et al. 1
(Di8/rict Court, S. D. New York.
September 4, 1889.)
A st'1Julation in acl that "all disputes * * it arising on this charter-par:], or on bills of lading thereunder, shall be settled at port of discharge only," is contrary tv public policy, and void.
P ARTY-PUBUC POLICY,
A hearing on an exception to a libel must be determined on the pleadings, and an affidavit on behalf of respondents cannot be considered.
:l'n Admiralty. On exceptions to libel. Butler, Stillman & Hubbard, for libelant. R. D. Benedut, for respondents.
BENEDICT, J. This ca<;e comes before the court upon an exception to the libel. The suit is brought in personam against the respondents upon a charter-party, to recover freight money. A copy of the charter-party is annexed to the libel. The respondents served a general notice of appearance, and then exeeptea to the libel. The exception raises but one question, and that is whether this court has jurisdiction to entertain the action in view of a provision in the charter-party, set forth in the libel, which is as follows:
"It is further agreed that all disputes, if any, whether arIsing before or after shipment of cargo, and whether arising on this charter-party or on bills of lading signed thereunder, shall be settled at port of discharge only."
The libel shows Philadelphia to be the port of discharge. The provision in the charter-party, upon which the respondents rely, is in legal effect an agreement ousting the juriSdiction of all courts, except those in the port of Philadelphia. Such agreements have repeatedly been held to be against public policy, and void. The provision being void, it makes no difference which party seeks to take advantage of it; being void, it is of no avail to either party. The 'exceptions must therefore be overruled. An affidavit submitted on behalf of the respondents cannot be regarded. This is not the hearing of a motion to decline jurisdiction, addressed to the discretion of the court, but the hearing of an exception to the libel, and must be decided on the pleadings. Moreover, a motion to decline jurisdiction, addressed to the discretion of the court, based upon such a stipulation, could not prevail.
Reported by Edward G. Benedict, )jJeq., of the New York bar.
SEXTON V. SEELYE.
September 25, 1889.)
(Circuit Court, E. D. Missouri, E. D.
REMOVAL OF CAUSES-SEPARABLE CONTROVERSY.
A petition showed that plaintiff was the owner of certain bonds, of which the defendant S. had wrongfulIy obtained possession; that S. had recovered a judgment for their amount, and collected a portion of it; he assigned it to C., who obtained a judgment for the amount still unpaid, with au order charg· ing it on certain lands; that the assignment from S. to O. was made with the intent to defraud the creditors of S., and that C. recovered the judgment in trust for S.; and prayed that the title of the second judgment might be divested out of S. and O. and vested in plaintiff, and for an accounting for the sums collected on the two judgments. Held. that the petition disclosed but a sin· gle cause of action against both defendants, and that the cause was not reo movable on the p;round of a separable controversy.
On Motion to Remand. Lee & Ellis. for complainant. George H. Shields and Eleneious Smith, for defendants. THAYER, J. This case was removed from the state court by defendant Chouteau, on the ground that as between himself and Sexton, the plaintiff, there is a separate controversy which is wholly between citizens of different states, and there is a motion by plaintiff to remand. It is settled by repeated adjudications of the supreme court that a right to remove a cause on the ground of a separa ble controversy therein only exists in that class of cases where the complaint discloses two or more separate causes of action; that the right of removal is to be tested by the case made by the plaintiff in his complaint, and, if that discloses only a single indivisible cause of action, the suit is not removable. Telegraph Co. v. Brown, 32 Fed. Rep. 338, and cases cited. It has also been held that separate defenses interposed by different defendants to a bill or petition, disclosing but a single cause of action, do not create sepam ble controversies, within the meaning of the removal act; and that, when several defendants are sued jointly on a cause of action,-that is, either joint or several at the election of thepleader, -one of the defendants so sued cannot elect to treat the cause of action as severable as to him and remove it to the federal court. Pirie v. Tvedt, 115 U. S. 41, 5 Sup. Ct. Rep. 1034, 1161; Sloane v. Anderson, 117 U. S. 275, 6 Sup. Ct. Rep. 730; Railroad Co. v. Ide, 114 U. S. 52, 5 Sup. Ct. Rep. 735. It is sufficient to say that the proposition so often decided by the supreme court, that a case must disclose two or more separable controversies to warrant its removal to the federal court on the ground on which this removal was taken, of necessity compel::: us to remand this case to the state court. The petition in the case shows that Sexton, the plaintiff, at one time was the owner of certain bonds, and being such owner that defendant Seelye wrongfully came into possession of the same and brought :::uit thereon in his own name, and obtained judgment in such suit on May 16, 1880, for a large amount, which judgment he, all the v.39./<'.no.14-45
