Hobby v. Allison

13 F. 401, 1882 U.S. App. LEXIS 2647
CourtU.S. Circuit Court for the District of Michigan
DecidedJanuary 16, 1882
StatusPublished

This text of 13 F. 401 (Hobby v. Allison) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hobby v. Allison, 13 F. 401, 1882 U.S. App. LEXIS 2647 (circtdmi 1882).

Opinion

Brown, D. J.

Tho only limitation to the jurisdiction of the circuit courts contained in article 3, § 2, of the constitution, is, so far as the question of limitation is pertinent here, that the suit shall be between citizens of different states; but in parceling out this [402]*402jurisdiction in the judiciary act, congress restricted that of the circuit courts to cases at law or in equity between citizens of different states, involving more than $500 in amount, and further prohibited such suits altogether, when brought to recover upon any promissory note or other chose in action in favor of an assignee, unless a suit might have been prosecuted in such courts had no assignment been made, except in cases of foreign bills of exchange. The object of the restriction was evidently to prevent the federal courts being used in petty cases, where the expenses of trial might be much greater than the amount involved. The object of the prohibition was equally obvious, namely, to prevent the assignment of choses in action to non-residents for the purpose of enabling suits to be brought in the federal courts. In the interests of commerce, however, and to facilitate the negotiation of commercial paper, an exception was made in cases of foreign bills of exchange, since extended to all bills of exchange and promissory notes.

In the twelfth section, however, providing for the removal of cases from the state courts, upon the petition of a non-resident defendant, there was no necessity for providing against causes of action collusively assigned, as a resident defendant would, in almost every case, prefer to bring suit against a non-resident in the courts of his own state; and hence the only limitation upon such removals was that the suit should be between citizens of different states, and should involve over $500. Hence the courts, as a rule, hold that the eleventh and twelfth sections of the judiciary act were to be read independently, and that a removal might be had though the suit could not originally have been begun in the federal court, although it was obvious that no suit could be removed which might not, so far as the constitutional provisions were concerned, have been originally begun in one of those courts. Green v. Custard, 23 How. 484.

In Bushell v. Kennedy, 9 Wall. 387-393, it was said that “the restriction in the eleventh section is not found in the twelfth. Nor does the reason for the restriction exist. In the eleventh section its office was to prevent frauds upon the jurisdiction, and vexation of defendants, by assignments being made for the purpose of having suits brought in the name of assignees, but in reality for the benefit of assignors. In the twelfth it would have no office for the removal of suits could not operate as a fraud upon the jurisdiction, and was a privilege of defendants, and not a hardship upon them.” Ayres v. Western R. Co. 45 N. Y. 260; Winans v. McKean R. & Nav. Co. 6 Blatchf. 215.

[403]*403We now come to the act of 1867, under which the removal was made in this case. This statute confers upon the circuit courts no additional original jurisdiction. It made no amendment to the eleventh section of the judiciary act, and in that respect left it just where it found it. But in respect to removals it made a startling innovation. It provided that in all suits involving over $500, between a citizen of the state in which the suit was brought and a citizen of a different state, such citizen of another state, whether plaintiff or defendant, might remove, upon filing an affidavit of prejudice or local influence, at any time before the final hearing or trial. This practically defeated the wise restriction in the eleventh section of the judiciary act against actions in favor of assignees of choses in action, unless the assignor eould have sued, and gave the non-resident plaintiff the right to begin suit upon such a cause of action in the state court, and then to abandon the forum thus voluntarily chosen, and remove the case to the federal court, by the simple filing of an affidavit, easy to make and impossible to disprove. There was, however, this much to be said in favor of the act: It was passed soon after the close of the civil war, and at the time when northern creditors began to press heavily for payment upon their ante-bellum debtors. There were undoubtedly strong prejudice and local influence against these suits, which might not be discovered by the non-resident plaintiff until some time after the suit was begun. It was a question, then, whether the plaintiff should be compelled to discontinue such suit and begin a new suit in the federal court, against which the statute of limitations might have run, or vest him with a power to remove to the federal courts. Congress chose the latter course, and it is not for the courts to question the wisdom of its choice. It has, however, undoubtedly been a strong temptation to resident creditors to assign their causes of action to non-resident plaintiffs, who could remove the case thus commenced to the federal courts, and thus evade this important provision, which had existed from the adoption of the constitution. The question still remains, however, whether, as a matter of legal construction, the plaintiff is not entitled, under the act of 1867, to remove this case to the federal court. It is true that the eleventh section of the judiciary act has since been somewhat enlarged by the act of 1875, § 1; but it has been generally held that the act of 1867, with regard to removals, is still in force, and is not supplanted by the second section of the act of 1875, and such I assume to be the law, without expressing my own opinion upon that point.

[404]*404Upon reading the act of 1867, and the first section of the act of 1875, there seems to be but little liberty of choice. If the eleventh and twelfth sections of the judiciary act cannot be read together, there is greater reason for saying that an act designed to amend or supplant section 12 must be treated as independent of a subsequent act passed to supply the place of section 11; and such has been, I believe, the unanimous puling of the courts.

In City of Lexington v. Butler, 14 Wall. 282, it was held that the restriction of the eleventh section of the judiciary act did not apply ) to cases transferred from state courts under the act of 1867. The first reason assigned by Mr. Justice Clifford for sustaining the jurisdiction in that case was that the bonds were made payable to bearer, and therefore not within the prohibition; secondly, that the principle applied in the case of Bushnell v. Kennedy, above cited, should also apply to the case then under consideration.

So, in Gaines v. Fuentes, 92 U. S. 10, 19, it was declared that the act of 1867 covered every possible ease involving controversies between citizens of the state where the suit was brought, and citizens of other states, if the matter in dispute exceeded the sum of $500; and the fact that the suit would not originally have lain in the federal court, was no objection to such removal.

In Johnson v. Monell, 1 Woolw. 390, Mr. Justice Miller held that the only conditions of removablity under the act of 1867 were a diverse citizenship, a cause of action exceeding $500, an affidavit by the non-resident citizen of prejudice or local influence, and a proper bond.

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Related

Green v. Custard
64 U.S. 484 (Supreme Court, 1860)
Bushnell v. Kennedy
76 U.S. 387 (Supreme Court, 1870)
City of Lexington v. Butler
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Insurance Co. v. Dunn
86 U.S. 214 (Supreme Court, 1874)
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92 U.S. 10 (Supreme Court, 1876)
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Ayres v. . the Western Railroad Cor.
45 N.Y. 260 (New York Court of Appeals, 1871)
Bryant v. . Scott
67 N.C. 391 (Supreme Court of North Carolina, 1872)
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Quigley v. Central Pacific Railroad
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Bluebook (online)
13 F. 401, 1882 U.S. App. LEXIS 2647, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hobby-v-allison-circtdmi-1882.