervenors to an injunction to l;estrain further proceedings until there can be a hearing upon its merits, was not discussed by counsel at the hearing, ,but I suppose the granting of that application follows as a matter of course. 'fhere would be no propriety in our entertaining jurisdiction of the case made by the intervening petition, and refusing to restrain the receiver from disposing of the estate and paying the debts now alleged to be fraudulent. A temporary injunction may therefore issue to restrain the defendant named in the petition of intervention, as therein prayed, until further order of the court, upon the intervenors giving bond with the usual condition, in the sum of $2,000, with sureties to be approved by the clerk.
BUFORD JOHN DERE BOYD,
CO. 'IJ. STBOTHEtl CO.
Adm'r, etc., v.
Uourt, D. Iowa. November Term, 1881. )
1. REMOVAL OF CAUSE AFTER JUDGMENT.
Where a supplemental proceeding is a mere mode of execution or relief inseparably comiected with the original judgment or decree, it cannot be removed; although some new controversy or issue between plaintiff in the original action and a new party may' arise out of the proceeding. But where such proceeding is not a mere mode of execution or relief, but involves an independent controversy with a new or different party, it may be removed into th<; federal court. .
SAME-CAUSE, WHEN REMANDED.
Where the plaintiff in a suit in a state court obtained judgment against defendant, garnished certain .parties, and, after taking issue upon the answer of the garnishees, removed the issues thus made to the circuit court of the United Statcs, held,· on motion by the original defendant and the garnishees to remand the .ClI,use, that the motion be maintained, on the ground that the pro· ceedings are a. mere mode .of execution or. relief, inseparahly connected with the OrigiUlil jurlgment. .
SAME-MOTION TO HEMAND, WHEN DENIED·
.In an·action in the state court against a corporation, incorporated under the laws of the state of Iowa, the plaintiff obtained judgment, and, uT/oua return of the execution unsatisfied, he proceeded against certain stockholders in the corporation under the provisions of chapter 181, title 9, of the court, and removed these proceedings into the. circuit court of the United States: Held, onmotion to rl3maJ1d, that the. motion be denied, on the ground that Ituch proceedingsinvolve an independent controversy with new parties, against whom the plaintiff seeks to establish a new linbility.
Motion to Remand. Reed &; Marsh and Willett &; Willett, for the motion. Martin, Murphy &: Lynch and Brown d; Wellington, contra. LOVE, D. J. The foregoing cases are now before us upon motions to remand the same to the state courts from which they were brought into this court. The motions to remand are all placed by counsel upon the same general grounds. It is insisted as to each of these cases that it is a proceeding supplemental to the original cause out of which it grew, and being a mere appendage to the judgment rendered in the original case it cannot be separated from the same and brought for adjudication here. These several motions may therefore be considered together.