Opinion
No. 34046.
March 11, 1940. Suggestion of Error Overruled April 8, 1940.
1. REMOVAL OF CAUSES.
Under federal statute requiring petition for removal to be filed on or before defendant is required by law of state or rules of state court to plead to the declaration or complaint, the limitation on time within which petition for removal may be filed is not jurisdictional and may be waived or the opposing party may be estopped by his conduct from objecting (Jud. Code, sec. 29, 28 U.S.C.A., sec. 72).
2. REMOVAL OF CAUSES.
If a party causes record to disclose a nonremovable case at time defendant should plead, answer, or demur, but afterwards discloses one that is removable, a petition for removal of cause to federal court may then be filed (Jud. Code, sec. 29, 28 U.S.C.A., sec. 72).
3. REMOVAL OF CAUSES.
In a removal proceeding, the motive of a plaintiff in joining defendants is immaterial provided there is in good faith a cause of action against those joined (Jud. Code, sec. 29, 28 U.S.C.A., sec. 72).
4. REMOVAL OF CAUSES.
A plaintiff in good faith may proceed in state court against resident and nonresident, upon a cause of action which plaintiff alleges to be joint, but court should not sanction devices intended to prevent removal to federal court where one has that right (Jud. Code, sec. 29, 28 U.S.C.A., sec. 72).
5. REMOVAL OF CAUSES.
When plaintiff alleges a cause of action against both a resident and a nonresident defendant, but makes no attempt at trial to prove the alleged cause of action against the resident defendant, and evidence discloses that when plaintiff filed his declaration he did not intend to attempt to prove and could not have proved the alleged cause of action against the resident, the court on application of nonresident defendant should decline to proceed further with trial and should direct that cause be removed to federal court (Jud. Code, sec 29, 28 U.S.C.A., sec. 72).
6. REMOVAL OF CAUSES.
Where occupant of truck alleged that collision resulting in his injuries was caused by negligence of both resident defendant, the driver of truck in which occupant was riding, and driver of nonresident defendant's truck, but record disclosed that occupant had no cause of action against resident defendant, and that occupant's counsel stated that his purpose in joining resident was so that case might be "tried in this county" instead of some other place, denial of nonresident's motion for transfer of case to federal court was error (Jud. Code, sec. 29, 28 U.S.C.A., sec. 72).
APPEAL from the circuit court of Harrison county; HON. L.C. CORBAN, Judge.
Leathers, Wallace Greaves, of Gulfport, for appellant.
The removal proceedings were instituted pursuant to, and in conformity with, the provisions of Sections 71 and 72, Title 28, United States Code Annotated, governing the removal of civil suits out of state courts and into the proper district courts of the United States.
The grounds for the removal proceedings are fully set forth in the verified petition. The petition for the removal contains the requisite averments of fact respecting the diversity of citizenship between the plaintiff, the appellee here, and the petitioner, the appellant here, and as to the amount in controversy, which exceeds the sum of $3,000.00, exclusive of interest and costs of court. The petition also contains the requisite averments of fact showing the separability of the cause of action asserted in the declaration as a joint cause of action in favor of the plaintiff and against M.L. Wedgeworth, the resident defendant, and the appellant, the non-resident defendant, arising out of the fraudulent joinder of the resident defendant to defeat the jurisdiction of the District Court of the United States for the Southern Division of the Southern District of Mississippi and to defeat the appellant's legal right to effect a removal of the cause, as between the plaintiff, the appellee here, and itself from the court below into that federal court.
The verified petition for the removal of the cause, asserting the fraudulent joinder of the resident defendant by the plaintiff for the fraudulent purpose of defeating the jurisdiction of the federal court and the legal right of the appellant to effect a removal of the cause, the averments of which must be accepted as true, as well as the record of the other proceedings in the court below, clearly demonstrates that the allegations of fact respecting the asserted liability of the resident defendant for the injuries sustained by the appellee are palpably false; that no factual basis ever existed that would afford a reasonable justification for an honest belief that there was joint liability between the resident defendant and the non-resident defendant, it being the appellant here; that the joinder of the resident defendant in the suit by the plaintiff was a fraudulent device to defeat the jurisdiction of the federal court and the legal right of the appellant to remove the cause; and that such joinder was not made in good faith.
It must be noted that, under the true facts of this case, as they are disclosed by the record, the appellee never had a cause or right of action against Wedgeworth, the resident defendant.
Texas-Mexican Ry. Co. v. Hoy, 24 S.W.2d 18; Murphy v. Milheiser, 30 S.W.2d 586; El Paso Electric Co. v. Leeper, 60 S.W.2d 187; Magnolia Petroleum Co. v. Owen, 101 S.W.2d 354; Raub v. Rowe, 119 S.W. 190; Waggoner v. Simmons, 117 S.W.2d 553.
