When all the defendants in a cause in a state court have
appeared and answered without filing counterclaims or raising new
issues, the cause is ready for trial and can be tried within the
meaning of § 3 of the Act of March 3, 1875, 18 Stat. 471.
When a cause is at issue and ready for trial in a state court,
and the limitation provisions of the Removal Act of March 3, 1875,
take effect, the right of removal is not revived by subsequent
amendments of the pleadings by leave of court which make new
issues, nor by the appearance of new parties whose interests are
represented by a party previously in the record.
When a cause is improperly removed from a state court and a
motion to remand it is overruled, that judgment is error which may
be corrected here.
The facts are fully stated in the opinion of the Court.
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
In the view we take of this case, it is only necessary to
consider the following facts:
James H. Edrington and J. T. Jefferson were partners in business
at Memphis, Tennessee. Upon the dissolution of the firm on or about
the 19th of March, 1874, Edrington and his wife, who is the
appellant in this case, conveyed certain lands in Arkansas, known
as the Whitmore and Fain Plantations, to John W. Jefferson, a
brother of J. T. Jefferson, in trust to secure the payment of 14
notes, amounting in the aggregate to $28,754.21, executed by James
H. Edrington to the trustee for the benefit of some of the
creditors of the firm whose names were set out in a schedule
attached. By the
Page 111 U. S. 771
terms of the trust, the trustee was empowered to advertise and
sell the property, if default should be made in the payment of the
notes. James H. Edrington died on the 12th of August, 1874, having
made a will by which he devised his property to his widow for
certain purposes and appointed her the executrix. The will was
admitted to probate, and letters testamentary granted to Mrs.
Edrington on the 31st of August.
On the 2d of December, 1874, John W. Jefferson, the trustee,
advertised the trust property for sale on the 21st of January,
1875, for default in the payment of the notes. On the 11th of
December, Mrs. Edrington, in her own right and as executrix, began
this suit in the Circuit Court of Mississippi County, Arkansas,
against John W. Jefferson, the trustee, John Matthews, George W. L.
Crook, and Emily R. Hazard and John Hazard, administrators of James
H. Hazard, deceased, to enjoin the sale and obtain a settlement of
the partnership accounts, the allegations being, among others, that
the deed of trust was procured by the fraud of J. T. Jefferson when
James H. Edrington was sick and incapable of transacting business,
and that in equity, J. T. Jefferson should pay the debts secured
thereby. Matthews and the representatives of James H. Hazard were
made parties as the holders of prior encumbrances on the trust
property. Among other allegations in the bill was one to the effect
that the trustee advertised the sale at the instigation of J. T.
Jefferson, rather than of the creditors who were the beneficiaries
under the trust. On the filing of the bill, a preliminary
injunction was granted and served on the trustee.
No summons was issued or served on any of the defendants, but on
the 1st of March, 1875, John W. Jefferson and J. T. Jefferson both
appeared and filed separate answers to the complaint, in which they
met all the charges in the bill and, among other things, alleged
that the prior encumbrances had been paid. Each answer concluded
with a prayer in the usual form that the respondent be dismissed,
with his costs. On the 3d of March, the defendant John Matthews was
appointed receiver of the property. At the same time, the bill was
dismissed as to Crook and the Washington Fire & Marine
Insurance
Page 111 U. S. 772
Company, the Planters' Insurance Company, J. C. Ward & Co.,
Appleton, Noyes & Co., and the North America Tie Company,
creditors of Edrington & Jefferson and beneficiaries under the
trust, were, on motion, admitted as defendants in the suit, and
given twenty days to file their answers and cross-bills. On the 4th
of March, 1875, the cause was continued by consent of parties until
the next term. At the September term, 1875, F. Banksmith & Co.
and Taylor Bros., other creditors and beneficiaries, were admitted
as defendants, and they, with the other creditors who had been
admitted before, were allowed ninety days to answer and file
cross-bills. Several orders connected with the administration of
the cause were passed at this term on motion of the different
parties. It does not appear from the record that the original
complaint was ever amended so as to name the intervening creditors
as defendants or to make any charges against them, other than such
as were contained in the complaint when the answers of the original
defendants, the Jeffersons, were filed. On the 26th of February,
1876, in vacation, the Washington Fire & Marine Insurance
Company and the other creditors who had been formally admitted as
defendants, with some other creditors, also beneficiaries under the
trust, filed an answer to the original complaint and a cross-bill.
To the cross-bill all the defendants in the original bill, except
Crook, were made defendants, and also the infant children of James
H. Edrington, and all the creditors of Edrington & Jefferson,
beneficiaries under the trust, who were not complainants. The
prayer was that the claims of the alleged prior encumbrancers might
be discharged or made subordinate to the trust; that the amount due
the several creditors might be ascertained, and that the property
might be sold to pay what was found due.
