Morbeck v. Bradford-Kennedy Co.

113 P. 89, 19 Idaho 83, 1910 Ida. LEXIS 104

Opinion

AILSHIE, J.

— This action was commenced in the district court in and for Kootenai county, and summons was served on the defendants, Kidd Island Lumber Co., Bradford-Kennedy Co., and J. N. Ashburn, on the 26th day of March, 1910. On the 5th day of April following, the Bradford-Kennedy Co., a Nebraska corporation, filed its petition in the district court for a removal of the cause to the circuit court of the United States for the district of Idaho, upon the ground of diverse citizenship and the further ground that a separable controversy existed between it and the other necessary parties to the suit which could be fully determined as between themselves. This petition, together with a bond approved by the district judge, was filed on April 5th, and on the same day the judge made an order of removal in which the following was the closing sentence: “It is further ordered that all further proceedings in this cause be stayed and discontinued in this court. ’ ’ The transcript of the record was filed in the circuit court of the United States on the 23d of April, and on May 9th the plaintiffs appeared through their counsel in the circuit court of the United States, and moved to remand the case to the state court. This motion was heard on May 10th, and on May 11th an order was entered remanding the case to the state court. A certificate of the action of the circuit court of the United States in remanding the case was filed with the clerk of the district court in and for Kootenai county on the 13th day of May. Counsel for the defendants received notice of the ruling of the United States court on the evening of the 12th of May. On the 13th, and after the filing of the certificate remanding the case from the circuit court, the clerk of the district court entered the default of the defendants for failure to appear and answer within the statutory time, and the plaintiffs thereupon submitted their proofs to the court, and the court made findings of fact and conclusions of law, and entered a decree in favor of the plaintiffs according to the prayer of the complaint. Counsel for the defendants resided in Spokane, and on the 13th day of May they prepared and mailed to the clerk of the court at Coeur d’Alene for filing the separate demurrer of the Bradford-Kennedy Co. and the separate demurrer of the Kidd Island Lumber Co. and J. N. Ashburn, and mailed copies thereof to the attorneys for the plaintiffs. These demurrers were received by the clerk on the morning of the 14th and were by him filed. On or about the 14th attorneys for the defendant learned that default had been taken against them and judgment had thereupon been entered. They immediately prepared and on the 18th of May filed their motion to vacate and set aside the default and judgment upon the following grounds:

“1. That the same was premature and entered without authority of law, and beyond the jurisdiction of the court.

“2. The same was entered through mistake and excusable neglect of these defendants.

“3. These defendants have a good and meritorious defense to this action and tender herewith answers showing such defense.

“4. These defendants hereby offer to abide by any lawful order of this court conditioning their right to appear, plead to and defend this action.

“5. The entry of said default and judgment against these defendants amounts to the taking of .their property without due process of law and in violation of the fourteenth amendment of the constitution of the United States. ’ ’

This motion was accompanied by affidavits from the attorneys setting forth the detailed history of the matter and the fact that they immediately prepared and mailed their demurrers as soon as they learned of the action of the United States circuit court in remanding the ease, and that default and judgment had been taken against their clients through their mistake, inadvertence and excusable neglect. After a hearing on this motion, the court denied the same, and the defendants thereupon appealed from the judgment and the order denying their motion to vacate and set aside the judgment.

We are confronted with but two propositions in this ease: First, was the action of the clerk in entering the default of the defendants in accordance with the statute, or was it in violation thereof? Second, if the default was entered in accordance with law, was the showing made by the defendants sufficient to bring them within the purview of sec. 4229, Rev. Codes, entitling them to relief on account of their inadvertence, mistake or excusable neglect in failing to appear and answer within the time prescribed by statute ?

The first question is readily answered by the statute itself. See. 4140 of the Rev. Codes allows the defendant twenty days within which to appear and answer. Sec. 4360 authorizes the clerk to enter a default of a defendant who fails to appear and answer within the time allowed for that purpose. The defendants In this case had failed to appear and answer within the time prescribed by the statute, and the clerk was acting clearly within the scope of his authority as prescribed by law when he entered their default for failure to answer. The fact that the case had in the meanwhile been transferred to the federal court would not furnish a valid reason for the clerk’s failing to enter the default after the cause was remanded. It is true that the transfer of the case prior to the expiration of the time for answering might have prevented the clerk from entering the default until the case was regularly sent back to the court of which he was clerk, but as soon as the case was sent back and it appeared from the return of summons that the time for answering had expired and no answer had been made, it was proper for him to enter a default.

The order of the district judge staying further proceedings in the state court had no reference to the appearance of the defendants, nor could it extend their time for answering. This order stayed proceedings in the district court only during the time the case might remain in the federal court, and had special reference to the removal and rested solely on the petition for removal. It follows that if the default was properly entered, the court had the jurisdiction to hear the proofs, make findings and. enter judgment.

