In a proceeding commenced in a state court to foreclose a
mortgage, which prays judgment that the mortgage debtors be
adjudged to pay the amount found due on the debt, and in default
thereof that the property be sold, a mortgage debtor who has parted
with his interest in the property subject to the debt (which the
purchaser agreed to assume and pay), is a necessary party to the
suit, and if he is a citizen of the same state with the mortgagees,
or one of them, the suit cannot be removed to the circuit court of
the United States under the provision of the first clause of § 2,
Act of March 3, 1875, 18 Stat. 470.
The filing of separate answers by several defendants in a suit
for the foreclosure of a mortgage, which raise separate issues in
defending against the one cause of action, does not create separate
controversies within the meaning of the second clause in § 2, Act
of March 3, 1875, 18 Stat. 470.
This is an appeal under § 5 of the Act of March 3, 1875, c. 137,
18 Stat. 470, from an order of the circuit court remanding
Page 112 U. S. 188
a case which had been removed from a state court. The suit was
brought on the 15th of April, 1879, in the Circuit Court of Huron
County, Michigan, by the appellees, citizens of New York, against
Ebenezer Wiswall, also a citizen of New York; Ebenezer R. Ayres, a
citizen of Ohio; Frederick S. Ayres, James S. Ayres, Charles G.
Learned, citizens of Michigan, and many others whose citizenship
does not appear, to foreclose a mortgage executed by Frederick S.
Ayres, Charles G. Learned, and Ebenezer Wiswall, to Catharine E.
Wiswall, a citizen of New York, to secure a debt owing by them
jointly to her. This mortgage and the debt it secured were assigned
to the appellees before the suit was brought. After the mortgage
was made, Ebenezer Wiswall contracted in writing to sell to
Frederick S. Ayres his interest in the mortgaged property, subject
to the mortgage debt, which Ayres assumed to pay as part of the
consideration money. Afterwards, Learned sold and transferred to
Ebenezer R. Ayres all his remaining interest in a part of the
mortgaged property, subject to the mortgage, which Frederick S.
Ayres, James S. Ayres and Ebenezer Ayres bound themselves to pay.
Between the time of the execution of the mortgage and the
commencement of the suit, the mortgagors and their grantees sold
and conveyed a large number of the parcels of the mortgaged
property to various persons whose citizenship does not appear. All
these purchasers were made parties. The bill, after setting forth
the execution of the mortgage, and the various transfers and
conveyances, and giving credit for certain payments on the mortgage
debt, prayed that Frederick S. Ayres, Charles G. Learned, and
Ebenezer Wiswall be decreed to pay the amount found due on the
mortgage debt, and in default that the property, or so much thereof
as was necessary, might be sold and the proceeds applied to that
purpose. It further prayed for execution against Frederick S.
Ayres, Charles G. Learned, Ebenezer Wiswall, and James S. Ayres for
any balance of the debt which might remain due after the property
was exhausted.
Ebenezer Wiswall and Learned filed separate answers to the bill,
in which they admitted the execution of the mortgage and the debt
for the security of which it was given, and asked
Page 112 U. S. 189
that their respective grantees, who had assumed the payment of
the mortgage debt, might be decreed to be first personally liable
for any money decree that should be rendered.
Frederick S. Ayres and James S. Ayres also answered, denying
that the original debt for which the mortgage was executed amounted
to as much as it was stated in the mortgage to be, and averring
that other payments had been made beyond those stated in the bill.
They insisted that there was not more than $20,000 due, and this
they offered to pay.
In this state of the pleadings, Frederick S. Ayres, James S.
Ayres, and Ebenezer R. Ayres, on the 28th of November, 1879, filed
in the state court a petition, accompanied by the necessary bond,
for the removal of the cause to the Circuit Court of the United
States for the Eastern District of Michigan. The parts of the
petition material to the present inquiry are as follows:
"That said complainants are, and were at the time said suit was
commenced, citizens of New York; that your petitioners Frederick S.
Ayres and James S. Ayres are, and were when said suit was
commenced, citizens of Michigan, and your petitioner Ebenezer R.
Ayres is, and was when said suit was commenced, a citizen of Ohio;
that in said suit, which is for the foreclosure of a mortgage on a
large tract of land in the Eastern District of Michigan, there is a
controversy which is wholly between said complainants and these
petitioners, and which can be fully determined, as to them, without
the presence of the other defendants."
Under this petition the case was taken to the circuit court of
the United States, where it remained until the 29th of December,
1881, and until after a hearing, and a decree finding the amount
due on the mortgage and ordering a sale of the property. While the
case was in the United States court, Ebenezer R. Ayres filed an
answer, presenting substantially the same issues as those of
Frederick S. and James S., in the state court. On the 29th of
December, 1881, and during the same term in which the final decree
was rendered, the following order was made:
"It appearing to the court that the record in this cause was
Page 112 U. S. 190
improperly removed to the court from the Circuit Court of the
County of Huron, in chancery, and that this court hath not
jurisdiction of the cause, it is ordered that the proceedings had
thereon in this court be, and the same are hereby, set aside and
held for naught, and that the said cause be remanded to the said
Circuit Court for Huron County in chancery, and that this cause be
dismissed from this court for want of jurisdiction."
From this order the present appeal was taken on the 12th of
November, 1883.