Answers were filed to the cross-bill by some of the persons
named as defendants, and at the May term of the court, after
several orders of administration, the cause was continued. After
this continuance, and in vacation, other answers were filed to the
cross-bill. Testimony was taken and filed at the November term. On
the 15th of November, 1876, the complainants
Page 111 U. S. 773
in the cross-bill dismissed their bill as to all the defendants
therein named, except Mrs. Edrington, her children, and the several
alleged prior encumbrancers, and thereupon, on the 16th of
November, John W. Jefferson, J. T. Jefferson, and the several
creditors who had answered the original complaint filed their
petition for the removal of the cause to the Circuit Court of the
United States for the Western District of Arkansas. In their
petition, they set forth the citizenship of the parties as in
different states, and "that said suit cannot and could not be tried
at the present term of this court, as the same is not ready for
trial or in a condition to be tried." It is also stated that
"In said suit there is a controversy wholly between petitioners
and the said Nancy A. Edrington, individually and as said
executrix, John Matthews, and the children and heirs of James H.
Edrington, deceased, which can be fully determined as between them
without the presence of the other parties."
The cause was docketed in the District Court for the Eastern
District of Arkansas on the 9th of March, 1877, and on the 13th of
March Mrs. Edrington moved to remand the case on the ground, among
others, that the petition for removal was not filed on or before
the first term at which the cause could have been tried. On the
10th of October, 1877, additional grounds for remanding were
presented, but, on the 11th of October, the motion was denied.
At the October term, 1879, a decree was entered dismissing the
original bill of Mrs. Edrington and finding that all the
encumbrances upon the property prior to the trust deed had been
fully paid and discharged. The decree then found the amount due on
the trust notes, for principal and interest, and ordered a sale of
the trust property, free of all alleged prior encumbrances, to pay
what was due. Under this decree, a sale was made and confirmed by
the court at the March term, 1880.
From the decree of the October term, 1879, Mrs. Edrington took
this appeal and, among other things, assigns for error the refusal
of the court to remand the cause upon her motion.
We are of opinion that the petition for removal was filed
too
Page 111 U. S. 774
late and that the motion to remand should have been granted. As
Mrs. Edrington was kept in the district court and forced to a
hearing there, she has the right, having saved her point on the
record, to have that error corrected here after final decree below.
Removal Cases, 100 U. S. 475;
Railroad Company v. Koontz, 104 U.
S. 16.
By the laws of Arkansas, there were two terms of the state
circuit court during the year 1875, one beginning on the first
Monday in March and the other on the first Monday in September.
There were also two terms in 1876, one in May and the other in
November. All the contesting defendants to the original complaint
filed answers and ended the pleadings, so far as they were
concerned, on the 1st of March, 1875. As these answers contained no
counterclaim or setoff, the issues were complete between the
original parties at that time, and the plaintiff or the defendants
could either of them demand a trial at the next term, which was in
November, 1875. When these answers were filed, John W. Jefferson,
the trustee, represented all the creditors who were beneficiaries
under the trust. His pleading was in law their pleading, and bound
them as well as him. Some of the creditors were admitted as
defendants not because they were necessary parties to the suit, but
that they might be present to protect their own interests, if
necessary. To let them in, no amendment of the complaint was
needed, because the original allegations against their trustee were
in reality allegations against them. They were given twenty days'
time to answer for themselves and to file a cross-bill. They failed
to avail themselves of this rule, and consequently were in default
at the next term. The case therefore stood for trial at the next
term with issues joined between the plaintiff and the
representative of the creditors on the record. As far as the
trustee was concerned, that was the last term at which he could ask
for a removal, whether the pleadings were amended and new issues
raised or not. The case stood for trial on its merits, with
pleadings completed. Some of the creditors who were beneficiaries
had already appeared. Others were admitted at that term. They made
no complaint of the conduct of their representative upon the
Page 111 U. S. 775
record. His pleadings were their pleadings, and the issues which
he had presented for trial were their issues. The trustee did not
see fit to take steps at that time for a removal; neither did they.
When the term ended, the term at which the cause, as a cause, could
be first tried had passed by, and all right of removal under the
Act of March 3, 1875, then in force, was gone.
It is true that the creditors got leave to file pleadings within
ninety days, and that their answers and cross-bills were in before
that time expired, but this operated only as an amendment of the
original pleadings, and created no new right of removal. As was
said in
Babbitt v. Clark, 103
U. S. 612,
"the act of Congress does not provide for the removal of a cause
at the first term at which a trial can be had on the issues as
finally made up by leave of court or otherwise, but at the first
term at which the cause, as a cause, could be tried."
Without considering any of the other questions presented by the
record,
We reverse the decree and remand the cause to the district
court with instructions to send the case back to the state court,
from which it was improperly removed.