it would seem clear that the action is not one "arising under the constitution or laws of the United States," but one involving a simple question of set-off,to be determined according to the general principles of law. Platt v. Bentley, 11 Amer. Law Reg. 171; Colt v. Brown, 12 Gray, 233; Tartter's Case, 54 How. Pro 385. The correct decision of this question does not, it would seem, depend upon the constrnction of any law of the United States. Gold Washing CO. V. Keyes, 96 U. S. 199; Railroad Co. v. Railroad Co., 26 Fed. Rep. 477. The sections of the national bank act referred to in the petition of removal (sections 5234, 5236, 5242, Rev. St.) are not involved in this controversy in the sense intended by the statute authorizing removals. It is contended that the plaintiff's proceeding is in contravention of section 5242, which prohibits preferences to creditors. There can be no dispute as to the scope and meaning of this section, but the plaintiff maintains that he is not a creditor at all, but a debtor to the bank for the balance between the certificates and the notes. Should this question be determined against him he will, of course, receive his dividends precisely as other creditors. It is not easy to see how there is any infraction of the section referred to, or how its terms are in any manner drawn in question by a proceeding, the object of which is to ascertain, upon a given state of facts, whether the plaintiff's debt to the bank should be reduced by deducting therefrom the amount of the bank's debt to him as administrator. It is not the case of a creditor who obtains a preference subsequent to the failure of the bank or in contemplation of insolvency. No fraud, actual or constructive, is charged in the answer. The object of the suit is to have a of the account declared as of the date balance struck, and the legal when the bank suspended payment. The fact that the bank in question was a national bank does not at all affect the jurisdiction. Act March 3, 1887, § 4. The nature of the action is the same as if the defendant Hayes were the receiver of a state bank, or of an individual. The action involves a simple question of set-off, and is not one arising under the laws of the United States. The motion to remand is granted.
RAND LUMBJ*'. 00.
(Oircuit Oourt, E. D. Missouri, No D.
Under "the local prejudice clause" of actCong. March 3, 1887, (24 U, 8.81. 553,) restricting the right of removal to causes in which the amount in controversy exceeds a specified sum, a petition for removal, showing that plaintiff's claim was lese than the required sum, but averring a counter-claim by defendant in excess thereof, which was denied by plaintiff, shows a sufficient amount involved to confer jurisdiction on the federal court.
A non-resident plaintiff, suing in the state court, against whom a counterclaim is is a "defendant" within the provision of said act, which
CARBON & RAND LUMBER CO. fl. HOLTZCLAW.
a citizen of an-
limits the right of removal to the "defendant being other state" than that in which the suit is brought. 8.
SAME-NoTICE OF PETITION.
Three days' notice is not a reasonable time to allow defendlmt an opportunit.y to contest the allegation of local prejudice before an order of removal is m"Je.
On Motion to Strike a Petition for Removal the Files. Berry &: Thompson, Anderson &: Schafield, and B. R. Dysart, for plaintiff. Sears &: Gutherie and James C. Davis, for defendant. THAYER, J. The only questions that can properly be considered on a motion of this character are (1) whether the petition for removal shows on its face that the amount involved in the controversy is insufliciellt to give this court jurisdiction; and (2) whether the applicant for removal can remove the case, in view of the fact that he originally bronght thesuit in the state court to recover a sum of less than $2,000, and that his right to now remove the suit under "the local prejudice clause" of the act of March 3, 1887, is preclicated solely on the fact that the original defendant has filed a large counter-c1aiUl in such suit. There is no doubt, I think, that the right to remove a suit under the local prejudice clause of the act of March 3, 1887, is limited to cases involving over $2,000. That was the view taken in Malone v. Railmad Co., 35 Fed. Rep. 625, by Mr. Justice HARLAN, and it seems to me to be the only view that can reasonably be taken of the act in question. It is also clear that the counter-claim filed in the cause now under consideration is for a sum in excess of $2,000. The petitioner for removal brought a suit in the state court to recover the sum of $1,822.99, money alleged to be due for lumber sold and delivered. By way of counter-claim the original defendant interposed two demands,-one in the sum of $725.21, for services rendered, and money and materials laid out and expended, for petitioner's benefit, and the other in the sum of $3.000 for unliquidated damages arising out of a breach of contract committed by the petitioner. The total sum that the original defendant seeks to recover on his counter-claim is $3,725.21, and, as his right to recover any portion of that sum is denied by the petitioner's reply, that is prima facie the sum involved in the cross-action or counter-claim. The second question is more difficult, nnd I am not advised that it has ever been decided under the act- of Mnl'ch 3, 1887. In the case of Clarkson v. Manson, 4 Fed. Rep. 260, Judge BLATCHFORD ruled that the original plaintiff in a suit brought in the state court, against whom a counter-claim in the sum of $750 had been preferred, might remove the suit to the federal court after the filing of the counter-claim, although the sum originally sued for was less than $500. This conclusion was arrived at on the theory that a counter-claim preferred under the statutes of the state of New York was a suit, within the meaning of the removal act of March 3, 1875. The local prejudice clause of the act of March 3, 1887, limits the right of removal to the "defcndant being * * * a
