1. It would seem that the restriction in the 11th section of the
Judiciary Act, giving original jurisdiction of the circuit courts
and which provides that they shall not
"have cognizance of any suit to recover the
contents of
any promissory note or other
chose in action in favor of
an assignee unless a suit might have been prosecuted in such court
to recover the said
contents if no assignment had been
made,"
applies only to rights of action founded on contracts which
contain within themselves some promise or duty to be performed, and
not to mere naked rights of action founded on some wrongful act or
some neglect of duty to which the law attaches damages.
2. However this may be, the restriction of the 11th section not
being found in the language of the 12th and the reasons for its
being in the 11th section not existing for its being in the 12th,
it is not to be considered as applying to cases transferred from
state courts to the circuit court under this latter section.
The 11th section of the Judiciary Act, a section which defines
the original jurisdiction of the circuit courts, [
Footnote 1] enacts:
"That the circuit courts shall have
original
cognizance, concurrent with the courts of the several states, of
all suits of a civil nature at common law or in equity when the
matter in dispute exceeds, exclusive of costs, the sum or value of
$500 and the United States are plaintiffs or petitioners . . . or
the suit is between a citizen of the state where the suit is
brought and a citizen of another state."
But the section gives this original cognizance subject to two
limitations, of which one runs thus:
"Nor shall any District or circuit court have cognizance of any
suit to recover the contents of any promissory note
or other
chose in action in favor of an assignee unless a suit might
have been prosecuted in such court to recover
the said contents
if no assignment had been made, except in cases of foreign
bills of exchange. "
Page 76 U. S. 388
Having thus conferred and limited the original jurisdiction, the
act in the 12th section provides:
"That if a suit be commenced in any state court against an alien
or by a citizen of the state in which the suit is brought against a
citizen of another state . . . and the defendant shall, at the time
of entering his appearance in such state court, file a petition for
the removal of the cause for trial into the next circuit court, . .
. it shall then be the duty of the state court to accept the surety
and proceed no further in the cause, . . . and
the cause shall
then proceed in the same manner as if it had been brought by
original process. [
Footnote
2]"
With these enactments in force, Kennedy & Co., merchants of
New Orleans, brought suit against Bushnell to recover from him the
balance of ten thousand dollars which had been entrusted or lent by
them to Mills & Frisby, doing business at Baton Rouge, for the
purchase of cotton to be shipped to the firm in New Orleans.
Bushnell borrowed the whole sum of Mills & Frisby under a
promise to return it within six days; repaid, in fact, twenty-five
hundred dollars, but failed to refund the balance. Thereupon, Mills
& Frisby assigned all their claim to the debt of Bushnell to
Kennedy & Co., who filed their petition against him in the
Third District Court of New Orleans, and prayed a writ of
attachment, which was issued accordingly.
Certain parties, resident in New Orleans, were made garnishees
and required to answer interrogatories touching the moneys,
credits, or property of Bushnell in their hands, or under their
control. These interrogatories were answered by the peremptory
denial of the garnishees that they had in their hands or under
their control anything belonging to Bushnell. Afterwards, a
citation was issued against Bushnell, and served personally upon
him, requiring an answer to the petition. Thereupon he appeared and
filed a petition, averring that all the members of the firm of
Kennedy & Co. were citizens of Louisiana, and that he was a
citizen of Connecticut, and prayed that the suit against be removed
into
Page 76 U. S. 389
the Circuit Court of the United States for the District of
Louisiana. This petition was allowed, and the cause removed
according to its prayer. But by an order of the circuit court, the
suit was remanded to the state district court, and it was this
order which was brought here for revision by the writ of error.