same day, assigned to his co-defendant Chouteau; that Chouteau, after collecting about $100,000 on the judgment, brought a second suit to enforce the payment of the residue of the judgment (amounting to some $40,000) out of certain lands, on which the bonds then merged in the judgment had been, and were, a lien, and in such second suit recovered a second judgment for' the unpaid portion of the first judgment, together with an order charging the second judgment as a lien on said lands, and directing their sale. It is averred in substance that the assignment of the first judgment by Seelye was to hinder, delay, and defraud his creditors, and was without consideration, and that the agreement between Seelye and Chouteau when the assignment was made, was that Chouteau should collect the judgment for Seelye's benefit, and turn over the proceeds to him. It is also averred that Chouteau knew that Seelye was not the owner of the bonds on which the judgment was obtained when the same was assigned to him, and further, that he knew that Seelye's purpose in assigning the judgment was to defi.'aud the owner of the bonds out of his property; and that Chouteau has always held the original judgment as trustee for Seelye; and that Seelye has always directed what should be done in the way of collecting the judgment, etc. The prayer is that the title of Seelye and Chouteau to the second judgment may be divested out of them, and vested in the plaintiff, and that Chouteau and Seelye may be compelled to account forall sums collected on the two judgments. We think it is a proposition that admits of no controversy, that the complaint discloses but a single cause of action, and, that being so, the case is not removable. The wrong complained of is that Seelye obtained possession of bonds belonging to plaintiff, and has undertaken to collect them, and appropriate the proceeds to his own use; and that the other defEmdant, with full knowledge of the scheme, has undertaken to aid, assist, and abet him in carrying it out, thereby making himself a joint wrong-doer. It would be difficult to make it appear in a stronger light than is done by the biJl,-that both of the defendants are jointly and severally liable for the alleged wrong, and that they are jointly and severally liable to account for all that has been collected on the bonds, whether the collections were under the first judgment or the second. That being so, anel plaintiff having elected to sue them jointly, the case does not disclose a separable controversy within the terms of the removal act. It is a single cause of action existing against two defendants jointly, which the bill discloses, and neither defendant can be permitted to remove the case on the ground that he might have been sued alone for the alleged wrong, as the plaintiff has not elected to so sue him. Pirie v. Tvedt, 115 U. S. 43, 5 Sup. Ct. Rep. 1034, 1161. The motion to remand is sustained.
FARMERS' LOAN & TRUST Co: et al.
February 18, 1889.)
(Oircuit Oourt, S. D. New York.
FEDERAL COURTS-SERVICE ON NON-RESIDENT DEFENDANTS.
Act Congo 1875, § 8, provides that when in any suit. commenced in any federal circuit court, to enforce any legal or equitable lien upon, or claim to, or to remove any incumbrance or lien or cloud upon, the title to real or personal property within the district where such suit is brought, one or more defendants are non-residents or cannot be found therein, or do not voluntarily appear, the court may make an order directing the absent defendants to appear, etc. Act 1887, amending the act of 1875, provides that" nothing in this act shall be held, deemed, or construed to repeal or affect any jurisdiction right * * * mentioned in section eight of the act * * * of which this act is an amendment." Held, that an action bv an alien bondholder of a railroad company to restrain the trustee in a mortga,e securi1Jg the bonds from paying over to the company, in fraud of plaintiff's rights. the proceeds of the sale of land which by the mortgage was set apart to create a sinking fund for the redemption of the bonds, was within the saving clause of the act of 18H7, and when the action was commenced within the district of which the trustee was an inhabitant, and in which it had the fund, an order might issue to the company, a non-resident corporation, to appear and plead, etc.
In Equity. On motion to set aside order of service of summons. Action by Carl Pollitz against the Farmers' Loan & Trust Company, the Oregon & California Railroad Company, and others, for an injunction. The plaintifF is an alien bondholder of bonds of the railroad company bearing date July 1, 1881, and payable 40 years after date, with interest payable semi-annually. The trust company, a New York corporation, is sole trustee in a mortgage of even date with the bonds, and made by the railroad company to secure them upon all its franchises and property, including land granted by the United States. Provision was made in the mortgage for a sinking fund for the redemption of the bonds, and for this purpose the proceeds of the land sales were pledged to tbe trustee. A part of the proceeds realized had been used for redeeming the bonds. The trust still has in its possession, within the district of New York, over $175,000 unappropriated, and upwards of $275,000 are due from the railroad company to the sinking fund. The railroad company, in 1885, defaulted in the payment of interest on the bonds, and no further payment of interest has been made. The bill asks to restrain the trust company from paying over to the railroad company, as it threatens to do, and thus putting beyond the court's jurisdiction, the amount it has on hand. Defendant railroad company, a non-resident of the district, moves to set aside the order for service on it. Melville Eggleston, for complainant. ChaB. H. Tweed, (James O. Curter, of counsel,) for the railroad company. LACOMBE, J. The authorities cited by the complainant sustain his contention that, at least as to so much of the bill as seeks to prevent the defendants from putting out of the jurisdiction of the court the fund and property now within it, the suit is within the saving clause of section 5