lULLS t1. N£WlI:LL.
629
MILLs
fl. NEWELL.
(O£rcuU OOUf't, D. Minnesota. March 10, 1890.)
L
REMOVAL Ol!' CAUSES-MOTION TO REMAND-FILING RECORD.
a.
ElA.¥E,"""l;l.IGHT TO RJ!lMOVIC-J:l.ESIDBNT DEFENDANT.
The removal act of 1888 does not provide for the remoVal of a cause to the federal courts by a defendant sued in the courts of the state of which he is a resident.
On Motion to Remand to State Court. PUree NickeU, for plaintiff. Ftannery Oook, for defendant. NELSON, J. ThiEl suit was brought in the district court of the county of Hennepin, in this state; and on the 24th day of December, 1889, counsel for the defendant filed a petition in the state court, signed by the defendant, for··the removal of the case to the circuit court of the United States in this district. The plaintiff is a citizen of the state of Rhode Island,and the defendant is a citizen of the stll.te of Minnesota. The ground of removal is that the controversy in said suit is wholly between citizens of different states, and that the defendant is interested in the controversy. The proper bond was presented to the state court with the petition, and an order for removal was made on December 24th by the judge of the state court. ' The law of congress directs that a condition of the bond should be that the defendant should enter in such circuit court of the United States, on the first day of its then next session, a copy of the record in such suit, etc., and it shall then be the duty of the state court to prooeed no further in the suit, and, "the said copy of the record being entered, as aforesaid, in said circuit court of the United States, the Cliuse shall then proceed in the sa.me manner as if it had been originally commenced in said circuit court." The act of congress of 1888, amending the removal act of 1887, contains the following clause,-the only one applicable to the present case: I. Any other suit of a civil nature, at law or in equity, of which the circuit courts of the United States are gi ven jurisdiction by the preceding section, and which are now pending. or which may hereafter be brought, in any state court, may be removed into the circuit court of the United States, for the .proper district, by the defendant or defendants therein being non-residents of that state. ,l . The preceding section, alluded to, gives the circuit courts of the United States concurrent jurisdiction with the courts of the several states,originalcognizance of all suits of a civil nature, at common law or in equity, wheD the matter in dispute exceeds, exclusive of interest and coSts, the ,v.41F.no.l0-34
sum or value of $2,000, in which there shall be a controversy between next session of the circuit court citizens of the different states;:·; <".m.l:(e of the United States, after the filing of the petition and order by the state onthe:'thiTd,Monday ofthe':ofoU6\t'ing June. The judge, plaintiff has procured a transcript said cause, containing a copy of all qf the .them to this ,coui't,asking that .WhiOAWll13 granted, and thatranscript ofrecthe same to show ca.use the counsel, w,hy theactlOn should not be remanded to the state courtfbr the reason that it appeared UPOl:l ;the faqe,of,the was not elltitledto have the ease removedunder,theactohlongyes1Ji .On the hearing of the motion,., the counsel for the defendant objected to the court's considering the case, for the reason that the motion to 1tm;)and wa's premature, and the ciieuit court could not proceed to determine the question,ofjurlsdi&tion untiFthe first day of the ensuing term. , .. . . No jurisdictional facts are contested by affidavits, and the only question can tl;J.tl questiol'j: of jurisdictioll UpOl) ,tpeJa.cElQf .the record at ,this: time. An ex1that;this is not a proper case for relUoval aO,1inationof the. .record J>y defendant, it seemS very clear, in the ,suedin a court of his own .removal act of If388,that:a state, 98-nnot re:mo,ve the cauEfe',intoJhe federal courtsj And it is also ;tha,t take notice oia .which ia gl)op1,'lQ. torerpand, tQe.cause. Lf thep&. ,case ;within the .,statute, it is the duty to .it!" "Th{l record, iooludingthe petition, .of. the, must show jurisdiction in the circuit court; aug; when the ca.seis ij.,clt one of can. atl1ny ,stage If,\lPOu, the face of the'l'ecord ,the, jurisdiction and the court,and the right<of is the federalqourt will not proceed to hear and d,eterr .mine the case jlpOll' the merits untiLtbe ne:lCt term,s,t :which, under the petitioLleT for required to enter the record in the federal court., ,But when a trll,nscript ,is entered in the circuit·· court. by and the attention oftbecourt'i,9called to it, is one of which court cannot take jurisdiction, it will entertain a motion to, remand the in o:r,.c;1 lrtop;r.:eyel1t qe1ay, and seCUre jUl!tioe. The court, .tairilY; "'6ull1, reIQand if: was first day ,of the then; J;lext .$eSsion,and,jts,attention was called to ;it at thattimej 'ahd,>'as stated by,thejudge in the ,ease of Delbanco v;SVngletary; 40 'Fed'. ':R$p.181 j '''why shouidll cdtirt hesitate or decline fully record in the first instance, and determine whether or not it hasa:ilS Jtiriadictiol!lJ of the.'ooooj.· when !nOMpS, afterwards .it. must unikethis '6um.inatiQIl, and, :ronnd: jurisdictionaLfacts; must 'vacate all orders . ,thEfetofore mad'e;and remand: the !'Case to' the state court." Thiscourt .f4I.nnQt. take, .cognizance, of Ame, suit ,unless: 16gally removed' into' ,it i: . \ r.,,-,; " -'j' _ '
!
