Court Opinion

ID: 3660458
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:12:12.813084+00
Date Added: 2024-06-11T14:08:31.424066
License: Public Domain

It is not pertinent or proper to consider and determine here the sufficiency of the plaintiff's cause of action. The sole question presented for our decision is, is the action one which must, for the causes alleged in the petition, be removed, as to the petitioner, to the Circuit Court of the United States?
The act of Congress, approved 3 March, 1887 (24 U.S. Stats. at Large, p. 552), provides, among other things, in section 2 thereof, as follows: "And when, in any suit mentioned in this section, there shall be a controversy which is wholly between citizens of different states, and which can be fully determined as between them, then either one or more of the defendants actually interested in such controversy may remove said suit into the Circuit Court of the United States for the proper district." It is conceded that the cause of action alleged in the complaint (78)  constitutes a "controversy," of which such Circuit Court might have jurisdiction, in cases contemplated and intended by the statute.
But it is contended by the appellees that such controversy is not"wholly" between citizens of different states, and, therefore, the action cannot be removed. This contention, in our opinion, is well founded. It appears that the plaintiffs are citizens of this State; that the defendants, the Northwestern North Carolina Railroad Company and North Carolina Railroad Company are likewise corporations of this State, and that the other defendants, including the petitioner, are citizens of the state of Virginia. Plainly, if the parties, plaintiffs and defendants, are all material and necessary as made, or if one of the defendants, a citizen of this State, is a material and necessary party defendant, and the citizenship of the several parties is as just stated, then the action cannot be removed, because the controversy is not wholly between citizens of different states. Hence, it is not denied by the appellant that if the defendant, the Northwestern North Carolina Railroad Company, is a *Page 87 
material and necessary party defendant, and the controversy cannot "be fully determined between" the plaintiffs and the defendants petitioner without it as a party, then the action cannot be removed. It is contended, however, by the petitioner that the Northwestern North Carolina Railroad Company is not a necessary party defendant; that in contemplation of law it is, and must be, treated as a party plaintiff. We cannot think so. If the allegations of the complaint are well founded, the defendant petitioner purports to own a majority of the shares of the capital stock of that company, elects its officers, directs and controls its actions in all respects, and it, under the direction and by the procurement of the petitioner, has done, and does, the unlawful, unwarranted acts and injuries of which the plaintiffs complain; it denies their right — that their allegations are true — and refuses to redress their                           (79) alleged grievances. The action is brought directly against it by a minority of the stockholders of that company, to compel it and the defendant petitioner, which holds a majority of the shares of its capital stock and dominates it, to account for its property, injuries done to the same, the use and rents of it, its money, its rights and credits, to compel the petitioner to surrender its coupon bonds secured by the deed of trust mentioned, to surrender the shares of the capital stock of the company held by the petitioner, which it alleges it took and holds as security merely, and to account for property, moneys, etc., diverted unlawfully and wrongfully to the use and purposes of the petitioner. It seems to us very clear that the plaintiffs' cause of action is against the Northwestern North Carolina Railroad Company as well as the petitioner, and that it is a necessary and proper defendant in this action. Their controversy is directly with that company, and with the petitioner who controls it and claims to own a majority of the shares of its capital stock. A chief ground of the action is that the officers of the company and the petitioner holding a majority of the shares of its capital stock, wrongfully, injuriously and oppressively, deprives the plaintiffs of their rights and endamages them in the ways and by the fraudulent means alleged. The Northwestern North Carolina Railroad Company is, therefore, a material party defendant and a citizen of this State. Hence, the action cannot be removed on the ground that the controversy is wholly between citizens of different states. O'Kelly v. R. R., 89 N.C. 58; Gudger v. R. R.,87 N.C. 325; Hyde v. Reeble, 104 U.S. 407.
What has been already said serves to show that the controversy between the parties cannot "be fully determined as between them," if the action shall be divided and one part of it shall remain in the State court and the other part sent to the Circuit Court of the United States. The *Page 88 
(80)  cause of action is not divisible. The State court could not grant the relief demanded by the plaintiffs in scarcely any respect, in the absence of the petitioner defendant; nor could the Circuit Court of the United States grant the relief demanded against the petitioner in the absence of the other principal defendants. Their liability, if it exists, is, to a large extent, common, and the remedy, to a like extent, must be against them jointly. This is too obvious to require further explanation. What we have said rests upon the supposition that the plaintiffs have alleged sufficiently a well founded cause of action. Whether they have or not, as we have said, is a question not now before us to be decided. Ayerv. Wiswall, 112 U.S. 187; Railroad Co. v. Wilson, 114 U.S. 60; RailroadCo. v. Ide, ibid., 52; Thorne Wire Hedge Co. v. Fuller, 122 U.S. 535;Lordly v. Worthington, 121 U.S. 179.
It is not the purpose of the act of Congress cited to allow or require that a civil action wherein the controversy is not wholly between citizens of different states, but is between citizens of the same state, and others, citizens of a different state or states, to be removed to the Circuit Court of the United States, as to a nonresident defendant, unless such controversy can "be fully determined as between them" — all the parties to the action, as constituted therein. If it were otherwise, an action could never be completely determined, and there would be, practically, a denial of right and justice. It is only where there is more than one defendant in the action, and one or more of them are citizens of another or other states, and the cause of action as to a nonresident defendant may be divided and fully determined, as to him, as if he had remained in the action in the State court, that he has the right to have the action, as to him, removed into the Circuit Court of the United States. Otherwise, complete justice could not be done. The purpose of the law, in allowing such removals of actions, is not to allow or help (81)  parties to evade justice, but to enable them to avoid, in a measure, possible local prejudice, to promote fair convenience of parties, and to give nonresidents the advantage, if there be any, of litigating in a court, in a larger sense, common to all the states of the union.
Affirmed.
Cited: Bowley v. R. R., 110 N.C. 317; Baird v. R. R., 113 N.C. 610;Faison v. Hardy, 114 N.C. 434. *Page 89