Opinion
(Dated 5 April, 1898.)
Practice — Removal of Causes — Time of Application — Diverse Citizenship — Separable Controversy.
1. A petition to remove a cause pending in a State court was filed by the defendant, and the order of removal made on 16 August; the order was filed in the office of the Superior Court of the county where the action was pending on 18 August, and on 25 August the notice of appeal was served on the petitioner for removal, and on 30 August the case on appeal was served: Held, that the appeal was perfected in due time.
2. The provision of the act of Congress regulating removal of causes from the State to the Federal court (25 U.S. Statutes, 435), to the effect that a petition for removal must be filed at or before the time defendant is required to plead "by the rules of the State courts," applies only to the general rules of the State courts and not to a special order allowing additional time to plead in a particular case.
3. Where an order was made on the motion of one party allowing both parties additional time in which to file pleadings, and no exception was made by the other party, the order is binding on both.
4. The requirement that a petition for removal of a cause from the Federal to the State court must be filed before the defendant is required to plead by the rules of the State court is imperative, and the time cannot be extended by stipulation of the parties.
5. An action in the nature of a creditor's bill to wind up the affairs of a corporation, to administer its assets among its creditors according to their respective rights, to establish a joint and several liability for its debts on the part of another corporation which sustained toward it the relation of a partner, and to sell land in which it is stated that both corporations have equitable interests as well as those persons represented by the defendant trustees, is but a single and inseparable controversy, and although one of the corporations is a nonresident it cannot have the cause removed to a Federal court on the ground of diverse citizenship.
6. Where, in an action in the nature of a creditor's bill, complete relief could not have been granted without the presence of all the defendants, even if plaintiff had elected to split up the action and sue one of defendant corporations for its assumption of the debt of the insolvent defendant corporation, the action is not separable so as to allow a removal to the Federal court on the ground of diversity of citizenship of the first named corporation.
(791) ACTION in the nature of a creditor's bill, filed by the plaintiff for and on behalf of himself and all other creditors of the Valleytown Mineral Company against said Valleytown Mineral Company, The Roessler and Hasslacher Chemical Company and R. L. Cooper, Ben Posey and J. F. Abernathy, Trustees, to which Geo. Hillyer, Ellen E. Hillyer and John Colvin became parties upon their voluntary petition, claiming the forfeiture of a certain lease by the Valleytown Mineral Company.
(794) At Spring Term, 1897, of CHEROKEE, Brown, J., made an order referring the cause to G.S. Ferguson, as a Master in Chancery, to inquire and report who were true creditors, etc. On 16 August, 1897, the said The Roessler and Hasslacher Chemical Company, without notice to the plaintiffs or any other parties to said suit, presented the petition set forth in the record to Norwood, J., at chambers at Asheville, who upon the hearing of said petition, and without the examination of the record, which plaintiffs insist would have contradicted the same, granted the order complained of, removing said cause to the Circuit Court of the United States and commanding that all other proceedings in the Superior Court of Cherokee be stayed.
The plaintiffs excepted to said order which was filed 18 August, 1897, and gave timely notice of appeal.
