I have given t.his subject long and patient examination in view of the vast interests and the importance of the question, and, against my first impressions, I have been forced to the conclusion I have thus announced. I appreciate fully what counsel urge of the difficulties which, as they say, such a construction will place in the way of their reliance upon the protection of the federal constitution; but, notwithstanding these difficulties, back of all the statutes, and 'all the litigation in the state, stands that high tribunal, the federal supreme court, which will ultimately determine and fully protect all rights guarantied to the defendant by the federal constitution. The motion to remand will be sustained. The same order will be entered in all the cases of a similar nature now pending in this court. Judge SHIRAS concurs in the foregoing opinion. no opinion. Judge
N. O. & T·. P. Ry.
(CirCUit Court, No D. Ten7/-e88ee, E. D. January 21,1889.) 1.
REMOVAL 011' CAUSES-CITIZENSHIP-TIME all' ApPLICATION.
Under the removal act of March 3, 1887, authorizing the defendant to filehis application on the ground of diverse citizenship in the state court at any time before he is required to plead or answer the complaint, where, on the 'last day of the term of the state court, and after the time to answer or plead, the complaint is amended, demaI\ding $10,000, instead of $2,000. a petition for removal to th-e federal court before the next term of the state court is filed: in time.! Under the clause relating to removal for "local prejudice or influence, "theapplication must be made to the federal court, and may be made at any time before final hearing in the state court.!
SAME-EXISTENCE OF PREJUDICE.
The existence of "local prejudice or influence " is not a jurisdictional fact, so as to entitle the adverse party to put it in issue for formal trial, and it is sufficient if it is made to appear to tho, federal court by petition and affidavit.a
On Motion to Remand. Action by W. G. Huskins against the Cincinnati, New Orleans & Texas Pacific Railway Company for. personal injuries. Washburn Templeton, for plaintiff. Lewis Shepherd, for defendant.
KEy, J. The plaintiff began an nction in the state court for personal injuries against the defendant. The cause was removed to this court,
1 Concerning the proper time for flling an application for removal of a cause from a state to a federal court, see Kennedy v. Ehlen, (W. Va.) 8 S. E. Rep. 59!!, and cases cited j Wedekind v. Southern Pac. Co., 86 Fed. Rep. 279. · As to how prejudice or looal influence warranting removal of a oause from a state to a federal court must be made to appear, see Malone v. Railroad Co., 35 Fed. Rep. 625, and note; Southworth v. Reid, 86 Fed. Rep. 451.
HUSKINS 17. CINCINNATI, N. O. & T. P. RY. CO.
and, while the judge was charging the jury upon its trial, plaintiff's counsel were permitted to take a nonsuit. Soon thereafter plaintiff instituted another suit against the defendant in the state court for the Same cause of action. In this last suit he laid his damages at $2,000. The cause was returnable to the April term, 1888, at which time, under the laws of the state, the pleadings should be made up and issue joined. The first tdal term of tbe cause was August, 1888. At that term tbe defendant had permission to file an additional plea. After this was done, and on tbe last day of tbe term, plaintift', by permission of the court, increased bis claim for damages to $10,000, and continued the cause to the next term. Before tbe next term oftbe court the·defendant filed its petition for the removal of the cause to this court, and presented it for action to tbe state court, at its next session, December, 1888. Tbis petition asked for removal upon two grounds: (1) Tbe diverse citizenship uf the parties; (2) upon tbe existence of local prejudice and influence. The state court ordered the removal upon the first ground, and bas made no reference to the second ground. The defendant, upon the first day of tbe present term of tbis court, presented its petition, and along with it an affidavit in its support, both averring in positive terms tbat "from prejudice or local influence defendant will not be able to obtain justice in the state court, or in any other state court to which the defendant might remove the cause under the laws of tbe state, because of prejudice or local influence." Defendant asks the court to remove the cause from the state court to this court, under the provisions of the fourtb clause, section 2, of the act of March 3, 1887. Plaintiff has filed an answer to this petition, denying the truth of its allegations and averments as to local prejudice, and has accompanied this answer with a considerable number of affidavits of intelligent and respectable persons strongly sustaining this answer. Plaintiff moves to remand tbe suit to the state court,-First, because the application for removal upon the ground of diverse citizenship came too late; and, second, because it is shown that the local prejudice Or influence on account of which a removal is asked does not exist. There is no question but tbat the application for removal came after the term of the 'court at which by the state law and rule of the court tbe defendant was required to answer or plead to the declaration or complaint Qf the plaintiff. Up to the close of the term at which the cause could first have been tried, the defendant had no right or power to remove the cause for diverse citizenship, because the plaintiff did not claim more than $2,000. The question is, can a plaintiff prevent, under the law, the jurisdiction of the circuit court of the United States by commencing his suit, claiming $2,000 or less, joining issue at the return term with his adversary, and at the trial term, or some later period, amend bis writ by increasing his claim to a sum within the jurisdiction of the federal court? 