Under the Act of March 3, 1875, 18 Stat. 470, a suit cannot be
removed on the ground of citizenship unless the requisite
citizenship existed both when the suit was begun and when the
petition for removal was filed.
Gibson v. Bruce,
108 U. S. 561,
cited and followed.
A substituted party comes into a suit subject to all the
disabilities of him whose place he takes so far as concerns the
right of removal of the cause.
Cable v. Ellis,
110 U. S. 389,
approved.
This was an appeal from an order of the circuit court remanding
the cause back to the state court from whence it had been removed.
The facts are stated in the opinion of the Court.
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
This is an appeal from an order remanding a cause removed from a
state court. The record shows that the suit was begun by Shirley,
the appellee, a citizen of Texas, on the 16th of July, 1870, in the
District Court of McLennan County, Texas, against the Waco Tap
Railroad Company, a Texas corporation, to recover a balance claimed
to be due on a contract for the construction of the railroad of the
defendant company. The company answered the petition on the 25th of
November, 1870. Supplemental petitions were filed on the 16th and
17th of December, 1872, bringing in the Houston and Texas Central
Railroad Company, another Texas corporation, as a defendant. The
case was tried to a jury on the second of February, 1875, and
judgment rendered in favor of Shirley. This judgment was reversed
by the supreme court of the state on the 28th of December, 1875,
upon a writ of error brought by the
Page 111 U. S. 359
Waco Tap Company, and on the 16th of March, 1877, the cause was
remanded to the district court for further proceedings. After the
case got back to the district court, the petition was several times
amended, to the effect that since the commencement of the suit the
road, roadbed, franchises, etc., of the Waco Tap Company had been
sold to the Houston and Texas Central Company under a deed of
trust, and that the Waco Tap Company had become merged in the
Houston and Texas Central Company. The Houston and Texas Central
and the Waco Tap companies answered this amended petition, and the
cause was again tried to a jury and a judgment rendered in favor of
Shirley on the 25th of November, 1878. This judgment also was
reversed by the supreme court of the state on the 16th of January,
1880, and the cause again remanded to the district court for
further proceedings.
A statute of Texas provides that:
"Whenever a sale of the roadbed, track, franchise, and chartered
powers and privileges [of a railroad company] is made, . . . the
directors or managers of the sold-out company at the time of the
sale, . . . shall be the trustees of the creditors and stockholders
of the sold-out company, and shall have full power to settle the
affairs of the sold-out company, collect and pay the outstanding
debts, and divide among the stockholders the money and property
remaining in their hands after the payment of the debts and
necessary expenses, and the persons so constituted trustees shall
have the authority to sue by the name of the trustees of such
sold-out company, and may be sued as such, and shall be jointly and
severally responsible to the creditors and stockholders of such
company to the extent of the property and effects which shall come
into their hands, and no suit pending for or against any railroad
company at the time the sale may be made of its roadbed, track,
franchise, and chartered privileges shall abate, but the same shall
be continued in the name of the trustees of the sold-out
company."
Paschal's Dig. 4916.
At the November term, 1881, of the district court, the petition
was again amended, and John T. Flint and others, all citizens of
Texas, who were directors of the Waco Tap Company
Page 111 U. S. 360
at the time of the sale of the roadbed, etc., brought in as
defendants. In this last amended petition, Shirley describes
himself as at that time a citizen of New York. Citations were
issued to the individual defendants on the 18th of April, 1882,
requiring them to appear and answer on the first Monday in May. At
the appointed time, they all appeared and filed a demurrer. On the
20th of May, they filed a petition, accompanied with the necessary
security, for the removal of the cause to the Circuit Court of the
United States for the Northern District of Texas. In the petition
it is stated that the individual defendants were at the time the
suit was commenced against them, and still continued to be,
citizens of Texas, and Shirely a citizen of New York, and "that the
main and essential controversy in this case is between the said
plaintiff and the said trustees, John T. Flint
et al.,
principal petitioners herein." The Houston and Texas Central
Railroad Company united in the petition, alleging
"that this suit or action, as against it, is purely incidental
and collateral to, and wholly depends upon, the plaintiff's right
to recover in his said suit or action against its codefendants
herein, the said John T. Flint
et al., trustees of the
said sold-out company, . . . for damages for breach of contract by
said sold-out company, now represented by said Flint
et
al., trustees."
The cause was docketed in the circuit court on the 2d of
October, 1882, and on the 6th a motion was made to remand. This
motion was granted on the 18th of October, and from the order to
that effect the present appeal was taken.
We think the circuit court was clearly right in sending the case
back to the state court. The suit was begun in 1870. At that time,
Shirley was a citizen of Texas. The proceeding to bring in the
trustees of the sold-out company was not the commencement of a new
suit, but the continuation of the old one. The trustees were
nothing more than the legal representatives of the company that had
been sold out, and took its place on the record as a party. The
suit remained the same, but with the name of one of the parties
changed.
In
Gibson v. Bruce, 108 U. S. 561, it
was decided that under the Act of March 3, 1875, c. 137, a suit
could not be removed
Page 111 U. S. 361
on the ground of citizenship unless the requisite citizenship
existed both when the suit was begun and when the petition for
removal was filed, and in
Cable v. Ellis, 110 U.
S. 389, that a substituted party comes into a suit
subject to all the disabilities of him whose place he takes, so far
as the right of removal is concerned. The record shows that Shirley
was a citizen of Texas when the suit was begun, and the right of
the railroad company to remove the suit, even if the necessary
citizenship had existed, expired with the first term of the state
court after the act of 1875 went into effect at which the case
could have been tried. Long after this time had elapsed the
railroad company filed an answer to an amended petition and
actually went to trial in the state court. This trial resulted in
another judgment against the company, which was also reversed by
the supreme court, and the case sent back for another trial. The
trustees were not brought in as parties until all this had been
done. It follows that the necessary citizenship did not exist at
the commencement of the suit, and that the petition for removal was
filed too late. Without considering any of the other questions in
the case,
We affirm the order to remand.