Texas Pacific Railway Company v. Eastin & Knox/Opinion of the Court

by Joseph McKenna

United States Supreme Court

214 U.S. 153

Texas Pacific Railway Company  v.  Eastin & Knox

 Argued: April 23, 1909. --- Decided: May 17, 1909

The assignments of error present the question of the right of the Texas & Pacific Company to a removal of the case to the circuit court of the United States (1) Because, being a corporation chartered under an act of Congress, the suit was one arising under the laws of the United States, and that this character was not taken from it by joining a local defendant when it was an action to establish a joint liability. (2) Where the facts stated in the petition for removal show a cause properly removable from a state to a Federal court, the state court has no jurisdiction to pass finally upon them; that right is one for the Federal court, it having exclusive province of passing upon such questions of fact.

The first proposition is sustained in Re Dunn, 212 U.S. 374, 53 L. ed.-, 29 Sup. Ct. Rep. 299; the second proposition is sustained in Chesapeake & O. R. Co. v. McCabe, 213 U.S. 207, 53 L. ed.-, 29 Sup. Ct. Rep. 430. The latter case also decides that, if an application for removal be denied, the petitioner loses no right by being compelled to stay in the state court. In other words, that the petitioner may stay in the state court and defend the action against him, and, if the judgment go against him, bring the case to this court, and have the question of removal determined. But plaintiffs in error did not defend only against the cause of action. They instituted a cause of action against the St. Louis & San Francisco Railroad Company, in which the defendant in error had no concern, and recovered a judgment against that company in the sum of $1,800. By doing so they invoked the jurisdiction of the state court on their own account and for their own purpose, and the case is brought within the ruling in Merchants' Heat & Light Co. v. J. B. Clow & Sons, 204 U.S. 286, 51 L. ed. 488, 27 Sup. Ct. Rep. 285.

The single question in this court in that case was the jurisdiction of the circuit court from which the case came. The Merchants Heat & Light Company, an Indiana corporation, contended that no jurisdiction had been obtained over it by the service which was made upon one Schodd, who, it was asserted by the plaintiff in the action, was an agent of the company. A motion to quash the return of service was made and overruled, and thereupon the company, after excepting, appeared as ordered and pleaded the general issue, and also a recoupment or set-off of damages under the same contract sued upon, and overcharges in excess of the amount ultimately found due to the plaintiff. There was a finding for the plaintiff of $9,082.21.

Whether the company was doing business in the state of Illinois within the meaning of the statutes of that state under which service was made, this court did not decide; but it did decide that the company, 'by setting up its counterclaim . . . became a plaintiff in its turn, invoked the jurisdiction of the court in the same action, and, by invoking, submitted to it.' And this, notwithstanding the counterclaim arose, as it was said, 'out of the same transaction that the plaintiff sued upon, and so to have been in recoupment rather than in set-off proper.' It was further said: 'There is some difference in the decisions as to when a defendant becomes so far an actor as to submit to the jurisdiction, but we are aware of none as to the proposition that when he does become an actor in a proper sense he submits.' And the Texas & Pacific Company was an actor against the St. Louis & San Francisco Company upon a cause of action upon which it was its own choice to bring into the suit. On that cause of action it obtained a judgment against the St. Louis & San Francisco Company, and succeeded in having it affirmed by the supreme court of the state.

It would be carrying too far the right of a party who has petitioned for removal of a case to extend it beyond what is necessary to defend against the cause of action asserted against him. He should not be permitted to invoke the jurisdiction for affirmative relief and deny it afterwards. It must be remembered how amply his right of removal is protected. He may file the record in the circuit court of the United States, and thereby completely take jurisdiction from the state court.

Judgment affirmed.

Mr. Justice Peckham and Mr. Justice Day dissent.

Notes