May 19, 1902
CERTIFICATE FROM THE UNITED STATED CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT
Fuller, Harlan, Brewer, Brown, Shiras, Jr., White, Peckham, McKenna; Gray took no part in the decision.
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MR. CHIEF JUSTICE FULLER delivered the opinion of the court.
This is a certificate under section six of the Judiciary Act of March 3, 1891, 26 Stat. 826, c. 517, and it is settled as to such certification that each question propounded must be a definite point or proposition of law clearly stated, so that it can be definitely answered without regard to other issues of law in the case; that each question must be a question of law only and not of fact, or of mixed law and fact; and that the certificate cannot embrace the whole case, even where its decision turns on matter of law only and even though it be split up in the form of questions. Graver v. Faurot, 162 U.S. 435; McKeen v. Railroad Company, 149 U.S. 249.
Rule 37 provides: "Where, under section six of the said act, a Circuit Court of Appeals shall certify to this court a question or proposition of law, concerning which it desires the instruction of this court for its proper decision, the certificate shall contain a proper statement of the facts on which such question or proposition of law arises." In this case there is no such statement, but the entire record is certified, and the questions contemplate an examination of the whole case and in large part its decision on the merits.
We cannot regard this certificate as in compliance with the rule, and are constrained to decline to answer the second and
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third questions, but we think we may properly answer the first question in view of the narrow limits by which it was apparently intended to be circumscribed.
The judicial power extends to controversies between citizens of different States; and between citizens of a State and citizens or subjects of foreign States; but the Judiciary Act of September 24, 1789, provided that the District and Circuit Courts of the United States should not "have cognizance of any suit to recover the contents of any promissory note or other chose in action in favor of an assignee, unless the suit might have been prosecuted in such court to recover the said contents if no assignment had been made, except in cases of foreign bills of exchange," 1 Stat. 78, c. 20, § 11; and the same provision of the act of March 3, 1887, as corrected by that of August 13, 1888, is in these words: "Nor shall any Circuit or District Court have cognizance of any suit, except upon foreign bills of exchange, to recover the contents of any promissory note or other chose in action in favor of any assignee, or of any subsequent holder if such instrument be payable to bearer and be not made by any corporation, unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made." 25 Stat. 433-4, c. 866, § 1.
To prevent abuse of the constitutional right to resort to the Federal courts, jurisdiction in respect of assignees or transferees was thereby denied except as to suits upon foreign bills of exchange; suits upon choses in action payable to bearer and made by a corporation; and suits that might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made. New Orleans v. Quinlan, 173 U.S. 191.
The bill shows that at the time this suit was brought the Circuit Court had jurisdiction as between plaintiff and defendant, and also that the payees of these warrants might themselves then have instituted it, if there had been no assignment or transfer. We lay out of view as inapplicable the limitation on amount prescribed as to parties plaintiff by another clause with a different purpose.
But it is objected that the restriction relates to the time when
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the paper was assigned, and not to the time of the commencement of the suit; and that if there were intermediate assignees jurisdiction in respect of them must appear, and does not appear on the face of this bill.
We are of opinion that the inquiry is to be determined as of the date when the suit is commenced. Jurisdiction vests then and cannot be divested by subsequent change of residence; but jurisdiction cannot be held to have vested prior to action brought. There have been many decisions to this effect, the same question being presented under all the acts from 1789.
In Chamberlain v. Eckert, 2 Biss. 126, Judge Drummond held that the time of the commencement of the suit determined the question; and, among other things, said: "But if the rule contended for by the defendant is the true rule, then no change in the status of the payee, after the assignment, could ever enable a party to bring a suit, and it might happen, where the note was executed by the maker to the payee of another State, and at the time of the commencement of the suit in the Federal court, he was of the same State with the maker, the suit could be maintained by the assignee, a citizen of another State, because you have to look according to the view of the defence, to the status of the parties at the time that the assignor held the note. And if he ever could have prosecuted the suit, the assignee could prosecute it, although at the time when the suit is brought the payee and maker are citizens of the same State. That would be the necessary consequence, and the question recurs, what does the language of the statute mean, 'unless the suit might have been prosecuted in said court, if no assignment had been made?' I think it means at the time the suit was prosecuted, so that if it appears then that the assignor could have maintained the suit if no assignment had been made, the assignee being a citizen of another State, can maintain the suit." And see Thaxter v. Hatch, 6 McLean, 68.
In White v. Leahy, 3 Dillon, 378, the same conclusion was announced by Judge Dillon. The suit was a bill to foreclose brought in the Circuit Court for the District of Kansas by plaintiff, a citizen of Missouri, as the assignee of a note and mortgage. The marker and payee of the note were citizens of Kansas,
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and were such at the time the note and mortgage were made and the payee endorsed the note and assigned the mortgage, and delivered the same to plaintiff in Missouri. But at the time the suit was brought the payee was a citizen of Texas. Judge Dillon said: "If no assignment of this note had been made, the assignor might, being at the time when suit was brought a citizen of Texas, have then commenced it; and under statute his assignee has the same right. If the restriction on the assignee does not exist at the time suit is commenced, the court has jurisdiction if the case involves the requisite amount and is between a citizen of the State where the suit is brought and a citizen of another State."
The same ruling was made by the Circuit Court of Appeals for the Fifth Circuit in Jones v. Shapera, 57 Fed. Rep. 457, and the foregoing and other cases were cited. See also Portage Water Company v. Portage, 102 Fed. Rep. 769.
