Le Roy v. Hartwick

229 F. 857, 1916 U.S. Dist. LEXIS 1065

• Court: District Court, E.D. Arkansas
• Decided: February 23, 1916
• Docket: No. 5773
• Status: Published

Opinion

TRIEBER, District Judge

(after stating the facts as above).

[1, 2] It is a well-established rule of law that the amount claimed in the complaint determines the jurisdiction of the national courts, unless it appears to a legal certainty from the face of the complaint that in no event can the plaintiff recover an amount necessary to give the court jurisdiction, and that a part of the claim necessary to make up the jurisdictional amount is as a matter of fact colorable and fictitious, and was inserted in bad faith to invoke the jurisdiction of the court. The fact that upon the -trial the amount recovered is less than the sum necessary for the court’s jurisdiction does not defeat it. Tinstman v. First Nat. Bank, 100 U. S. 6, 25 L. Ed. 530; Hilton v. Dickinson, 108 U. S. 165, 2 Sup. Ct. 424, 27 L. Ed. 688; Smith v. Greenhow, 109 U. S. 669, 671, 3 Sup. Ct. 421, 27 L. Ed. 1080; Barry v. Edmunds, 116 U. S. 550, 566, 6 Sup. Ct. 501, 29 L. Ed. 729; Wetmore v. Rymer, 169 U. S. 115, 122, 18 Sup. Ct. 293, 42 L. Ed. 682; Schunk v. Moline, Milburn & Stoddard Co., 147 U. S. 500, 13 Sup, Ct. 416, 37 L. Ed. 255; Put-in-Bay Waterworks Co. v. Ryan, 181 U. S. 409, 431, 21 Sup. Ct. 709, 45 L. Ed. 927; Smithers v. Smith, 204 U. S. 632, 642, 27 Sup. Ct. 297, 51 L. Ed. 656; Bank of Arapahoe v. David Bradley & Co., 72 Fed. 867, 19 C. C. A. 206; Hampton Stave Co. v. Gardner, 154 Fed. 805, 83 C. C. A. 521.

[3] Tested by this rule, is the claim for attorney’s fees merely colorable, for the purpose of conferring jurisdiction on this court, when without that claim the amount involved would be insufficient to authorize this court to- assume it? On the part of the plaintiff the contention is that, the notes having been executed and made payable in the state of Texas, the law of that state must govern, and that it is the settled rule of law in that state, as established by an unbroken line of decisions of the Supreme Court of that state, that such a stipulation is valid and enforceable. On the other hand, tire claim of the defendants is that 'the lex fori controls, and that the Supreme Court of the state of Arkansas has uniformly held that such a provision is a penalty, and that it is against the public policy of the state to enforce it, even if the notes were executed and made payable in a state where it is valid and enforceable.

Whether tire lex loci or the lex fori controls, or whether .this court, being a national court, must decide the question for itself, regardless of the decisions of the highest court of either state, the point involved not being statutory, but one governed by the law merchant, are important .questions to be determined, and therefore clearly justiciable. The authorities on the question whether such a stipulation is enforceable are so conflicting that it is impossible to harmonize them. In a note to Raleigh County Bank v. Poteet (decided by the court of last resort of the state of West Virginia) 82 S. E. 332, in L. R. A. 1915B, 928, these conflicting decisions are collected, and their utter irreconcilability shown.

It is therefore beyond question that the right to recover an attorney’s fee on these notes is “a matter in controversy,” to be determined if pleaded as a defense in the answer, and therefore must be computed in making up the requisite jurisdictional amount. This was expressly determined in Springstead v. Crawfordsville Bank, 231 U. S. 541, 34 Sup. Ct. 195, 58 L. Ed. 354. That case rules this. Whether, when the issues are made up, there can be a recovery of the attorney’s fees, cannot be decided now, as the only question before the court is that of jurisdiction.

The demurrer to the jurisdiction of the court is overruled.