That Kennedy & Co., as assignees of Mills & Frisby, were
entitled, under the laws of Louisiana, to sue in the state court
upon the debt assigned to them, in their own names, was apparently
conceded upon the argument at the bar. But it seemed to have been
the opinion of the circuit court that they could not maintain a
suit in that character in a court of the United States without
averring in their petition that their assignors, Mills &
Frisby, were citizens of another state than the defendant,
entitled, if no assignment had been made, to maintain suit upon the
debt against the defendant; the ground of this opinion, doubtless,
having been the disability to sue in the national courts, imposed
by the already quoted 11th section of the Judiciary Act upon the
assignees of a
chose in action, in cases of which those
courts would not have jurisdiction if the suit were brought by the
assignors.
Page 76 U. S. 390
THE CHIEF JUSTICE delivered the opinion of the Court.
That the indebtedness of Bushnell to Mills & Frisby was a
chose in action cannot be doubted, for under that
comprehensive description are included all debts and all claims for
damages for breach of contract or for torts connected with
contract. Nor can it be denied that every suitor who brings an
action in a court of the United States must aver in his pleadings a
state of facts which, under the national Constitution and laws,
gives to the court jurisdiction of his suit. [
Footnote 3]
In the case before us, the suit was brought in the state court,
where no question of jurisdiction founded upon citizenship could
arise. In that court, therefore, there was no necessity for any
averment in respect to citizenship. But under the 12th section of
the Judiciary Act, any defendant being a citizen of another state
than the plaintiff or petitioner is entitled, upon application at
the proper time, to have his cause removed to a circuit court of
the United States, and in the case under consideration, the
defendant filed his petition, averring the requisite facts as to
his own citizenship and the citizenship of the petitioners, and
thereupon obtained an order for removal.
Page 76 U. S. 391
The order was doubtless rightly made. The jurisdiction of the
cause was regularly transferred to the circuit court, and the cause
stood in that court as if brought there by original process. The
jurisdiction thus acquired by the circuit court was in no sense
appellate. Removal, under our peculiar system of state and national
jurisdictions, is simply a mode in which the right to resort under
certain circumstances to the latter, rather than the former, is
secured to defendants as well as plaintiffs.
Two questions, then, arise in this cause:
(1st) Whether the 11th section of the Judiciary Act applies to a
suit instituted by the assignees of such a
chose in action
as is shown in the pleadings, and
(2d) Whether valid objection can be taken to jurisdiction of
such a suit when removed to the circuit court by the defendant
under the 12th section.
Upon the first question, it may be observed that the denial of
jurisdiction of suits by assignees has never been taken in an
absolutely literal sense. It has been held that suits upon notes
payable to a particular individual or to bearer may be maintained
by the holder, without any allegation of citizenship of the
original payee, though it is not to be doubted that the holder's
title to the note could only be derived through transfer or
assignment. [
Footnote 4] So too
it has been decided, where the assignment was by will, that the
restriction is not applicable to the representative of the
decedent. [
Footnote 5] And it
has also been determined that the assignee of a chose in action may
maintain a suit in the circuit court to recover possession of the
specific thing, or damages for its wrongful caption or detention,
though the court would have no jurisdiction of the suit if brought
by the assignors. [
Footnote 6]
And it has recently [
Footnote
7] been very strongly argued that the restriction applies only
to contracts "which may be properly said to have
Page 76 U. S. 392
contents,"
"not mere naked rights of action founded on some wrongful act,
some neglect of duty to which the law attaches damages, but rights
of action founded on contracts which contain within themselves some
promise or duty to be performed."
And this view of the restriction seems to be warranted by the
consideration of the mischief which it was intended to prevent. Not
a little apprehension was excited at the time of the adoption of
the Constitution in respect to the extent of the jurisdiction
vested in the national courts, and that apprehension was respected
in the Judiciary Act, which soon afterwards received the sanction
of Congress. It was obvious that numerous suits, by assignees,
under assignments made for the express purpose of giving
jurisdiction, would be brought in those courts if the right of
assignees to sue was left unrestricted. It was to prevent that evil
and to keep the jurisdiction of the national courts within just
limits that the restriction was put into the act.
This view has the sanction of Chief Justice Marshall, who, in
the case of
Bank of the United States v. Planters' Bank of
Georgia, [
Footnote 8] used
this language:
"It was apprehended that bonds and notes given in the usual
course of business by citizens of the same state to each other
might be assigned to the citizens of another state, and thus render
the maker liable to a suit in a federal court."
