218 US 312 In Re Metropolitan Trust Company of the City of New York
218 U.S. 312
31 S.Ct. 18
54 L.Ed. 1051
IN RE METROPOLITAN TRUST COMPANY OF THE CITY OF NEW YORK.
No. 12, Original.
Argued October 11, 1910.
Decided November 14, 1910.
This is an application by the Metropolitan Trust Company of the City of New York, which had been impleaded as a defendant in the suit of Pollitz v. Wabash R. Co. for a writ of prohibition or mandamus, directed to the circuit court of the United States for the southern district of New York, to forbid the exercise of jurisdiction over the petitioner and over a decree dated January 10, 1908, in its favor in said suit, and in the alternative to provide that any order for the vacating of said decree should be set aside. A rule to show cause was issued, to which return has been made, and from the petition and return the following facts appear:
On or about January 15, 1907, James Pollitz brought suit in the supreme court of the state of New York against the Wabash Railroad Company and others to declare illegal and void certain securities of the railroad company, issued in exchange for debenture bonds, pursuant to a plan complained of as injurious to the stockholders, and for a re-exchange, and, in default thereof, for an accounting by the defendants with respect to the new securities which had been issued.
On January 25, 1907, the railroad company caused the case to be removed to the circuit court of the United States for the southern district of New York, on the ground that there was a separable controversy between it, as a citizen of the state of Ohio, and the complainant, a citizen of the state of New York.
The complainant moved to remand the cause, and on February 21, 1907, the motion was denied. Thereupon application was made to this court for a writ of mandamus to compel the remand, and the petition was denied. Re Pollitz, 206 U. S. 323, 51 L. ed. 1081, 27 Sup. Ct. Rep. 729.
After the removal of the cause, the defendants demurred to the bill of complaint, the trust company demurring separately, and all the demurrers were overruled, save that of the trust company, which was sustained. A decree was entered on January 10, 1908, which, after overruling the other demurrers, provided as follows:
'Ordered, adjudged, and decreed, that the demurrer of the defendant the Metropolitan Trust Company of the City of New York, be, and the same hereby is, sustained, and that the bill of complaint be, and the same hereby is, dismissed as to the defendant the Metropolitan Trust Company of the City of New York, with costs.'
The defendants other than the trust company then answered. An earlier suit, to which the trust company was not a party, was pending in the same court, with regard to the same transaction, and the court, denying the motion of the complainant for leave to discontinue the first suit, ordered the suits to be consolidated. After hearing, a final decree was entered on February 23, 1909 [167 Fed. 145], dismissing the bill in each suit upon the merits.
The complainant then appealed to the circuit court of appeals, but no review was sought of the decree of January 10, 1908, dismissing the bill in the second suit as against the trust company; and the trust company was not cited and did not in any way become a party to the appeal.
On February 8, 1910, the circuit court of appeals decided that there was not a separable controversy between the complainant and the railroad company, and that the motion to remand should have been granted. The court accordingly reversed the final decree, with direction to the circuit court to permit the complainant to discontinue the first cause, and to remand the second cause to the supreme court of the state of New York. [100 C. C. A. 1, 176 Fed. 333.]
Thereupon, on February 28, 1910, an order for remand was entered in the circuit court, which contained the following provision as to the trust company:
'And it appearing that the defendant Metropolitan Trust Company duly demurred to the complaint, and that such demurrer was sustained and judgment entered January 10, 1908, dismissing the complaint as to said defendant, which has not been appealed from or reversed,
'Ordered, adjudged and decreed that this judgment remanding said cause to the supreme court of the state of New York shall not apply to said defendant Metropolitan Trust Company.'
On March 21, 1910, the complainant moved in the circuit court to vacate the decree entered January 10, 1908, and to remand the cause as to the trust company. The latter appeared specially and objected to the jurisdiction of the court. The court granted the motion to vacate the decree, and denied the motion to remand the cause as to the trust company, without prejudice, upon the ground that the application for such relief should be made to the judge who entered the order to remand as to the other defendants. [180 Fed. 950.]
The trust company then applied to this court for a writ of prohibition or mandamus, as stated.
Mr. Tompkins McIlvaine for petitioner.
Mr. J. Aspinwall Hodge for respondent.
Statement by Mr. Justice Hughes:
[Argument of Counsel from pages 316-318 intentionally omitted]
Mr. Justice Hughes, after making the foregoing statement, delivered the opinion of the court:
When the complainant moved to remand the cause, the circuit court had jurisdiction to determine whether or not a separable controversy existed which justified the removal from the state court. Its decision was an act within its judicial authority, subject to review upon appeal after final decree. On the application made to this court in Re Pollitz, 206 U. S. 323, 51 L. ed. 1081, 27 Sup. Ct. Rep. 729, for a writ of mandamus to compel the remand, the court said (pages 331, 333):
'The issue on the motion to remand was whether such determination could be had without the presence of defendants other than the Wabash Railroad Company, and this was judicially determined by the circuit court, to which the decision was by law committed.