But under familiar law respecting the legal questions relating to the removal of causes from a state court into a federal court, and under the facts surrounding the appellant, as they are disclosed by the record, it was required to treat the averments of fact asserting liability against the resident defendant, as they appeared in the declaration, as true, until it was made to appear that the joint cause of action stated in the declaration was, in truth, a separable cause of action; and that the appellant could not initiate a removal proceeding in the cause until the removability was made to appear during the proceedings in the trial court. This is especially true in the light of the fact the appellant had in its possession the written statement signed by the resident defendant respecting the real cause of the accident, and it had no reason to anticipate that he would undertake to repudiate it at the trial, as he did do, while testifying as a witness on behalf of the appellee.
The verified removal petition, supported by a good and sufficient removal bond, was presented to the court, and the removal was disallowed by the court, at the conclusion of the testimony introduced on behalf of the appellee. Nothing appeared in the testimony adduced on behalf of the appellant indicating that the appellee had any reasonable ground upon which to base an honest belief that he ever had a cause or right of action against the resident defendant, even though his injuries resulted proximately from the negligence of such resident defendant; and, for all practical purposes, the removal petition was before the court, when counsel for the appellee, in his arguments to the jury urged and importuned the jury to return a verdict solely against the appellant, and to acquit the resident defendant of any liability to the appellee.
Certainly, the record here demonstrates, beyond cavil, that the resident defendant in the suit was fraudulently joined as co-defendant with the appellant for the fraudulent purpose of defeating the removal of the cause into the federal court; that the requisite facts relating to said fraudulent joinder are fully set forth in the verified petition for removal, which, under familiar law, the trial court was required to accept as true; and that the court committed grievous error in disallowing the removal.
It is too well-settled by the decisions of this court and by the decisions of the federal courts, including the Supreme Court of the United States, to admit of argument, that where a person is fraudulently joined in a suit for the sole purpose of preventing the removal of the cause into the proper district court of the United States, and without any intention of prosecuting the case against him, he must be considered merely a sham defendant — made so for fraudulent purposes — whose presence in the case must be ignored. From the record of the proceedings in the instant case, it is inescapable that Wedgeworth, the resident defendant, stands before the court as a purely sham defendant — joined in the suit for fraudulent purpose — and is well within the salutary rule that court will not sanction devices intended to fraudulently prevent a removal of a suit into the proper federal court, where one of the parties to the suit has that right; and, since the removal petition presents a case for removal on account of the fraudulent joinder of a resident defendant, and, since the provisions of the applicable law required the trial court to accept the averments of the petition as true, an order for removal should have been entered, and the cause removed into the District Court of the United States, for the Southern Division of the Southern District of Mississippi, at Biloxi.
Hercules Powder Co. v. Nix, 144 Miss. 113, 109 So. 862; Hercules Powder Co. v. Sistrunk, 145 Miss. 299, 110 So. 674; Wilson v. Republic Iron Steel Co., 257 U.S. 92, 42 Sup. Ct. 35, 66 L.Ed. 144; Chesapeake Ohio R. Co. v. Cockrell, 232 U.S. 542, 34 Sup. Ct. 278, 58 L.Ed. 544; I.C.R. Co. v. Sheegog, 215 U.S. 308, 30 Sup. Ct. 101, 54 L.Ed. 208; Wecker v. National Enameling Stamping Co., 204 U.S. 176, 27 Sup. Ct. 184, 51 L.Ed. 430, 9 Ann. Cas. 757; Lake County, Colo. v. Dudley, 173 U.S. 243, 19 Sup. Ct. 398, 43 L.Ed. 684; Powers v. Chesapeake Ohio R. Co., 169 U.S. 92, 18 Sup. Ct. 264, 42 L.Ed. 673; Northern Pacific R. Co. v. Austin, 135 U.S. 315, 19 Sup. Ct. 758, 34 L.Ed. 218; Dishon v. C.N.O. T.P. Ry. Co. (8th C.C.A.), 133 Fed. 471; Clancy v. Brown (8th C.C.A.), 71 F.2d 110; Leonard v. St. Joseph Lead Co. (8th C.C.A.), 75 F.2d 390; Allison v. Great A. P. Tea Co. (4th C.C.A.), 99 F.2d 507.
White Morse, of Gulfport, for appellee.
The removal proceedings were not instituted pursuant to or in conformity with Sections 71 and 72, Title 28 U.S.C.A.
