Rosenthal v. Coates/Opinion of the Court

The motion to remand was properly sustained. No removal could be had under the act of 1875, because the application was not made before or at the term at which said cause could be first tried. The case had been once tried in the circuit court, and thereafter reversed on appeal by the supreme court of the state.

Neither could it be removed on the ground of local prejudice, which is one of the grounds set forth in the petition for removal, because such removal can be had only where all the parties to the suit on one side are citizens of a different state from those on the other. Jefferson v. Driver, 117 U.S. 272, 6 Sup. Ct. Rep. 729. Here, several of the defendants were citizens of Missouri, the same state that Coates was a citizen of. Neither did the payment by Coates to the other defendants change the status of the suit. The petition did not disclose a separable controversy between Coates, the assignee, and Rosenthal, or any other holder of a draft, but a single controversy between him and all the defendants. Looking back of the form to the substance, it will be seen to have been one between all the creditors of the Mastin Bank as a body, represented by Coates, the assignee, as plaintiffs, and the defendants as another body; and the question was whether this fund should be applied solely to the payment of the claims of the latter, or distributed generally among all of the former. Whether the fund was sufficient to pay all of the draft holders in full or not was, therefore, immaterial. It was not enough to pay all the creditors, and they collectively, and as represented by the assignee, Coates, were the real party in interest on the other side. The suit was, in effect, one by the assignee to disincumber this fund in his possession of alleged liens, and the fact that each defendant had a separate defense to this claim did not create a separable controversy as to him. Safe Deposit Co. v. Huntington, 117 U.S. 280, 6 Sup. Ct. Rep. 733; Graves v. Corbin, 132 U.S. 571, 586, 10 Sup. Ct. Rep. 196; Young v. Parker's Adm'r, 132 U.S. 267, 10 Sup. Ct. Rep. 75. Nor did any defendant create a separable controversy, by simply petitioning in his answer for payment out of that fund.

The appellant relies on the case of Yulee v. Vose, 99 U.S. 539. But in that case there was a separable controversy, and one in fact separated by the decision of the court of appeals of the state of New York. The case of Brooks v. Clark, 119 U.S. 502, 7 Sup. Ct. Rep. 301, is more in point. See, also, Shainwald v. Lewis, 108 U.S. 158, 2 Sup. Ct. Rep. 385; Torrence v. Shedd, 144 U.S. 527, 12 Sup. Ct. Rep. 726. The other defendants, although they have received the amounts due on their drafts, are not necessarily eliminated from this suit. Payments were made by Coates pending an appeal, under a mistaken notion of the law. He may be entitled to a decree declaring that they have no recourse upon this special fund, and then, perhaps, pursue some remedy to recover what he has erroneously paid. It is unnecessary to speculate what may be done. It is enough that they are still parties to the record, against whom some relief may be had, and that there is no separable controversy between the assignee and any defendant.

Further, to sustain this removal would certainly violate the spirit of the removal acts, which do not contemplate that a party may experiment on his case in the state court, and, upon an adverse decision, then transfer it to the federal court. Here, Rosenthal has gone through the state trial and appellate courts, and his rights have been finally declared by the supreme court of the state; and though, as yet, no formal decree has been entered in the trial court, it is none the less true that he has experimented with the state courts and been beaten, and now seeks a different forum. Jifkins v. Sweetzer, 102 U.S. 177.

The order to remand is affirmed.