'The plaintiff is a citizen of this state; the defendant, of Ohio. The language of the act of 1887 is clear in regard to the time when the removal must be made for this character of citizenship. "He may make and file :a petition in such suit in such state court at the time or any time before the defendant is required by the laws of the state or the rule of the state
court in which such suit'is brought to answer or plead to thedeclaratioD or complaint oftha plaintiff." There is no room 'for construction here. All is clear and unambiguous. But what was the suit in this case? The damages......themoney plaintiffseeks to recover-is the gravamen, the heart, the soul of his suit. The suit he began was a suit for $2,000, and such a of the first term at which it could suit it remained until the have been tried when the plaintiffwent into court and converted his suit for $2,000 into a suit for $10,000. The $2,000 suit disappeared. It merged into and was swallowed up by a suit for $10,000. The life of the new suit began atthe moment the first suit expired. Plaintiff's complaint was no longer for $2,000, but it became a complaintfor five times that sum. Under the laws of Tennel1see process issued upon a suit instituted must he executed at least five days before the time for the meeting of the court, so' as to be issuable at that term. .If such process be executed at a later day it is not issuable until the next succeeding term. The suit for $10,000 did not begin until the last day oithe August term, 1888, of the court,,' and the suit, according to. the letter and spirit of the act of 1887, would not be returnable at the shortest before the next term of the court, and defendant's petition was filed before that time. In general phrase, and in most respects, the amendment increasing the damages did not create a new suit, but safar as the jurisdiction-of this court is concerned it was, new, and a liberal interpretation will be allowed to prevent the flagrant and intentional defeat of its jurisdiction. "If the defendant have a right, to the removal, he cannot be deprived of it by the allowance by the state court of an amendment reducing the sum, claimed after the right of removal is complete." Speer, Rem,. Oauses, 81. Kanouse v. Martin, 15 How. 198. This being true, is not the converse of the proposition truer that is, that a person not entitled to 'a removal who becomes entitled t(} it, so far as the jurisdictional amount is concerned, by reason of an amendment allowed by the state oourt after the time had elapsed within which his removal of the suit might have been made, shall not be, deprived of his right to remove the suit? The reasons why the rpmoval of the cause should not be defeated in one case apply with equal cogency to other. Had the defendant filed its petition and bond for removal the moment after the amendment was made increasing the damages claimed, his attitude in the case would have been in nowise changed from that which it occupies. , But suppose the position taken in regard to the removal ordered by the state court be wrong, how stands the case with regard to theapplic.lttion made to this court for removal on account of local prejudice or influence? In Lookout Mountain 00. v. Houston, 32 Fed. Rep. 711, in which there was an application for removal because of local prejudice or inflnence,it was held that an application in such case must be filed at the of the cause, or hefore. If that be correct, the application in this suit would be in time; if the positions assumed upon the first ground of removal be tenable. The weight of opinion, however, so far as cases have been adjudged, is that such removal maybe made at any time before the final hearing of the case. Judge DEADY, an excellent
!1uthority, so holds in Fisk v. Henarie, 32 417.' And so does that eminent jurist, JudgeJ:A.CKSON, ofthis circuit, in W7telanv. Railroad Co., 35 Fed. Rep. 849-866. A very able, clear, and well-considered opinion has been rendered by him in this case; and the case decided by Judge JACKSON is identical with the (',ase in hand in most of the points or contention raised for determination. The opinion of the circuit judge will be accepted as the law of this case, not only because of the authority oithe decision as a judicial exposition, but also forthe sake of the harmony and agreement that should prevail, if practicable, in the administration of the law by different judges presidirig over the same court. In passing, it may be observed toot the words "local prejudice or influence" are used. Theyare connected disjunctively. If there be local prejudice, the cause may lJe. removed, or if no local prejudice exists, and there belocal influenqe so powerful and operative to prevent the defendant from obtaining justice, he may remove. If there be prejudice against the defendant, or if the influence and power of the plaintiff or any other local influence dominate the public mind at the place