J. H. Dillard and Davidson Jones for plaintiffs.
J. H. Merrimon for defendants.
The summons was returnable to May Term, 1897, of CHEROKEE. The complaint and amended complaint were filed, judgment taken for want of an answer, and a referee appointed to state an account, a receiver having also been duly appointed before the return term. Notwithstanding the judgment appointing a referee recites that no answer had been filed, there is certified up to us this entry from the minutes "Thirty days leave to file amended complaint and sixty days thereafter to file answer." On 16 August, one of the defendants, The Roessler Hasslacher Chemical Co., a non-resident corporation, appeared before his Honor Judge Norwood, at chambers in Asheville, and filed a petition to remove on the ground of diverse citizenship, alleging a separable controversy, the other defendants being residents of this State. The judge ordered the cause removed to the U.S. Circuit Court. The order was filed in the clerk's office in Cherokee County on 18 August, and on 25 August service of the plaintiff's notice of appeal was accepted by the defendant who had made the motion to remove, and on 30 August the plaintiff served his case on appeal. This was all in due time as to the appeal. The amended statute provides: "The appeal must be taken from a judgment rendered out of term within ten days after notice thereof, and from a judgment rendered (796) in term within ten days after its rendition (unless the appeal was taken at the trial)." Clark's Code, section 549. And the next section, 550, provides that the case on appeal shall be served "within ten days after the entry of appeal." Here, the judgment was filed and the plaintiff acquired notice on 18 August. The notice of appeal was accepted on 25 August, within ten days, and the case on appeal was served on 30 August, in ten days after the notice. When an appeal is taken at the trial, the case on appeal must of course be served within ten days from adjournment of the court, Delafield v. Construction Co., 115 N.C. 21; but the appellant has the right to reserve taking his appeal and enter it within ten days after adjournment of the court, in which case he has ten days after entry of the appeal to serve the case on appeal. The same applies to appeals from judgments taken out of term. Rule 27 of this Court is additional to, but does not restrict, repeal or abrogate any of the provisions of The Code, sections 549 and 550.
The case being here regularly, the plaintiff contends that the judge below erred in granting the removal. The State court has jurisdiction, and to be deprived of it there must be a strict compliance with the act of Congress, since the right of removal is purely statutory and only exists when the case falls within the terms of the law. The removal act of 1888 (25 U.S. Statutes at Large, 435) provides that a petition for removal must be filed "at or before the time at which the defendant is required to plead by the laws of the State, or the rules of the State courts. This was at the return term in May, Code, section 207. The defendant however contends that there was an order of the court allowing further time to answer, and the motion to remove being made within such time was within the time "allowed by the rules of (797) the State courts." But the decisions are uniform in all the courts that this means the general rules of the court (in those States in which the time of pleading is fixed by rules of court) and does not mean a special order or rule in a particular cause. There has been some conflict of decision in the Federal Courts as to whether the extension of time to answer did not extend the time to move for removal, by reason of its being a waiver of the statutory time. All the authorities seem to concur that, where the extension of time is by consent of parties, or by order of court based on such consent, the defendant loses his right by not moving at the term at which, without consent, he was required to answer. There is some conflict as to whether he loses the right by not moving at that term when the extension of time is in invitum. But, here, the entry, as in Howard v. R. R., post, 944, does not appear affirmatively to have been made by the court. It was probably placed on the minutes by consent of parties, and if not, the defendant assented to it by not excepting thereto. He has lost no opportunity to remove by any act of the State court against which he objected, and under the act of Congress the time for him to make the motion expired at the Spring Term in May, 1897. The same point is fully discussed and authorities cited in Howard v. R. R., supra, post, 944.
This is a creditors' bill to wind up the affairs of an insolvent corporation, to administer its assets among its creditors according to their respective rights, to establish a joint and several liability for its debts on the part of another corporation (the appellee), which sustained to it the relation of a partner, and to sell land in which it is stated that both corporations have equitable interests as well as those persons (798) represented by the defendant trustees, and is but a single controversy. Even if the plaintiff had elected to split the action up, and had sued the appellee for its assumption of the debt, he could not have subjected the land without the presence of all the defendants. The Valleytown Mineral Company and the trustees (all citizens of this State), are necessary and indispensable parties, and there is no such separable cause of action against the appellee as entitled it to a removal even if the petition and bond had been filed in time. Springer v. Sheets, 115 N.C. 370; Faison v. Hardy, 114 N.C. 429; Hyde v. Ruble, 104 U.S. 407; Blake v. McKim, 103 U.S. 336; Removal Cases, 100 U.S. 457.
The appellant also objects that the order of removal should have been made during a term of court in which the action was brought, and not at chambers in another county, and without notice to the plaintiff. But as the other two points are with the plaintiff, it is unnecessary to discuss this.
The order removing the cause is reversed, and the Court below will proceed regularly as if the motion had not been made. Bradley v. R. R., 119 N.C. 74; Howard v. R. R., post, 944.
Reversed.
(799)