In Milledollar v. Bell, 2 Wall. Jr. 334, which was a bill to foreclose, complainant, the mortgagee, was a citizen of New York, and defendant was a citizen of New Jersey, but there had been intermediate assignments. Mr. Justice Grier said: "The complainant's case is therefore within the strict letter of the law -- nor can we discover anything in the spirit, equity or policy of the act, or in adjudged cases, which would compel us to give it is a construction such as the defendant asks. The statute does not take from the assignee of a chose in action his right to sue in the courts of the United States, unless his immediate assignor could have sustained such action; but only in case the court could have had no jurisdiction as between the original parties to the instrument, if no assignment had been made. The situation or rights of temporary intermediate assignees, holders, or endorsers enters not into the conditions of the case."
Wilson v. Fisher, Bald. 133, was approved. There a citizen of New York had obtained a judgment against a citizen of Pennsylvania in the Supreme Court of that State. The judgment was assigned to citizens of Pennsylvania, and subsequently to complainant, who was an alien, and jurisdiction was sustained; Hopkinson, J., saying: "The suit cannot be maintained
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here unless it might have been prosecuted here, if no assignment had been made; that is, as we understand it, if it had remained with the original parties to the transaction, contract or cause of action. The law does not declare that no assignee shall prosecute his suit in this court unless his assignor might have done so; but, unless a recovery of the right claimed might have been had in this court if no assignment of it had been made; and of course in every case in which a recovery might have been prosecuted in the courts of the United States if no assignment had been made, it may be so prosecuted after such assignment to a party competent to sue here."
In Kirkman v. Hamilton, 6 Pet. 20, where the payees of a note and the makers thereof were citizens of Tennessee, and before the note became due the payees became citizens of Alabama and endorsed it to a citizen of Alabama, the jurisdiction of the Circuit Court for the Western District of Tennessee of a suit brought by the holder of the note was upheld because the payees could have prosecuted a suit to recover the contents of the note in that court if no assignment had been made. But it is to be observed that the payees were not only citizens of Alabama when the suit was commenced, but when the note was assigned.
In Mollan et al v. Torrance, 9 Wheat. 537, the declaration contained two counts. The first was against the defendant, Torrance, as endorser of a promissory note made by Spencer and Dunn, payable to Sylvester Dunn, and endorsed by him to Torrance, by whom it was endorsed to Lowrie, and by him to plaintiffs. The other count was for money had and received by Torrance to plaintiffs' use. The declaration stated plaintiffs to be citizens of New York, and defendant to be a citizen of Mississippi, but was silent "respecting the citizenship or residence of Lowrie, the immediate endorsee of Torrance, through whom the plaintiffs trace their title to the money for which the suit is instituted."
The ruling in Young v. Bryan, 6 Wheat. 146, "that an endorsee who resides in a different State, may sue his immediate endorser, residing in the State in which the suit is brought, although that endorser be a resident of the same State with the
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maker of the note," was affirmed, but it was pointed out that: "In this case the suit is brought against a remote endorser, and the plaintiffs, in their declaration, trace their title through an intermediate endorser, without showing that this intermediate endorser could have sustained his action against the defendant in the courts of the United States. The case of Turner v. Bank of North America, 4 Dallas, 8, has decided that this count does not give the court jurisdiction. But the count for money had and received to the use of the plaintiffs being free from objection, it becomes necessary to look farther into the case." The record showed that defendant Torrance had filed a plea to the jurisdiction, in which he stated that the promises laid in the declaration were made to Lowrie, and not to plaintiffs, and that Lowrie and defendant were both citizens of the State of Mississippi. Plaintiffs demurred to this plea, the demurrer was sustained, and judgment rendered for defendant. The court overruled the plea because it averred that Lowrie and defendant were citizens of Mississippi at the time of the plea pleaded, not that they were citizens of the said State at the time the action was brought; and Chief Justice Marshall said: "It is quite clear that the jurisdiction of the court depends upon the state of things at the time of the action brought, and that after vesting it cannot be ousted by subsequent events. Since, then, one of the counts shows jurisdiction, and the plea does not contain sufficient matter to deny that jurisdiction, we think that the judgment ought not to have been rendered on the demurrer in favor of the defendant." The judgment was reversed and the cause remanded.
That was a suit on the distinct contract between endorsee and endorser, but as plaintiff was not the immediate endorsee, and made title through Lowrie, who was, the court held that the first count should have shown the competency of the latter to invoke the jurisdiction at the time the suit was brought.
The general rule is that when a note or bill is endorsed in blank the bona fide holder of it may write an endorsement to himself or to another over the endorser's name, and where there are several endorsements in blank he may fill up the first one to himself or may deduce his title through all of them.
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Evans v. Gee, 11 Pet. 80; 1 Daniel Neg. Inst. (4th ed.) §§ 693, 694, 694 a.
However, this bill does not trace title through any intermediate assignee, and on the contrary does so directly from the original payees. It is true that there are averments that in a proceeding by one Goldstein, still pending and undisposed of in the Circuit Court, against other parties than the city of New Orleans, these claims, "now held" by complainant, were presented and proved, the master's report thereon being referred to but not set out; and also that in a suit by one Benjamin and certain intervenors brought against the city of New Orleans in the Circuit Court, and subsequently dismissed without prejudice, these claims, "since acquired and now held and owned by" complainant, were included; and while this shows that these warrants must have passed through the hands of others than complainant, it does not appear that there was any endorsement of them other than in blank, and on the bill as framed complainant distinctly appears to be assignee of the payees. What complications may emerge hereafter in respect of the prior cases, or either of them, need not be considered.
We answer the first question by saying that on the face of the bill the Circuit Court had jurisdiction on the ground of diverse citizenship.
It will be so certified.
MR. JUSTICE GRAY did not hear the argument and took no part in the decision.
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