'The application to this court is for the issue of the writ of mandamus, directing the circuit court to reverse its decision, although in its nature a judicial act, and within the scope of its jurisdiction and discretion.
'But mandamus cannot be issued to compel the court below to decide a matter before it in a particular way, or to review its judicial action had in the exercise of legitimate jurisdiction, nor can the writ be used to perform the office of an appeal or writ of error.
* * * * *
'If the ruling of the circuit court was erroneous, as is contended, but which we do not intimate, it may be reviewed after final decree on appeal or error. Missouri P. R. Co. v. Fitzgerald, 160 U. S. 556, 582,' 40 L. ed. 536, 542, 16 Sup. Ct. Rep. 389. See, also, Ex parte Nebraska, 209 U. S. 436, 52 L. ed. 876, 28 Sup. Ct. Rep. 581; Re Winn, 213 U. S. 458, 468, 53 L. ed. 873, 877, 29 Sup. Ct. Rep. 515; Chesapeake & O. R. Co. v. McCabe, 213 U. S. 207, 53 L. ed. 765, 29 Sup. Ct. Rep. 430.
Having decided to retain the cause, the circuit court proceeded, as it was entitled to proceed, to try the issues. It heard the demurrers to the bill, and, overruling the others, it sustained that of the Metropolitan Trust Company. No leave was granted to amend the bill, and a decree was entered dismissing it as against the trust company. When, after final decree dismissing the bill as against the other defendants, the complainant appealed to the circuit court of appeals, the decree in favor of the trust company was not brought before the appellate court for review, and the trust company was not a party to the appeal.
The decision of the circuit court of appeals, in reversing the final decree, and in directing the remand to the state court, was, of course, subject to the necessary limitation that it could apply only to the parties who had been brought before that court. It had no other purport. It is one of 'the ordinary rules respecting appeals' that 'all the parties to the record, who appear to have any interest in the order or ruling challenged, must be given an opportunity to be heard on such appeal.' Davis v. Mercantile Trust Co. 152 U. S. 590, at page 593, 38 L. ed. 563, 564, 14 Sup. Ct. Rep. 693, 695. See also Terry v. Abraham (Terry v. Merchants' & P. Bank) 93 U. S. 38, 23 L. ed. 794; Wilson v. Kiesel, 164 U. S. 248, 251, 41 L. ed. 422, 423, 17 Sup. Ct. Rep. 124. If a party has not had this opportunity, he is not bound; as to him an essential element of appellate jurisdiction is lacking. Accordingly, when decree was entered in the court below upon the mandate of the circuit court of appeals, the trust company was expressly excepted from its operation.
It is in this light that the subsequent proceeding in the circuit court must be examined. If that court had jurisdiction to vacate the decree of January 10, 1908, in favor of the trust company, it was by virtue of its own control over the decree, and not by force of the mandate of the appellate court. Nor could the court exercise the general power which it possesses to modify or set aside its orders or decrees prior to the expiration of the term at which the final decree is entered; for in this case that term had ended before the motion was made. Cameron v. M'Roberts, 3 Wheat. 591, 4 L. ed. 467; Sibbald v. United States, 12 Pet. 488, 9 L. ed. 1167; Bronson v. Schulten, 104 U. S. 410, 415, 26 L. ed. 797, 799; Ayres v. Wiswall, 112 U. S. 187, 190, 28 L. ed. 693, 694, 5 Sup. Ct. Rep. 90; Phillips v. Negley, 117 U. S. 665, 674, 29 L. ed. 1013, 1015, 6 Sup. Ct. Rep. 901. The motion was not made for the purpose of correcting a clerical error or an inadvertence. After the term had expired, and after the complainant had exercised his right of appeal to procure a review of the errors of which he desired to complain, it was sought to set aside a decree which stood unreversed, and by which the trust company had been dismissed from the cause.
To reach this result, the circuit court asserted the power to vacate the decree upon the ground that it had been rendered without jurisdiction; and the court held that it must be treated as a nullity. But the decree cannot be so regarded unless the court, upon the motion to remand, was without jurisdiction to determine whether a separable controversy existed, and hence not merely committed error, but exceeded its authority. The decree was not a nullity unless the order refusing to remand was a nullity; and the latter contention was negatived by the decision of this court upon the application for a writ of mandamus in Re Pollitz, supra. The reversal by the circuit court of appeals of the final decree as to the other defendants, and its direction to remand, did not make the decision of the court of first instance any the less 'a judicial act, and within the scope of its jurisdiction and discretion;' and as that reversal and direction did not affect the trust company, the decree in its favor remained in full force.
The question is not with respect to the mere form of the application which was made to the circuit court for the purpose of setting the decree aside. When the motion was made, the court was without jurisdiction to vacate the decree. As the court, in granting the motion, exceeded its power, mandamus is the appropriate remedy. Ex parte Bradley, 7 Wall. 364, 19 L. ed. 214; Re Winn, 213 U. S. 458, 53 L. ed. 873, 29 Sup. Ct. Rep. 515.
The rule is made absolute and the writ of mandamus awarded.