·
ST,uTZ t7. HANDLEY· . · ,. . _', c. · · , '
,
581
from the court.in.which it originated. What justifiable' ground can b& for the case ,here ,when, u,pon the fnce of the record, it is' Clear that the cou,rt can take no cognizance of it, and it must be finally !emanded to thestate ,court for want,of In my opinion, the plaintiff is not prohibited from filing the record at a date earlier than the first day of the next session, and can then challenge the jurisdiction of the court as it appears upon the face of the recorda. Motion to remand granted.
STUTZ
et al. 11. HANDLEY
et at
(Oircu'lt Uoun, M. D. TenneBBee. ,Marcb 18, 1890.)
1.
CoRPOlUTIONs.::-AorloN AGAINBTSToCKHOLDBRB-RBS JUDICATA.
Where, in anlWUon against a oorporation for the price of machinery, a counterclaim for damages by breach ,of warranty Is disallowed, it, is res ittdlcata as to the stockhOlders, and such counter-claim canuot be pleaded In a suit, on the same canse at action, to recover the amount unpaid on their subscriptions ot stock. Where all the stockholders of a corporation assent totbeaction of a stockholders' meeting in increasing the capital stock, or ratify such action, they cannot afterwards object to sucb increase that no formal notice of tbemeeting was given,'or that it was held in another state than that hi wnich tlle,corporation was chartered. there being nothing in the charter to prohibit its beingsolleliL ' Where, a corporation organized under 'Gen. St. Ky. c. 56,' hQII by Its charter the power to Increase its capital' stock, its stockholders, who have acquiesced in such an increase' ,ana receiveti the stock issued thereupon, when' sued by a creditor of thl! corporation for the ,amount unpaid on such stock, are estopped to say that the Increase WlloS invalid because itewas not published and recorded as required by, seetions 5 and 6 of the above chapter. ' , ' OllSTOCX-VALIDITY__EsTOP1'lCL.
2.
S.SAKE.
4. SAKE.....;STOQltHOLDERS', LIABILITY FOR UNPAID STOCK. After such increase was made in the capital stock, a pol'tionof the new shares W80fl distributed among the stockholders, upon the understanding that they were the'owners of the new stook in proportion to the amounts they respectively held of the old, and .the certUlcatesissued to them recited that the stocll; was paid up. The corporation then beoame indebted to complainants. who had notice of the increase Of. the capit.iJ;lstock. but not of the disposition made of it, and afterwards the corporation became insolvent. Held, that the stookholders are liable to complainants for the full amoiintof the new stock so issued to them, and not paid for; the capitll1 stock being a trusttund for the benefit of creditors. G. BAKE. ' This liability for tbe full amount reprellented by tbe unpaid stock, on the insolvency of the corporation, extends to persons tc:l whom a portion of the new stock was issued as an inducemen.t to purcllase ponds of the corporation, though they, too, received certificates reciting that the stock was paill uP. since their &006ptance and holding of the stock is, in le&,al efre($, a subscription therefor which imports a promise to pay.
In Equit,y. Creditors' bill· . .Walter Eva718and W. ,L.. Gordon, for complainants· .' E. H. Ea8t,and Pilcher.JcWeaver, for dElIEmdantB· . JACKSOlll, J",I'the complainants, on behalf of themselves and all other ofthl,l ,Clifton Coal Company who may choose to come in, bring this suit to reach and subject to the pa.ymentof their debts against the rep1aining unpQ.id upon shares of the capitalstock