Ritchie v. American Surety Co. of New York

198 S.W.2d 85, 145 Tex. 422, 1946 Tex. LEXIS 150
CourtTexas Supreme Court
DecidedNovember 13, 1946
DocketNo. A-830.
StatusPublished
Cited by13 cases

This text of 198 S.W.2d 85 (Ritchie v. American Surety Co. of New York) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ritchie v. American Surety Co. of New York, 198 S.W.2d 85, 145 Tex. 422, 1946 Tex. LEXIS 150 (Tex. 1946).

Opinion

Mr. Justice Folley

delivered the opinion of the Court.

This is a compensation suit involving chiefly the question of whether the cause should have been removed from one of the State District Courts of McLennan County to the District Court of the United States for the Western District of Texas.

This is the second trial and second appeal of the case.

The petitioner, Henry R. Ritchie, was injured in November, 1942. He filed suit against the respondent insurance carrier, the American Surety Company of New York, on May 26, 1943. The petition then filed is the only one ever filed by petitioner. He sought compensation for 149 weeks at $20.00 per week, plus interest on delinquent payments. The amount in controversy at the time of filing the suit was $2,980.00, plus six per cent interest on delinquent payments, which total amount was less than $3,000.00. The case was first tried in October, 1943, and resulted in a judgment for petitioner for compensation for 144 weeks at $20.00 per week. That judgment was reversed and remanded by the court of civil appeals. 182 S. W. (2d) 501.

On February 2, 1945, respondent filed its petition for removal of the suit to the federal court on the ground of diverse citizenship. In the petition it was alleged that the amount in controversy then exceeded $3,000.00, but that the demand was less than such sum at the time the suit was originally filed and at the time the cause was first tried. It was further alleged that the cause did not become removable until after it had been appealed to the appellate courts of Texas; and that petitioner was filing its petition for removal at the earliest practicable date same could be presented since said cause became removable.

The increase in the amount in controversy above $3,000.00 was admittedly brought about by the increase of the amount of interest due on the unpaid weekly installments rather than by an amended plea or other volunteer act of petitioner.

On February 7, 1943, the trial court overruled the petition for removal and on February 19, 1945, the cause proceeded to trial on petitioner’s original petition. After the introduction of petitioner’s evidence respondent again renewed its petition for *425 removal and verbally moved the court to sustain the same upon the grounds therein stated and the additional ground that under the evidence petitioner would be entitled to recover, if anything, a sum in excess of $3,000.00. The oral motion was also overruled. Upon a verdict favorable to petitioner judgment was rendered allowing him compensation for 149 weeks at $20.00 per week including interest on the past due installments, which recovery exceeded $3,000.00.

The two rulings of the trial court upon the petition for removal were, among others, assigned as error by respondent in the court of civil appeals, and each assignment was sustained. The judgment of the trial court was reversed and the cause remanded with instructions that the trial court grant the petition for removal and enter appropriate orders transferring the cause to the federal court. Having sustained the assignment mentioned the court of civil appeals of course did not pass upon any others. 191 S. W. (2d) 137.

The respondent does not contend that the federal court could have exercised original jurisdiction of this suit at the time it was filed nor at the time the former judgment was rendered. The contrary is conceded in its petition for removal in the trial court, in its brief in the court of civil appeals, and in its answer in this court. Its sole contention in this respect is that the cause became removable subsequent to the former trial when the total demand, by reason of the accrual of interest as damages, grew into an amount in excess of $3,000.00. The question to be decided is simply whether a cause which admittedly was not within the jurisdiction of the federal court at the time it was filed, nor at any time before the defendant was required to answer, became removable when the claim by the mere passage of time, and not through any volunteer act of the plaintiff, ripened into a demand in excess of $3,000.00 and thus within the jurisdiction of the federal court.

By virtue of Sec. 41, Title 28 U. S. C. A., the federal district courts have original jurisdiction of civil suits when the amount in controversy, exclusive of interest and costs, exceeds $3,000.00.

Sec. 71, Title 28 U. S. C. A., provides that any civil suit in any State court between citizens of different states may be removed to the federal court when the federal court has original jurisdiction of the cause.

Sec. 72, Title 28 U. S. C. A., provides that any party entitled *426 to remove any suit mentioned in section 71, except suits removable on the ground of prejudice or local influence, may make and file a verified petition in the State court “at the time, or at any time before the defendant is 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 * * *.”

In determining the jurisdictional amount the interest on past due installments of compensation, affirmatively alleged and demanded by petitioner, is not interest by name but damages, and as such must be considered as part of the amount in controversy for the reasons stated in the opinion of the court of civil appeals. Standard Acc. Ins. Co. v. Stanaland, 285 S. W. 878, writ refused; Bankers Lloyds v. Pollard, 40 S. W. (2d) 859, writ refused; Baker v. Smelser, 88 Texas 26, 29 S. W. 377, 33 L. R. A. 163; City of Texarkana, Tex. v. Arkansas Louisiana Gas Co., 118 F. (2d) 289; Brown v. Webster, 156 U. S. 328, 15 Sup. Ct 377, 39 L. Ed. 440.

However, we are not in accord with the holding that the cause became removable when the claim, by reason of the accrual of interest on past due installments, exceeded the required jurisdictional amount. In our discussion of this question we must limit ourselves to the principles governing the removal of causes on the sole ground here involved — that of diverse citizenship.

It is generally held that in passing upon a petition for removal based upon diverse citizenship the amount in controversy is determined solely from the allegations of the complaint or petition at the time of the commencement of the suit when the court is first called upon to exercise jurisdiction. Great Northern Railway Co. v. Alexander, 246 U. S. 276, 28 S. Ct. 237 62 L. Ed. 713.

The court of civil appeals recognized this rule but held that this cause comes within a well known exception thereto which it quoted from Cyclopedia of Federal Procedure, 2d Ed., Vol. 2, Sec. 416, page 334, as follows:

“When removability of .an action does not exist or does not appear from the complaint, but the cause of action or amount demanded or parties are later changed by voluntary action of the plaintiff, although after the original time for defendant to plead, and therefore after the time ordinarily fixed for removal, the defendant becomes entitled to apply for removal when such change occurs.”

*427

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Bluebook (online)
198 S.W.2d 85, 145 Tex. 422, 1946 Tex. LEXIS 150, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ritchie-v-american-surety-co-of-new-york-tex-1946.