It is admitted by counsel in his petition to remove and in his brief that the declaration states a joint cause of action against Wedgeworth, the resident defendant, and Sears Roebuck, the non-resident defendant. The declaration was filed on January 4, 1939, under the laws of this state. Appellant had until the first Monday in April, 1939, when circuit court convened in Harrison County, to either file a petition and bond for removal, or plead or demur to the declaration in the state court. Appellant chose to file a general plea of general issue on April 3, 1939. It waited until another term of court convened in September to file its notice under the general issue. It waited again until the second day of the trial of the case on its merits, then filed its petition and bond for removal. Appellant did not file a certified copy of the record in the United States District Court within thirty days as required by Section 72, Title 28, U.S.C.A., and has not filed it up until this time. How then can appellant say that the removal proceedings were instituted pursuant to and in conformity with Sections 71 and 72, Title 28 U.S.C.A.?
Appellant gave notice under the general issue that it was going to offer evidence and prove, first, that appellee and his comrades were engaged in the same enterprise and undertaking. Second, that it was being jointly directed and controlled by appellee and his comrades. Third, that Wedgeworth was guilty, proximately causing appellee's injuries, that it was a joint enterprise and Wedgeworth's negligence was appellee's negligence. Forth, that appellee was guilty of contributory negligence.
Then appellant, through its counsel, swears to a petition to remove the cause, saying that Wedgeworth was guilty of no negligence.
The law on the subject is well settled. We call the court's attention to the cases cited under Section 72, Title 28 U.S.C.A., note 98, pages 424-428.
Mecom, etc. v. Fitzsimmons Drilling Co., 284 U.S. 183, 76 L.Ed. 233, 52 S.Ct. 84, and cases cited therein; Hutson v. Imperial Royalties Co., 134 Kans. 378, 5 P.2d 825; 85 A.L.R. 799.
In the case at bar, Wedgeworth was a resident citizen of Harrison County. He was driving the locomotive when appellee was injured. The declaration stated a joint cause of action against Wedgeworth and appellant. Neither a nonsuit, nor a voluntary nonsuit was taken as to Wedgeworth, and therefore assignments of error IV and V are without merit.
Argued orally by R.A. Wallace, for appellant, and by Stanford E. Morse, for appellee.
A trailer attached to a truck in which the appellee was traveling on a highway in the State of Texas collided with a trailer attached to a truck owned by Sears, Roebuck Company and driven by one of its employees. Not quite, but almost, immediately thereafter the truck in which the appellee was riding turned over, fell on the appellee, and seriously injured him. The collision of the two trailers, according to the appellee, caused the truck to turn over. The appellee and Wedgeworth, the driver of the truck in which the appellee was traveling when injured, are citizens of Harrison County, Mississippi; and Sears, Roebuck Company is a corporation organized under the laws of, and domiciled in, the State of New York and doing business in Mississippi. This action is by the appellee against Sears, Roebuck Company and Wedgeworth, and his declaration alleges that the collision of the two trailers was caused by the negligence of both Wedgeworth and the driver of the Sears, Roebuck Company truck. Wedgeworth filed no plea to the declaration and introduced no evidence at the trial, except that he was introduced as a witness for and by the appellee. The appellee introduced no evidence whatever tending to show negligence on the part of Wedgeworth in causing the collision of the two trailers, but, on the contrary, all of the evidence introduced by him negatived any such negligence. He does not claim, and nothing in the evidence indicates, that when he filed his declaration he had any intention or expectation of proving the contrary. When the appellee closed his case, Sears, Roebuck Company filed a motion setting up this state of the evidence, alleging a fraudulent joinder of Wedgeworth as a defendant to the action for the purpose of preventing its removal to the Federal Court, and requesting that it be removed thereto. A proper bond therefor was filed by it. This motion was overruled and the trial proceeded.
While one of the appellant's counsel was arguing the case to the jury, he said: "Thank God, gentlemen of the jury, M.L. Wedgeworth was a citizen of this county, where he could join this defendant, and thank God we did not have to go to Texas to try this case before a laughing bunch of Texans; thank God we could bring this man back here, even though we brought him in pain and brace on his leg, thank God we could bring him here and try his case before a jury composed of citizens of this county, thank God we could try this case in this county before you men, before men who have known him, before men who have known of his work, affiliated with the United States as a valued employee of the Government, as a man who took part in social activities and charitable work of the Forty and Eight and American Legion; . . ."
The Court, at the request of the plaintiff instructed the jury as to the form of its verdict if it found against both defendants, or one of them only. Counsel for the plaintiff after reading the jury the instruction as to the form of the verdict if it found against Sears, Roebuck Company only said:
"`I will be frank to say to you, gentlemen of the jury, I don't know how you feel about it, but if I was on the jury I would adopt the last form against Sears, Roebuck Company only, because the evidence shows that it was the negligence of this man coming on there at the rate of forty miles an hour that has caused this man here to be in the shape he is in now.' `. . . and you swore the other day that you would give him a large verdict if you were satisfied that he was entitled to it, and as I have said Ralph Van Dolah is in the condition he is on account of the negligence of Sears, Roebuck Company.'"