where the suit is instituted, so that he cannot have justice, the cause may be removed. The fourth clause of section 2, act of March 3, 1887, is wide-reaching in its changes of the law previously existing. It enlarges its scope in almost every' direction but one. It does not allow a plaintiff remove his suit. It embraces all controversies between citizens of different states without regard to amount.' It permits or authorizes removal, though some of the defendants may be residents, or citizens rather, of the state in which the plaintiff resides. Any defendant, being a non-resident. may remove the suit. "It extends to all controversies, without regard to amount; to all suits, whether they can be estimated in dollars and cents." Speer, Rem. Causes, 62; Fales v. Railroad, 32 Fed. Rep. 673; Whelan v. Railroad 00., supra. The act under consideration provides for the removal of the cause by this court, instead of by the state court. It must be made to appear to this court that the cause is removable, and it removes it. How it shall be made to appear that it is removable is, to some extent, an unsettled question". In Short v. Railway, 33 Fed. Rep. 114, Judge BREWER held that a petition and affidavit such as have been· filed by the defendant in this case are not such steps as will authorize a removal; that it must appear to the court in some method that may enable it to determine the fact as to whether there is prejudice. If this be a correct decision of the law, this case should not be removed. The decision of Judge ,JACKSON in the Whelan Case, supra, however, makes a different determination, and his conclusions have been reached after a wide range of examination, and after deliberate and careful consideration, and it has already been announced that this opinion will be followed in this case. Judge JACKSON says: "In conferring upon the circuit court of the United States the authority to act UPOlJ the application for removal of suits from state courts, congress certainly never intended to make the question as to the existence or non-existtince of prejUdice or local influence, which would prevent a non-resident citl-
zen defendant from obtaining justice in the local courts, a jurisdictional fact, 8uch as would entitle the side opposing the removal to dispute its truth and put the matter in issue for formal trial." 35 Fed. Rep. 862. In the same connection it is held that a petition and affidavit such as have been made in this case made it appear that the cause should be removed. This decision on this point concurs with that of Judge DEADY in Fisk v. Henarie, 32 Fed. Rep. 417-421, and is sustained in Speer, Rem. Causes, 63. Judge SPEER in his work on Removals under the act of March 3, 1887, page 62, says: "It is quite possible that in this far reaching statute congress intended to correct the mischief pointed out in Kurtz v. Moffitt, 115 U. S. 498, 6 Sup. Ct. Rep. 140. There it was held that before the suit could be removed it must have the money value fixed by the statute. Now, if local prejudice is a ground of removal from the local court in any controversy between citizens of different states, tbere is no reason why it should not h:we the same effect in all controversies. Undeniably there is often much local excitement and prejudice on the trial of procerdings for divorce, habeas corpus, or other suits where the matter in dispnte cannot be estimated and ascertained in money. The federal court8 are not courts where non-residents hav£' an undue advantage. and it is no injm,tice to residents to require them to litigate therein tbeir controversies with citizens of other states." If this suit has not already been removed to this court by the order made by the state court, it should be removed under the application to this court. The order for removal is made, and plaintiff's motion to re.mand is overruled.
ARMSTRONG V. ST.A.NAGE.
SAME V. WOOD.
(Circuit Oourt, S. D. Ohio,
BANKS-NATIONAL BANKS-INCREASE IN CAPITAL-LIABILITY OF SUBSCRIBER.
National banks have no authority to increase their capital stock except as provided by Rev. St. U. S. § 5142, and act Con!\'. May 6.18136; and where an JUcrell.se is attempted to be made without obtainmg the consent of two-thirds of the stock, the payment in full of the amount of such increase, and the certificate and approval of the comptroller of the currency, as required by thosestatutes, the proceedings are invalid, and preliminary subscriptions to such increase cannot be enforced. Such a subscription is impliedly conditioned on the subscription of the whole amount of the proposed increase, and on the compliance by the cor· poration with all the requirements of the statute necessary to make the increase stock valid. And in case of non-compliance with such requirements. there is a failure of consideration.
In an aC,tion by the receiver of a national bank to enforce subscriptions tQ. a proposed increase of its capital stock. an allegation that the bank, subse· quent to defendants' subscriptions, and with their knowledge, represented to the public by means of circulars, letter-heads. etc., that its capital stock had been so increased, and that defendants allowed their names to remain "upon the list of those subscribing for and entitled to such new or increase of stock," but without alleging that the public gave credit to the bank on the faith that defendants were part owners of such increase of stock, or that they