Thompson v. Railroad Companies/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 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.

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. '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 o 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.'

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.

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 suir brought by the railroad companies against Thompson, 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 and the cause remanded, with directions to dismiss the bill without prejudice, and to proceed in conformity with this opinion.

Mr. Justice SWAYNE did not sit in this case, being a tockholder in one of the corporations.