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court. He
stated the facts in the foregoing language, and continued:
The 5th section of the Act of March 3, 1875, makes it the duty
of the circuit court of the United States to remand a cause which
has been removed from a state court when it shall appear to the
satisfaction of the court at any time after the suit has been
removed that such suit does not really and substantially involve a
dispute or controversy properly within the jurisdiction of the
court. For this purpose the circuit court retained its power over
the suit and the parties until the end of the term at which the
final decree was rendered. The parties were not, in law, discharged
from their attendance in the cause until the close of the term, and
the decree, though entered, was "in the breast of the court" until
the final adjournment. Bac.Abr. Tit. "Amendment and Jeofail," A;
Ex Parte
Lange, 18 Wall. 163;
Goddard v. Ordway,
101 U. S. 745,
101 U. S. 752.
The order to remand can be made at any time during the pendency of
the cause when it shall appear there is no jurisdiction. The fact
that Ebenezer R. Ayres had filed his answer in the United States
court is a matter of no importance. That fact did not of itself
confer jurisdiction if there had been none before. It will be for
the state court, when the case gets back there, to determine what
shall be done with pleadings filed and testimony
Page 112 U. S. 191
taken during the pendency of the suit in the other
jurisdiction.
The suit was brought for the foreclosure of the mortgage, and a
personal money decree for any balance that might remain due on the
debt after the security of the mortgage was exhausted. The mortgage
and the debt it secured presented the subject matter of the
controversy in the case. Ebenezer Wiswall was one of the mortgagors
and one of the debtors. The relief sought was against him and the
other defendants. It involved a finding of the amount due from him
and the others who were bound for the payment of the debt, and in a
certain event an order for an execution against him personally for
the collection of the money. The debt was a unit. Whatever sum was
due from one was also due from all who were chargeable with its
payment. There could not be a decree against a part of the
defendants for one sum, and against the rest for another. Although
Wiswall did not contest the amount of the claim of the complainants
as set out in their bill, Frederick S. Ayres, one of the joint
debtors, did, and if he succeeds in his defense it will, of
necessity, inure to the benefit of Wiswall. The matter in dispute
between the parties on the opposite side of the suit to enforce the
mortgage was the amount due on the mortgage debt. The complainants,
citizens of New York, are on one side of the suit, and Ebenezer
Wiswall, also a citizen of New York, and others, citizens of
Michigan and Ohio, on the other. If the claim of the complainants
is sustained, the decree will be against all the defendants. In
order that the complainants may get all the relief they ask, and
which, upon their showing in the bill, they are entitled to,
Wiswall is a necessary and substantial party to the suit, and on
the opposite side from them.
The material facts of this case are entirely different from
those in the
Removal Cases, 100 U.
S. 457, where there was one controversy between the
construction company and the railroad company as to the existence
of a mechanics' lien, and the amount due thereon, and another
between the construction company and certain mortgage trustees as
to the priority of their respective liens. In the progress of the
cause, the
Page 112 U. S. 192
mechanics' lien was established against the company, and the
property sold under the lien to pay the mechanics' debt. This ended
that controversy. There then remained to be settled the other
controversy between the construction company and the mortgage
trustees, and we held that, as the railroad company was not
interested in that dispute, it was to be treated as a nominal party
only. It stood indifferent between the two real parties. No decree
was asked against it, and the rights of the parties who were really
contending could be fully settled without its presence.
So, in
Pacific Railroad v. Ketchum, 101 U.
S. 289,
101 U. S. 298,
we held that the trustees of a mortgage, which was being foreclosed
at the suit of bondholders, might properly be arranged on the same
side of the controversy about the foreclosure with the
complainants, although they were nominally defendants, because
there was no antagonism between them and the complainants, and no
relief was asked against them. Here, however, relief is asked
against Wiswall, and it grows directly out of the subject matter of
the action, to-wit, the collection of the mortgage debt which
Wiswall owes jointly with the other debtors.
It follows that, as Wiswall was a citizen of the same state with
the complainants, the suit was not removable under the first clause
of § 2 of the act of 1875. All the parties on one side of the
controversy were not citizens of different states from those on the
other.
Removal cases, supra.
It remains to consider whether it was removable under the second
clause on the ground that there was in the suit "a controversy
which is wholly between citizens of different states, and which can
be fully determined as between them." The petition for removal was
framed to meet this provision of the statute. What we have already
said applies equally well to this branch of the case. The rule is
now well established that this clause in the section refers only to
suits where there exists
"a separate and distinct cause of action, on which a separate
and distinct suit might have been brought and complete relief
afforded as to such cause of action, with all the parties on one
side of that controversy citizens of different states from
those
Page 112 U. S. 193
on the other. To say the least, the case must be one capable of
separation into parts, so that, in one of the parts, a controversy
will be presented with citizens of one or more states on one side
and citizens of other states on the other, which can be fully
determined without the presence of the other parties to the suit as
it has been begun."
Frazer v. Jennison, 106 U. S. 191,
106 U. S. 194.
As has already been seen, this is not such a case. There is here
but one cause of action. The personal decree which is asked against
Wiswall is incident to the main purpose of the suit. It presents no
separate cause of action. The fact that separate answers were filed
which raised separate issues in defending against the one cause of
action, does not create separate controversies within the meaning
of that term as used in the statute. They simply present different
questions to be settled in determining the rights of the parties in
respect to the one cause of action for which the suit was brought.
Hyde v. Ruble, 104 U. S. 407;
Winchester v. Loud, 108 U. S. 130;
Shainwald v. Lewis, 108 U. S. 158.
It follows that the suit was properly remanded, and the order of
the circuit court to that effect is, consequently
Affirmed.
