1. Though usually where a case is not cognizable in a court of
equity the objection must be interposed in the first instance, yet
if a plain defect of jurisdiction appears at the hearing or on
appeal, such court will not make a decree.
2. Though state legislatures may abolish, in state courts, the
distinction between actions at law and actions in equity by
enacting that there shall be but one form of action, which shall be
called "a civil action," yet the distinction between the two sorts
of proceedings cannot be thereby obliterated in the federal
courts.
Hence, if the civil action brought in the state courts is
essentially, as hitherto understood, a suit at common law, the
common law form and not an equitable one must be pursued if the
case is removed into a federal court.
3. Nor does the fact that by statute in the state courts "the
real parties in interest" must bring the suit, whereas in the
federal courts, in a common law suit such as was presented in the
civil action brought in the state courts, one party would sue to
the use of another, change this rule. A plaintiff in the state
court may remain plaintiff on the record in a federal court and
prosecute his suit in that court as he is authorized by state laws
to prosecute it in the state courts.
Page 73 U. S. 135
The case was this:
The Code of Civil Procedure of Ohio provides that every action
must be prosecuted
"in the name of the real party in
interest" &c., and
"That the distinction between actions at law and suits in
equity, and the forms of all such actions and suits heretofore
existing, are
abolished, and in their place there shall be
hereafter
but one form of action, which shall be called a
'civil action.'"
With this provision of the code in force, the Central Ohio and
another railroad company agreed to transport over their road for
one Thompson a quantity of horses and mules, stipulating for
payment in a certain mode, to which Thompson assented. In
conformity with this agreement (the service having been performed),
drafts were drawn on Thompson which he neglected or refused to pay.
These drafts, for convenience of collection, were drawn payable to
the order of a certain D. Robinson cashier, Robinson having,
however, no interest in the proceeds. To enforce the collection,
what is termed as above mentioned, by the code in Ohio, a "civil
action" was instituted in one of the courts of the state, against
Thompson in the name of the railroad companies. The petition (used
in lieu of a declaration) stated the original indebtedness from
Thompson for freight, the giving of the drafts, their protest for
nonacceptance or nonpayment, and after averring that the plaintiffs
were compelled to take them up, asked for judgment against the
defendant for principal and interest. Thompson, being a citizen of
Kentucky, removed the cause to the federal court. When it reached
there, by leave of the court, a bill in equity (setting up the same
cause of action) was substituted for the petition originally filed
in the state court, and the suit went on as a cause in chancery.
The circuit court rendered a decree in favor of the complainants
for the amount of the drafts, with interest. From this decree the
defendants appealed, assigning as the chief ground of error that
the complainants had a plain and adequate remedy at law which they
had in fact
Page 73 U. S. 136
pursued in the state court, and which they ought to have
followed out in the federal court.
MR. JUSTICE DAVIS delivered the opinion of the Court.
Has a court of equity jurisdiction over such a case as is
presented by this record? If it has not, the decree of the
Page 73 U. S. 137
court below must be reversed, the bill dismissed, and the
parties remitted to the court below to litigate their controversies
in court of law. Usually, where a case is not cognizable in a court
of equity, the objection is interposed in the first instance, but
if a plain defect of jurisdiction appears at the hearing, or on
appeal, a court of equity will not make a decree. [
Footnote 1]
The Constitution of the United States and the acts of Congress
recognize and establish the distinction between law and equity. The
remedies in the courts of the United States are, at common law or
in equity, not according to the practice of state courts, but
according to the principles of common law and equity, as
distinguished and defined in that country from which we derive our
knowledge of these principles. [
Footnote 2]
"And although the forms of proceedings and practice in the state
courts shall have been adopted in the circuit courts of the United
States, yet the adoption of the state practice must not be
understood as confounding the principles of law and equity nor as
authorizing legal and equitable claims to be blended together in
one suit. [
Footnote 3]"
This case does not present a single element for equitable
jurisdiction and relief.
The suit brought in the state court was nothing but an ordinary
action at law. When it was removed to the federal court a bill in
equity (alleging the same cause of complaint) was substituted, by
leave of the court, for the petition originally filed in the state
court, and the suit progressed as a cause in chancery. Thus, an
action at law which sought solely to recover damages for a breach
of contract was transmuted into a suit in equity, and the defendant
deprived of the constitutional privilege of trial by jury. The
absence of a plain and adequate remedy at law, is the only test of
equity jurisdiction, and it is manifest that a resort to a court or
chancery was not necessary, in order to enable the railroad
companies to collect their debt.
Page 73 U. S. 138
Whether their proper course was to sue upon the contract, or
upon the drafts, or upon both together, the remedy at law was
complete.
If the remedy at law was adequate in the state court, why the
necessity of going into a court of equity, when the jurisdiction
was transferred to a federal tribunal? The reason given is because
in Ohio the real parties in interest must bring the suit, and as
the nominal legal title in the drafts was in the payee, Robinson
the railroad companies (after the transfer) could not proceed at
law, and continue plaintiffs on the record, and were, therefore,
obliged to change the case from an action at law into a suit in
equity. If this position were sound, it would allow a federal court
of equity to entertain a purely legal action, transferred from the
state court, on the mere ground, if it were not done, the plaintiff
would have to commence a new proceeding. It surely does not need
argument or authority to show, that the jurisdiction of a federal
court is not to be determined by any such consideration.
But there was no necessity for a change from law to equity after
the suit was transferred.
The railroad companies mistook the course of proceeding in
courts of the United States in actions at law, in suits brought up
from state courts. In this case, as the action was a purely legal
one, if they could have maintained it in their names in the state
court, they had an equal right to maintain it in their names when
it arrived in the federal court.
In actions at law the courts of the United States may proceed
according to the forms of practice in the state courts, and in such
actions they administer the rules of evidence as they find them
administered in the state courts. There was therefore no difficulty
whatever in the plaintiffs in the state court remaining plaintiffs
on the record, and prosecuting their suit in the same manner they
were authorized to prosecute it by the laws of the state. If, in
Ohio, the drafts could have been received in evidence in a state
court, in a suit brought by the railroad companies against
Thompson,
Page 73 U. S. 139
then, on the transfer of the suit to the federal court, and
trial had there, they would have been equally receivable in
evidence. The law of Ohio directs that all suits be brought in the
name of the real party in interest. This constitutes a title to
sue, when the suit is brought in the state court, in conformity
with it; and in all cases transferred from the state to the federal
court, under the 12th section of the Judiciary Act, this title will
be recognized and preserved; and when a declaration is required by
the rules of the circuit court, it may be filed in the name of the
party who was the plaintiff in the state court.
Decree reversed.
MR. JUSTICE SWAYNE did not sit in this case, being a stockholder
in one of the corporations.
[
Footnote 1]
Penn v. Lord Baltimore, 1 Vesey 446.
[
Footnote 2]
Robinson v.
Campbell, 3 Wheat. 212.
[
Footnote 3]
Bennett v.
Butterworth, 11 How. 674.