And when it is remembered what class of actions it is which,
upon the principles of the common law, can be maintained by an
assignee in his own name, it may well be admitted that it would not
have been an unreasonable construction of the restriction if it had
been applied only to notes, bonds, and other written contracts
containing promises to pay money upon which an assignee could sue
without using the name of the assignor. Of such contracts certainly
it may with more propriety be said that they have "contents" than
of claims for damages arising either from torts or from breaches of
contracts.
Page 76 U. S. 393
It is true that at an earlier day, a different construction was
given to it. In
Sere v. Pitot, [
Footnote 9] it was held that an assignee by act of the
law as the general assignee of the effects of an insolvent could
not sue in the circuit court unless the insolvent himself might
sue. It is not easy to reconcile this opinion with the later
judgments, but it is not necessary now to determine definitely the
true construction of the restriction, as we think that the
jurisdiction of the circuit court over the cause before us can be
well supported on the 12th section. That section, as we have
already stated, provides for the removal of suits by defendants.
The restriction in the 11th section is not found in the 12th. Nor
does the reason for the restriction exist. In the 11th section, its
office was to prevent frauds upon the jurisdiction and vexation of
defendants by assignments made for the purpose of having suits
brought in the name of assignees, but in reality for the benefit of
assignors. In the 12th it would have no office, for the removal of
suits could not operate as a fraud on jurisdiction, and was a
privilege of defendants, not a hardship upon them.
It is true, indeed, as was said in argument, that the section
provides that after removal "the cause shall then proceed in the
same manner as if it had been brought by original process," but we
cannot recognize the validity of the inference that the defendant,
before pleading in the circuit court, may move to dismiss the suit
for want of jurisdiction. This construction would enable the
nonresident defendant in a state court to remove the suit against
him into a circuit court and then, by a simple motion to dismiss,
defeat the jurisdiction of both courts. Such a construction, unless
imperatively required by the plain language of the act, is wholly
inadmissible. And it is clear that the language of the act does not
require it. Its plain meaning is that the suit shall proceed, not
that it shall proceed unless the defendant moves to dismiss. The
defendant is not in court against his consent, but by his own act,
and the suit is to proceed as if brought
Page 76 U. S. 394
by original process, and the defendant had waived all exception
to jurisdiction, and pleaded to the merits. Under the 11th section
the exception to jurisdiction is the privilege of the defendant,
and may be waived, for the suit is still between citizens of
different states, and the jurisdiction still appears in the record.
The first act of the defendant, indeed, under the 12th section, is
something more than consent, something more than a waiver of
objection to jurisdiction, it is a prayer for the privilege of
resorting to federal jurisdiction, and he cannot be permitted
afterwards to question it. [
Footnote 10]
We cannot doubt, therefore, that the circuit court had
jurisdiction of the case under consideration. We are all of opinion
that the court erred in remanding the cause to the jurisdiction of
the state court, and the order to that effect must be
Reversed.
[
Footnote 1]
1 Stat. at Large 78.
[
Footnote 2]
1 Stat. at Large 79.
[
Footnote 3]
Turner v. Bank of North
America, 4 Dall. 8.
[
Footnote 4]
Bullard v. Bell, 1 Mason 259 (1817);
Bank
of Kentucky v. Wister, 2 Pet. 321 (1829).
[
Footnote 5]
Chappedelaine v.
Dechenaux, 4 Cranch 308 (1808).
[
Footnote 6]
Deshler v.
Dodge, 16 How. 631 (1853).
[
Footnote 7]
Barney v. Globe Bank, 2 American Law Register N.S. 229
(1862).
[
Footnote 8]
22 U. S. 9 Wheat.
904 (1824).
[
Footnote 9]
10 U. S. 6 Cranch
332.
[
Footnote 10]
Sayles v. Northwestern Insurance Co., 2 Curtis 212.
