Opinion
4 Div. 644.
October 6, 1932.
Appeal from Circuit Court, Covington County; Emmet S. Thigpen, Judge.
C. B. Fuller, of Opp, and E. O. Baldwin, of Andalusia, for appellant.
A nonresident plaintiff bringing suit in the state court for less than $3,000 may remove it to the federal court when the defendant sets up a cross-demand in excess of that amount. San Antonio Suburban Irrigated Farms v. Shandy (D.C.) 29 F.(2d) 579; Mason City Ft. D. R. Co. v. Boynton, 204 U.S. 570, 27 S.Ct. 321, 51 L.Ed. 629; Merchants' H. L. Co. v. James B. Clow Sons, 204 U. S. 286, 27 S.Ct. 285, 51 L.Ed. 488; Block v. Darling, 140 U.S. 234, 11 S.Ct. 832, 35 L.Ed. 476; Niccum v. Northern Assur. Co. (D.C.) 17 F.(2d) 160. Upon filing of a proper petition for removal and bond, jurisdiction of the state court ceases and that of the federal court attaches eo instanti. 54 C. J. 334; 28 USCA § 72; Stix v. Keith, 90 Ala. 121, 7 So. 423; Ex parte Consolidated Graphite Corp., 221 Ala. 394, 129 So. 262. A party failing to obtain a removal loses none of his rights by defending the action in the state court, when forced to trial. Stix v. Keith, supra. Where pleadings claim improper items of damage, the appropriate remedy is by motion to strike. Gilliland v. Hawkins, 216 Ala. 97, 112 So. 454; Carolina-Portland C. Co. v. Ala. Const. Co., 162 Ala. 380, 50 So. 332. An action sounding in damages merely is not available as a set-off under our statutes. Barnes v. Marshall, 193 Ala. 94, 69 So. 436. Mutual debts and demands, not sounding in damages merely, must be subsisting between the parties at the time the action is brought, to support a plea of set-off and recoupment. Bostick v. Scruggs' Ex'rs, 50 Ala. 10; Code 1923, § 10172; Lehman v. Austin, 195 Ala. 244, 70 So. 653. Defendant may contest the ground of attachment in the main suit, but action on the bond must be brought in a separate suit. Dishman v. Griffis, 198 Ala. 664, 76 So. 966. For defense of the original suit, for defense by plaintiff of the garnishment suit, and for the expense of bringing an action on the bond, plaintiff has no right to recover. Hays v. Anderson, 57 Ala. 374.
A. R. Powell and Powell, Albritton Albritton, all of Andalusia, for appellee.
On petition to remove to the federal court, the amount in controversy is determined from the initial pleading filed in the case. Atchison, T. S. F. R. Co. v. Phillips (D.C.) 13 F.(2d) 254; Pinel v. Pinel, 240 U.S. 594, 36 S.Ct. 416, 60 L.Ed. 817; Falls Wire Mfg. Co. v. Broderick (C. C.) 6 F. 654; La Montagne v. T. W. Harvey Lbr. Co. (C. C.) 44 F. 645; Bennett v. Devine (C. C.) 45 F. 705; McKown v. Kan. T. Coal Co. (C. C.) 105 F. 657; Harley v. Firemen's Fund Ins. Co. (D.C.) 245 F. 471; Price Hart v. T. J. Ellis Co. (C. C.) 129 F. 482; Glover Mach. Works v. Cooke Jellico Coal Co. (D.C.) 222 F. 531. Attorney's fees claimed in the complaint are considered as a part of the amount claimed in determining whether it is above $3,000. Nathan v. Rock Springs Dist. Co. (C.C.A.) 10 F.(2d) 268; Rogers v. Riley (C. C.) 80 F. 759; Springstead v. Crawfordsville State Bank, 231 U.S. 541, 34 S.Ct. 195, 58 L.Ed. 354; Le Roy v. Hartwick (D.C.) 229 F. 857; 28 USCA § 41 (1), note 364, p. 139. The right of removal is given only to a defendant, who has not submitted himself to that jurisdiction, not to an original plaintiff who, by resorting to that jurisdiction, has become liable under the state court to a cross-action. West v. Aurora, 6 Wall. 139, 18 L.Ed. 819. On amendment of the pleas to claim less than $3,000, the petition to remove was properly denied. Stone v. South Carolina, 117 U.S. 430, 6 S.Ct. 799, 29 L.Ed. 962; Bahls v. Welfare Loan Soc. (D.C.) 17 F.