Pruitt v. Charlotte Power Co., 165 N.C. 416 (1914)

April 29, 1914 · Supreme Court of North Carolina
165 N.C. 416

MYRTLE L. PRUITT, Administratrix, v. CHARLOTTE POWER COMPANY.

(Filed 29 April, 1914.)

1. Removal of Causes — Federal Courts — Petition and Bond — Time for Filing — Answer—Statutes.

Tlie filing of the petition and bond by a foreign defendant for the removal of a cause from the State to tlie Federal court for diversity of citizenship comes too late after the expiration of the statutory time allowed for answer.

2. Removal of Causes — Federal Courts — Jurisdiction—Waiver—Time to Plead.

An agreement between the parties, approved by the court, ■ allowing a nonresident defendant time in which, to answer the *417complaint, is a waiver by tbe defendant of bis right to remove tbe cause to tbe jurisdiction of tbe Federal court, tbougb ,tbe subject-matter is witbin tbe jurisdiction of that court; and especially so, on appeal to our Supreme Court, where'it is found by tbe lower court that tbe order allowing time to answer was filed before tbe filing of tbe petition for removal.

3. Removal of Causes — Federal Courts — Pleadings — Joint Tort— Fraudulent Joinder — -Allegations—Jurisdiction—Certiorari—Ap-peal and Error — U. S. Supreme Court.

Where several defendants are sued for tbe same tort, tbe allegations of the complaint are determinative as to whether they are sued jointly or severally; and where a joint tort is alleged against a resident and nonresident defendant, and in proceedings to remove to tbe Federal court tbe nonresident alleges that tbe joinder was made in fraud of tbe jurisdiction of that court, general or broadside allegations of that character are insufficient to stop eo instanti tbe proceedings in tbe State court and leave tbe determination of tbe question of tbe fraudulent joinder exclusively to tbe courts of Federal jurisdiction.' But in such instances a certiorari for tbe transcript of tbe record may issue out of tbe Federal court, which tbe clerk of tbe State court is bound to obey, and tbe cause may proceed through these two separate channels to tbe Supreme Court of tbe United States.

Appeal by defendant from Harding, J., at November Term, 1913, of Mecklenburg.

J. Laurence Jones, Stewart & McRa'e, and Shannonhouse & Jones for plaintiff.

Osborne-and Coche & Robinson for defendants.

Clark, 0. J.

Tbis is an appeal from tbe refusal of a motion to remove tbe cause to tbe United States District Court. Tbe summons was served 7 August, 1912, returnable to September term of tbe Superior Court of Mecklenburg. Complaint was filed on 25 September, 1913. On 11 October tbe defendant asked for time to file answer until tbe last day of tbe next term of tbe court, and by consent of tbe plaintiff tbe order was made accordingly, and thereafter, on tbe same day, tbe defendant’s counsel presented to tbe court tbe petition and bond for tbe removal of tbe cause.

*418The entering into the stipulation for an extension of time to file the answer, which was duly approved by the judge, was a general appearance in the State court and waived the right to remove. It was an acceptance of the jurisdiction of the State court. Howard v. R. R., 122 N. C., 944; Dufy v. R. R., 144 N. C., 23. The provision in the agreement that the stipulation should be made an order of court does not affect the matter, especially as the judge finds that the order was signed before the petition and bond for removal were presented to the court. Though there is some authority that where an order of court is made extending the time to answer the time therein specified will be considered the day when the answer is due, .yet the greater weight of authority is “a petition for removal filed after the statutory time has expired comes too late even though filed within the time allowed for answering by order of 'the court, where such order is based on the stipulation of the parties.” Bank v. Keater, 52 Fed., 377; Austin v. Gagan, 39 Fed., 626; Velay v. Indemnity Co., 40 Fed., 545; Martin v. Carter, 48 Fed., 596; Mining Co. v. Hunter, 60 Fed., 305; Shippior v. Cordage Co., 72 Fed., 803; Heller v. Lumber Co., 178 Fed., 111; Wayt v. Standard Co., 189 Fed., 231.

Besides, the petition to remove does not sufficiently allege a fraudulent joinder. “Where resident defendants are joined with a nonresident, and the latter applies for removal for fraudulent joinder, the question of fraud can be raised only by stating facts from which the fraudulent, joinder necessarily appears, and not by a single averment of fraud or by alleging fraud in general though positive terms that the residents were joined for the sole purpose of applying for removal, and not with the honest intent of seeking relief against them.” Smith v. Quarries Co., 164 N. C., 351.