"`. . . Mr. Greaves wanted to know why I joined Wedgeworth as a defendant in the case. Gentlemen of the jury, if I had not joined Wedgeworth as a defendant I would have had to try this case somewhere else except in this court room before his friends and before the people with whom he lived; I joined Wedgeworth as a defendant, yes, I joined him as a defendant, and this man's case is being tried in this county and in this court house instead of some other place; he has done the same thing, and every attorney who has practiced has done the same thing, joined a resident defendant with a non-resident defendant; . . .
"`. . . I joined Wedgeworth as a defendant and had to state a cause of action against Wedgeworth to try this case before you men, and if I had not I could not have tried it here, but I did and I am trying it here, trying it here before men who know this man. . . .
"`. . . As I said in the outset, there are three forms of verdict that you may return here, and when you write out your verdict don't write it on the ones here; and if I was on the jury I would return the last form.
"`. . . They asked me why I joined Wedgeworth, why I stated a cause of action against Wedgeworth. I stated a cause of action against him so I could try the case against them in Harrison County; it is a matter of law that need not be explained to you men, and a lot of things you can't bring out on the witness stand, you can't bring them out without reversible error.
"`. . . As I stated, in determining your verdict, take into consideration in arriving at your verdict the different forms of verdict you can render as shown by this instruction; and as I said if I was on the jury I would use the last form of instruction.'"
The form of instruction referred to by counsel was the instruction as to the form of the verdict if it should be against Sears, Roebuck Company only. Counsel for the defendant, Sears, Roebuck Company, here objected to this argument and requested a mistrial, which request was overruled, whereupon counsel for the plaintiff continued: "`. . . Gentlemen of the jury, I am not telling you what to do. He is asking for another mistrial. I am not telling you what verdict to render; I say if you believe the evidence of these men; and if I was on the jury I would render such a verdict: "We, the jury, find for the plaintiff against the defendant Sears, Roebuck Company only and assess his damages at $ ____." That will leave Wedgeworth out.
"`Gentlemen of the jury, you take this case and please consider it.'"
Counsel for Sears, Roebuck Company then, and before the jury retired from the bar for the consideration of its verdict, renewed his motion for the transfer of the case of the Federal District Court, which was overruled. The case was then submitted to the jury which returned a verdict against Sears, Roebuck Company only for $25,000.
Section 72, Title 28 U.S.C.A., provides that a petition for the removal of a case from a State Court to a Federal District Court must be filed on or before the defendant is required by the laws of the State or rules of the State Court to plead to the declaration or complaint. This limitation on the time within which the petition may be filed is not jurisdictional. It may be waived or the opposing party may be estopped, by his conduct, from objecting thereto. If he causes the record to disclose a non-removal case at the time the defendant should plead, answer, or demur, but afterwards to disclose one that is removable, a petition for its removal may then be filed. This has been frequently decided by the Supreme Court of the United States. ". . . in a removal proceeding the motive of a plaintiff in joining defendants is immaterial, provided there is in good faith a cause of action against those joined." Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S.Ct. 84, 87, 76 L.Ed. 233, 77 A.L.R. 904. "While the plaintiff, in good faith, may proceed in the state courts upon a cause of action which he alleges to be joint, it is equally true that the Federal courts should not sanction devices intended to prevent a removal to a Federal court where one has that right, and should be equally vigilant to protect the right to proceed in the Federal court as to permit the state courts, in proper cases, to retain their own jurisdiction." Wecker v. National Enameling Stamping Co., 204 U.S. 176, 27 S.Ct. 184, 188, 51 L.Ed. 430, 9 Ann. Cas. 757. What was here said as to the Federal courts applies with equal force to the state courts.
When the plaintiff alleges a cause of action against both a resident and a non-resident defendant and makes no attempt at the trial to prove the alleged cause of action against the resident defendant and the evidence discloses that when he filed his declaration he did not intend to attempt to prove, and could not have proved, the alleged cause of action against the resident defendant, the court on the application of the non-resident defendant should decline to proceed further with the trial and should direct that the case be removed to the Federal court. 4 Hughes, Federal Procedure, Sec. 2337, cases cited in the second paragraph of note 370, sec. 71, title 28 U.S.C.A., p. 216, particularly Dudley v. Illinois Central Railroad Company, 127 Ky. 221, 96 S.W. 835, 13 L.R. A: (N.S.) 1186, 128 Am. St. Rep. 335. To hold otherwise would put it in the power of a plaintiff to defeat a non-resident defendant's right to remove a case from a state court to a Federal court by merely joining with him a resident defendant against whom only a fictitious cause of action is alleged.
The record here discloses not only that the appellee had no cause of action against the resident defendant, but his counsel frankly so stated to the jury and said that his purpose in joining him as a defendant was that his case might be "tried in this county and in this courthouse instead of some other place . . . I stated a cause of action against him so I could try the case against them in Harrison County."
Reversed and remanded.