(2d) 379; Lee v. Continental Ins. Co. (D.C.) 292 F. 408. Plaintiff's right of action against the bond accrued the moment it was given. Donnell v. Jones, 13 Ala. 490, 48 Am. Dec. 59. Section 10172 of the Code has been modified, and the rights of defendant enlarged by section 10180. The demand of plaintiff and that set up by defendant need not be mutual. Defendant's cause of action existed either by way of set-off or recoupment at the time the garnishment was sued out, and the pleas are good. The defendant could have brought an independent suit at common law on the bond the moment the garnishment was sued out, he could therefore assert the same right by its cross-action of set-off or recoupment. International Harv. Co. v. Iowa Hardware Co., 146 Iowa, 172, 122 N.W. 951, 29 L.R.A. (N.S.) 272; Liversage v. Gibson, 222 Ala. 672, 133 So. 715, 716; Ewing v. Shaw Co., 83 Ala. 333, 3 So. 692; Vol. 14, Third Decennial Digest, Garnishment, 250, page 92; Norton v. Bumpus, 221 Ala. 167, 127 So. 907; Ala. Power Co. v. Kendrick, 219 Ala. 692, 123 So. 215; Hatchett v. Gibson, 13 Ala. 596. Damages in recoupment, whether liquidated or unliquidated, may be recovered. Lysle Milling Co. v. North Alabama Grocery Co., 201 Ala. 222, 77 So. 748. The demand upon which recoupment is based need not have subsisted at the time the original suit was brought. Martin v. Hill, 42 Ala. 275; Morris v. Scott, 198 Ala. 121, 73 So. 395; McRight v. Farned, 200 Ala. 618, 76 So. 975.
Action of assumpsit by the appellant against appellee on three promissory notes, two for $1,200 each and the other for $1,196.66, the plaintiff in its complaint conceding that defendant had paid $905.74 on said indebtedness.
In addition to the sum claimed to be due on the notes — $2,690.92 — the plaintiff claimed the sum of $450 as a reasonable attorney's fee, stipulated to be paid in said notes, making the total sum claimed, exclusive of interest and cost, $3,140.92, and at the time the plaintiff filed its suit, because of the diversity of the citizenship of the parties, the suit could have been rightfully brought in the United States District Court. Ætna Life Insurance Company v. Moore, Adm'r, 231 U.S. 543, 34 S.Ct. 186, 58 L.Ed. 356.
Therefore, if it should be conceded that the federal statute gives a nonresident plaintiff, who has sued in the state court because his claim is not sufficient in amount to give the United States Court jurisdiction, the right of removal upon filing by the defendant of a plea of recoupment or set-off claiming an amount within the jurisdiction of the United States District Court, as some of the decisions seem to hold, the plaintiff in the instant case had no such right, and is bound by its election to sue in the state court. West v. Aurora, 6 Wall. 139, 18 L.Ed. 819; 23 R. C. L. 729, § 114.
However, we are of opinion that section 28 of the Judicial Code, section 71 of U.S. Code Anno., limits the right of removal to the defendant; the pertinent language of the statute being that: "Any other suit of a civil nature, at law or in equity, of which the district courts of the United States are given jurisdiction, in any State court, may be removed into the district court * * * by the defendant or defendants therein, being nonresidents of that State." U.S. Code Anno. § 71, title 28, page 3, and note 665, page 335; Hanrick v. Hanrick, 153 U.S. 192, 14 S.Ct. 835, 38 L.Ed. 685; 23 R. C. L. 728, § 113.