This brings us to the question as to whether the showing of surprise and excusable neglect on the part of the defendants was sufficient to entitle them to have the default set aside and the judgment vacated. The time which elapsed between the 26th day of March, the date on which the summons was served, and the 13th day of May, the day on which default and judgment were entered, was more than double the time allowed by statute for defendants to answer after service of summons. Had the case been pending all this time in the district court, there would have been no question about the right of the clerk to enter the default. When the defendants filed their petitions for removal, they made no appearance in the case by way of demurrer or answer or otherwise. Of course, at that time their time for answering had not expired. But, as we understand the law and rules of practice governing removal of causes from state to federal courts, the defendants might have demurred or answered without prejudice to their petition for removal, provided their petition was filed at “any time before the defendant” was “required by the laws of the state or the rule of the state court in which such suit is brought to answer or plead to the declaration or complaint of the plaintiff.” (25 U. S. Stats. 433; 4 Fed. Stat. Ann. 349 [U. S. Comp. St. 1901, p. 508] ; Moon on Removal of Causes, sec. 153; Champlain Const. Co. v. O’Brien, 104 Fed. 930.) When the case was filed in the federal court, the defendants filed no demurrer or answer and, as we understand, the rules of practice prevailing in that court, it was not necessary for them to do so until it was determined that the federal court would take jurisdiction of the case, and, if it decided to do' so, not then until the pleadings were reformed to comply with the practice in that court. As soon as it was decided by the federal court that it would not take jurisdiction of the case, there was no occasion for the plaintiffs reforming their pleadings, and the defendants were at once put on notice that the time for answering in the state court had expired. It is true that they prepared demurrers on the following day and forwarded them to the clerk of the district court. This, however, might have been done within the time allowed for answering, and would thereby have saved all question or doubt in the matter. Had it turned out that the removal was properly made and that the defendants had made the proper showing for removal, there would have been no question about a default in the federal court. On the other hand, when it turned out that the defendants had never brought themselves within the federal statute authorizing the removal, it necessarily followed that they were subject to the practice and procedure prescribed by the state laws governing the action. The case was, in point of both fact and law, one of which the federal court had no jurisdiction, and so the jurisdiction was never-transferred except in so far as it was necessary for the federal court to decide the sole question of jurisdiction.

In Finney v. American Bonding Co., 13 Ida. 534, 90 Pac. 859, 91 Pac. 318, this court had under consideration a ease where the defendant removed a case to the United States circuit court, and that court held that the removal had been properly taken and assumed jurisdiction, heard the ease, and entered judgment, and on appeal to the circuit court of appeals the judgment of the circuit court was reversed and it was held that the ease had never been properly removed to the circuit court, and it was ordered remanded to the state court. In the meanwhile, the defendant had neglected the proceedings which had been taken in the state court, and on appeal to this court asked that the time it had expended in the federal court trying to sustain its removal should be deducted from the time prescribed by the state statute and rules of the supreme court. In reply to that proposition this court said: “Where a party undertakes to remove a cause commenced in the state court to the United States court, and the cause is remanded on the ground that the United States court acquired no jurisdiction of the cause by such attempted removal, the party undertaking such removal must take the consequences of the same.”

The same question was again before this court in Mills v. American Bonding Co., 13 Ida. 556, 91 Pac. 381, and after a further consideration of the matter the court said: “Where a litigant seeks and procures a removal of a case from the state court to a federal court, and thereafter pursues his remedy in the latter court, and it is finally determined that the federal court has acted without jurisdiction and that the case has never been legally and regularly removed from the state court, and he thereafter takes up his case where he left off in the state court, the bar of the statute and rules of court limiting the time in which to pursue his remedy on appeal will be held to run against him the same as if he had never sought to prosecute his remedy in another forum.”

It seems to us proper and entirely just to both litigants to hold that when a defendant petitions for the removal of a cause from a state to a federal court, he becomes the actor in that particular, and that he must assume the risk and consequences that follow if he is unsuccessful and in the meanwhile has failed to protect and preserve his right under the state statute and rules of practice prevailing in the state court.

It has been quite uniformly held that where the petition for removal and the pleadings and other files in the case constituting the record up to the time of the filing of the petition, all taken together, show upon their face that the federal statute has been complied with and that the case is one that should be removed, the jurisdiction is at once transferred from the state to the federal court. (Steamship Co. v. Tugman, 106 U. S. 118, 1 Sup. Ct. 58, 27 L. ed. 87; Baltimore etc. Co. v. Koontz, 104 U. S. 5, 26 L. ed. 643; Chesapeake & O. R. Co. v. McCabe, 213 U. S. 207, 29 Sup. Ct. 430, 53 L. ed. 765.)

It is also equally well settled that such a petition presents to the state court a pure question of law as to whether, admitting the facts stated in the petition for removal to be true, it appears on the face of the record, which includes the petition and pleading and proceedings down to that time, the petitioner has complied with the statute and is entitled to the removal of the suit. “That question the state court has the right to decide for itself.” (Burlington etc. Co. v. Dunn, 122 U. S. 513, 7 Sup. Ct. 1262, 30 L. ed. 1159,) That decision must always yield, however, to the decision of the federal court on the same question. (Chesapeake etc. Co. v. McCabe, 213 U. S. 207, 29 Sup. Ct. 430, 53 L. ed. 765.)

It has been suggested by appellants in their brief that the judgment entered in this ease is in violation of the fourteenth amendment to the constitution of the United States, in that it denies appellants the equal protection of the law. This contention is wholly without merit. The statute fixes the time within which a defendant shall appear and answer. That applies alike to all defendants. These appellants have had the same time as is allowed every other defendant in the state courts. The fact that appellants exhausted a- part of their time in a vain endeavor to get out of the state court into the federal court is neither the fault of the law, the courts, nor the adverse party. If they saw fit to exhaust a part of their “day in court” in an effort to get into another forum and failed, tbe consequence should justly and properly fall upon them and upon no one else. It should not serve as a means of extending the time allowed them by statute or of delaying the adverse party in getting his case to trial after the question of jurisdiction has been determined. (McIver v. F. C. & P. R. Co., 110 Ga. 223, 36 S. E. 775, 65 L. R. A. 437; Mills v. American Bonding Co., 13 Ida. 556, 91 Pac. 381.)

There was no abuse of the discretion vested in the trial court in denying the motion to vacate the judgment and set aside the default and permit the appellants to answer. Judgment affirmed, with costs in favor of respondents.

Sullivan, C. J., concurs.