The complaint filed by the plaintiff states a joint cause of action against each of the defendants. All three defendants are charged with operating and maintaining (as principal and subsidiary companies) a line of wire which caused the death of the plaintiff’s intestate. It is fundamental as well as elementary that the allegations set out in the complaint are to be construed *419by tbe State court as true, upon tbe petition for removal. “Whether there was a joint liability or not, was a question to be determined upon tbe averment of tbe plaintiff’s statement of bis cause of action, and is a question for tbe State court to decide.” R. R. v. Sheegog, 215 U. S., 308. Tbe motive of tbe plaintiff taken by itself does not affect tbe right to remove. R. R. v. Schwyhart, 227 U. S., 184.

In Staton v. R. R., 144 N. C., 135, it was held: “Two defendants participating in tbe commission of a tort to tbe injury of tbe plaintiff are jointly and severally liable, and when tbe plaintiff has proceeded against them in a single action tbe cause is not separable, and cannot be removed by foreign defendants to tbe Federal court, though different answers may be made and different defenses relied upon.” In Hough v. R. R., 144 N. C., 692, tbe Court said: “At common law and under Eevisal, 469, an action in tort against several defendants is joint or several according to tbe declarations in tbe complaint, and tbe plaintiff’s election determines tbe character of tbe tort, whether joint or several,” and further says: “Tbe mere allegation in tbe petition of tbe foreign defendants that tbe joinder of tbe resident with tbe foreign defendant was a device of tbe plaintiff for' tbe fraudulent purpose of defeating tbe defendant’s right of removal is insufficient.”

In this case tbe complaint alleges joint ownership and joint negligence against all these defendants, and on tbe face of' tbe complaint a joint cause of action is allege'! against each of tbe defendants, one of whom is a resident of this State. It is not material that tbe actual purpose of tbe plaintiff in joining tbe resident defendant was to prevent tbe removal to tbe Federal court. Armstrong v. R. R., 192 Fed., 608; R. R. v. Dowell, 229 U. S., 102.

It is time that when a verified petition for removal is filed, accompanied by a proper bond, "and tbe petition contains facts sufficient to require a removal under tbe statute, tbe jurisdiction of tbe State court is at an end. But this applies only when tbe allegations of fact are such as to authorize tbe right of removal, and not when tbe petition on tbe ground of alleged fraudulent *420joinder merely asserts, as in this case, fraud and bad faith in general terms, without a full and direct statement of facts sufficient to demonstrate a fraudulent purpose. 'Where such facts are sufficiently alleged, and there is k denial, then the issue arising must be determined by the Federal court. Smith v. Quarries Co., supra.

Rea v. Mirror Co., 158 N. C., 24, relied on by the defendant, differs from this case. In that case, upon the filing of the petition for removal, the plaintiff, took á voluntary nonsuit, and brought a new action against the defendant company, joining its treasurer as a party defendant. This fact was alleged in the petition for removal, and sufficiently alleged bad faith on the part of the plaintiff.

In this ease the plaintiff has sued three defendants, alleging a joint’cause of action against them all, and the only allegation is the charge of bad faith and that the resident defendants are not guilty of negligence and did not own or operate the wire. All the latter allegations are mere matters of proof and defense, and there was nothing presented in the State court, other than this “broadside” allegation, upon which it could base a finding as to the charge of fraudulent joinder.

It is well settled that the State court should not surrender its jurisdiction unless the petition shows upon its face a removable cause and unless such petition and accompanying bond are filed in the State court within the time required by the act of Congress. R. R. v. Daugherty, 138 U. S., 298; Stone v. S. C., 111 U. S., 430; Howard v. R. R., 122 N. C., 944; Corporation Commission v. R. R., 151 N. C., 441; Higson v. Insurance Co., 153 N. C., 38. Whether the petition in its tenor, and time of filing, authorizes the removal is a matter for decision by the State court in. the first instance.

That court is not paralyzed by the simple presentation of a petition to remove. It is true, the Federal court may, notwithstanding the refusal of the State court to remove, send a cer-tiorari to the State court fox the transcript of the record, which the clerk of the State court must obey. In such case, as was said in Howard v. R. R., 122 N. C. at p. 953: “The strange spec*421tacle may be presented of tbe same, cause between tbe same parties being fried at tbe same time in tbe State court and in tbe Federal court, and finally going up to tbe United States Supreme Court by different routes. Upon tbe final decision of tbat tribunal, tbe proceedings of tbe court wbicb is beld not to bave bad jurisdiction are simply a nullity. Sucb unseemly cases bave occurred, but rarely (Carson v. Hyatt, 118 U. S., 279; R. R., v. Koontz, 104 U. S., 5), owing both to tbe comity of tbe courts of tbe two jurisdictions to each other and tbe unwillingness of counsel to subject themselves to double labor and their clients to double costs.” This matter is. fully discussed aiid so beld by Chief Justice Waite in Stone v. S. C., 117 U. S., 430; see, also, Higson v. Insurance Co., 153 N. C. at p. 42.

Tbe refusal of tbe motion to remove is

Affirmed.