The petition of the plaintiff praying for an order of removal of the cause to the United States Court was therefore properly denied.
The plaintiff, by making affidavit and giving bond as required by sections 8053, 8054, Code, had a writ of garnishment issued to the United States Fidelity Guaranty Company, in and of its pending suit.
The defendant, along with the plea of the general issue, filed special pleas 2, 3, 4, and 5. Plea 3 was eliminated by the ruling on demurrer, and pleas 4 and 5 were stricken by amendment. The demurrers of plaintiff to plea 2 were overruled. This plea (2), after averring "that the issuance of said writ of garnishment was not necessary to obtain satisfaction of the plaintiff's demand * * * and that said garnishment was sued out without probable cause and for the purpose of vexing or harassing this defendant," further avers that, as a consequence of the issuance of the garnishment, the defendant was injured; that its commercial standing was affected and its ability to purchase goods in the markets and obtain extensions of credit, not only as to the purchase of goods, but as to debts already owing by defendant, was greatly lessened, causing defendant great loss and damage; that, on account of the wrongful and vexatious suing out of said garnishment, it became necessary for defendant to employ counsel for the purpose of establishing its claim for damages arising from said wrongful garnishment, and the reasonable value of such service was $1,000; that by reason of the wrongful suing out and the prevailing general depression throughout the country generally it had been damaged in the sum of $10,000, which it offers to recoup against the demand of plaintiff, and claims judgment for the excess.
The demurrer takes the point that "the demand of defendant as set up in said plea did not spring out of the transaction upon which plaintiff's suit is founded."
As was observed in Craft v. Standard Acc. Ins. Co., 220 Ala. 6, 123 So. 271, 273: "The statute (Code of 1923, § 10179) has not enlarged the class of claims that may be pleaded by the defendant in recoupment or reconvention of plaintiff's claim, and leaves such matter to be adjudged on the settled principles of the common law which defines recoupment 'as the right of the defendant, in the same action, to claim damages from the plaintiff, either because he has not complied with some obligation of the contract upon which he sues, or because he has violated some duty which the law imposes on him in the making or performance of the contract.' Lawton v. Ricketts, 104 Ala. 430, 16 So. 59; Carolina-Portland Cement Co. v. Alabama Const. Co., 162 Ala. 380, 50 So. 332; Merchants' Bank v. Acme Lumber Mfg. Co., 160 Ala. 435, 49 So. 782; Grisham v. Bodman, 111 Ala. 194, 20 So. 514; Washington v. Timberlake, 74 Ala. 259. "
It is too clear to permit of controversy that the claim asserted by the defendant's plea is not within these principles. The damages claimed do not arise from a noncompliance by plaintiff with any obligation of the contract, nor do they arise from the violation of a duty imposed by law in the making or performance of the contract. The alleged abuse of civil process is in no way connected with the transaction — the sale and delivery of the goods, by plaintiff to defendant, and the execution of the notes therefor by defendant — but arises subsequent thereto after that transaction had been completed and the contract breached by the defendant in its failure to pay.
The demurrer was well taken, and the court erred in overruling it. Craft v. Standard Acc. Ins. Co., supra; Norton v. Bumpus, 221 Ala. 167, 127 So. 907.
The defendant, by pleading specially, after pleading in short by consent, waived its right to rely on plaintiff's consent to plead in short. Brown v. McKnight, 216 Ala. 660, 114 So. 40.
And, in the absence of an appropriate plea of partial failure of consideration, evidence going to show that the lavatories, the price of which was included in the notes and constituted in part the consideration thereof, were defective, was not admissible, and the court erred in admitting such testimony over the plaintiff's objection. Formby v. Whitaker, ante, p. 154, 142 So. 536.
For these errors, the judgment must be reversed.
Reversed and remanded.
ANDERSON, C. J., and THOMAS and KNIGHT, JJ., concur.