The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1915-10-14
|NTERSTATE-C CALLAHAN CASE MUST Be
HEARD UNITED STATES DISTRICT COURT
JUDGE DIETRICH TO RESTRAIN FURTHER PRO-
cEEDNes IN STATE coURT-ExTRAcTs FROM
INTERESTING DECISION

II
the petition of the Interstate Gala
han Consolidated Mining company
restraining the Callahan Mining COM
many and others from further prose-
cutting suit against the petitioner in
the state court The appeal to the
federal court grew out of the action
filed in the district court by the Call
lahan Mining company and Others
asking for the appointment of a re-
ceiver to take charge of the property
of the Interstate Callahan property
until such time as the controversy
over the election of a board of direct
ors is settled by competent tribunal.
The. application for a receiver was
granted by Judge Woods, who named
Eugene R. Day for the position, who
was required to file a bond of $780,,
600. Before the receiver took charge
Of the property the Interstate Callahan
company raised the question of juris-
diction. claiming that the case should
properly come before the federal and
not the state court and asked time to
appeal to the United States district
court. This was granted by Judge
Woods. who required he applicants to
file bond for 100000 as a guarantee
against damages through failure of
the receiver he had appointed TO take
charge Of the property.
Extracts From Decision.
After reviewing the controversy for
the control of the company by the
two boards of directors, Judge Del
trieh says:
'"rhe mining company was organiz-
ed under, and exists by virtue of, the
laws of the state of Arizona. The
election in question was, as already
stated, held in Minnesota. None OF
the directors certified by the inspect
ors resides in Idaho, and no one OF
them has been served with process or
has appeared in the suit. The other
group, assuming to act upon behaf OF
the mining company procured coun-
sci to enter it's appearance and to CO.
operate with the plaintiffs IN secur-
ing the appointment of receiver;
and forthwith a receiver was appoint
ed without notice to the remaining IN
dividual defendants. Thereupon the
directors whose election had been GER
tilted. and who are in fact in control
of the corporate business, caused the
mining company to petition for the
removal of the suit to tnis court up
on the ground that the cor1plainl
presents separable controversy be-
tween it and the plaintiffs upon
that assumption there doubtless exist
the requisite diversity Of citizenship
and jurisdictional amount in dispute
Only one of the plaintiffs, however, Is
a resident of this district, and, as we
have already seen, the mining com
pany Is a non resident, and therefore,
under the rule of Smith VI Lyon, l33
U. S. 315, Ex-parte Wisner, 2OS U. 5
449, and In re Moore, 2O9 US. 49O, II
Is conceded that the cause is not re-
movable to this court over the op1ec-
ton Of the nonresident plaintiff, un-
less it falls within one of the provi-
sions of Section 81 of the judicial
Code; that is, unless it is suit TO
enforce :. claim to
real or personal property within" this
district. And counsel apparently
agree that this is the principal If not
the only real, question for discussion
True it is suggested in the brief for
the respondents that the mining COM
pany, having appeared, as we have al
ready explained, and Joined in the pc
tition for a receiver, thus submitted
itself to the jurisdiction of the state
court, and therefore its petition for
removal came too late. The point was
not seriously pressed at the argument
and 1t may be summarjly disposed OF
For present purposes the allegations
Of the petition for removal must, un-
der familiar principles, be deemed to
be true, and upon the showing there
in made the appearance was unau-
thorized. Until otherwise determined
by competent tribunal the directors
whose election was certified in due
FORM and who are in the actual con-
troll Of the company's affairs, must be
recognized as its directors. Their
election may be voidable, but 1t was
not void, and the question can not be
adjudicated upon a petition for re-
moval Hence for the time being the
presumption of the regularity of the
certificate Of election must be deemed
to be conclusive. Beard v. Beard, 13S
Pac 797."
Taking up the original complaint
filed in the state court, Judge DIETRICH
discusses 1t in this language
If we now pass to an analysis of
the complaint in the state court, what
do we find? The mining company
holds the legal title to, and has pos
session, and presumptively is entitled
70 continue in the possession and con-
troll of valuable mine in this dis
trict, which, 1t may be added, consti-
tutes substantially all Of the corpor-