citizen of another state" than that in which the suit is brought. If by the word "defendant" we are to understand only the person who is defendant as the parties are arranged when a suit is begun, then this suit is not removable; but if we are at liberty to regard a non-resident plaintiff suing in the state court, and against whom a demand is preferred in the form of a counter-claim, as a defendant, within the meaning of the statute, then the cause is removable, if local prejudice is satisfactorily shown to exist. I am strongly inclined to the opinion that the latter view is pe:-missible, and that it ought to be adopted. The act provides, in substance, that, when a suit is brought in which there is a controversy between a citif:en of a state in which the suit is brought and a nonresident, any defendant, being a non-resident, may remove the controversy to the federal court on the ground of local prejudice. 24 U. S. St. 553. A counter-claim certainly creates a controversy in which the original plaintiff occupies the attitude of a defendant. It is in reality a cross" action, which often involves an inquiry into transactions wholly distinct from those which furnish the basis of the original suit, and in such crossaction a judgment may be rendered against the original plaintiff to any amount. It frequently occurs in practice that the entire controversy turns on the counter-claim, the original cause of action stated in the petition being practically confessed. The right to plead matters by way of counter-claim has been so much enlarged by the Code of Procedure now in force in many states that it will often happen, as in this case, that a non-resident plaintiff, forced to sue in a state court for a small amount, that is perhaps, undisputed, will find himself confronted by a large demand in the shape of a counter-claim that he would have been entitled to remove to the federal court had the plaintiff in the counter-claiin been the first to sue. By the language employed in the statute, congress, I think, intended to secure to the non-resident the right of removal in such cases, if the existence of local prejudice was satisfactorily shown. Unless this view is adopted, it will deprive non-residents of their right to choose the tribunal in which to have their rights determined, in a very large clasl:! of cases. The motion to strike the petition for removal from the files will accordingly be overruled. In this class of removals, where the petition is presented to the federal court in the first instance, the opposite party should have reasonable notice and opportunity to contest the allegation of local prejudice, before an order of removal is made. Such was the opinion held in Malone v. Ra-ilroad Co., supra. In thiE case notice was served on May 25; 1889, and the petition for removal was filed on May 28, 1889. The notice was hardly sufficient. Two weeks' time will be allowed to file affidavits in opposition to the petition before any order is made, but the petition to remove will be entertained.
BURCK V. i'AYLOR.
BURCK V. TAYWR.
(Oircuit Oourt, W. D. Tea:aa.
August 16, 1889.)
REMOVAL OF CAUSES-INTO WHAT DISTRICT.
Under act Congo Aug. 13, 1888, giving the circuit courts of the United States jurisdiction of controversies between citizens of different states, and providlDg that an action by original process shall be brought only in the district of which the defendant is an inhabitant, except where the only ground of jurisdiction is that of diverse citizenship, in which case actions shall be brought in the district of the residence of either plaintiff or defendant, and further providing for the removal of such actions into the circuit court for the proper district. at the instance of defendant, an action brought by a citizen and resident of the Eastern district of Texas against a citizen of another state, in a state court in the Western district, is removable to the circuit court of the latter district. Section 3 of the act mentioned, requiring a petition for removal to be filed before defendant is compelled to plead to the action under the state practice, is complied with by the timely filing of the petition, though it is not actually presented to the court until after the expiration of the time to plead.!
SAME-TIME OF ApPI,ICATION.
'When special bail is not originally demandable in an action, the removal bond need not contain a condition for the entry of the defendant's appearance in the federal court, though he has not yet entered such appearance in the state court, as the act mentioned only requires that condition when special bail may originally be demanded.
Motion to Remand. F. G. MorrUi, for plaintiff. Walton, Hill & Walton and Mr. Matlock, for defendant.
MAXEY, J. This suit was instituted by the plaintiff on the 8th day of December, 1888, in the district court of Travis county, Tex., to recover of defendant damages in excess of $2,000, growing out of an alleged breach of contract. Citation was served upon Taylor in Travis returnable to the March term of court. On the 5th day of March, and prior to the time requirerl by the laws of Texas for Taylor to answer the plaintiff's petition, !ll' tiled his petition and bond for the removal of the suit to this court. The order sllspending further proceedings in the state court was entered during the same term, on the 21st day of June, and a copy of the record was seasonably filed in this court. A motion is now mAde by the plaintiff to remand the cause, mainly upon the following grounds: "(1) Because neither the plaintiff nor the defendant is a resident of the 'Western district of Texas, this suit could not have originally been brought in lAn extension of time to answer by consent of parties does not extend the time for filing a petition for removal. Dixon v. Telegraph Co., 38 Fed. Rep. 377. And a petition for removal filed by a defendant after obtaining an ex pnrte order extending his time to plead, contrary to the state practice, is not filed in time. Hurd v. Gere, ld. 537. v\There a plea in abatement is quashed, and defendants fail to plead to the merits 'instanter, as required by law, a petition for removal, filed nearly a month afterwards, is too late, though plaintiffs did not take a default, as they might have done. Kaitel v. 'Wylie, ld. til". For rulings on the question as to the proper time for filing applications for removal from state to federal courts, see Tan Bark CO. V. 'Waller, 37 1"ed. Rep. 545, and cases dted; Lockha;·t v. Railroad Co., 38 Fed. Rep. 27-1; Doyle v. Beaupre, 39 Fed· Hep.