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Bankers Securities Corp. v. Insurance Equities Corp.

CIRCUIT COURT OF APPEALS, THIRD CIRCUIT


October 6, 1936

BANKERS SECURITIES CORPORATION
v.
INSURANCE EQUITIES CORPORATION ET AL.

Author: Davis

On Reargument.

Before DAVIS, Circuit Judge, and WELSH, District Judge.

DAVIS, Circuit Judge.

This case is here on reargument on briefs. When it was here before, we decided that the extension of the time to plead by stipulation of the parties extended the time within which petition for the removal of the cause from the state court to the federal court could be filed, but we did not decide, as we should have done, whether or not the learned District Judge could reconsider an order remanding the cause on the ground that the petition to remove, though made within the extended time to plead, was not made within time.

If the order remanding the casue to the state court was based upon the ground that it had been "improperly removed" because the federal court had no jurisdiction, it is not reviewable by appeal, writ of error, or mandamus. Section 28 of the Judicial Code (28 U.S.C.A. § 71); In re Pennsylvania Co., 137 U.S. 451, 11 S. Ct. 141, 34 L. Ed. 738; In re Matthew Addy S.S. Corp., 256 U.S. 417, 41 S. Ct. 508, 65 L. Ed. 1027; Liggett Co. v. Baldridge, Attorney General, 278 U.S. 105, 49 S. Ct. 57, 73 L. Ed. 204. In such case the order would be a final determination of the issue. But, if the order remanding the cause was based upon procedural grounds, not affecting the jurisdiction of the court, it may be reviewed by mandamus. Travelers' Protective Association v. Smith (C. C.A.) 71 F.2d 511, 512. Section 28 of the Judicial Code is jurisdictional, authorizing the removal of certain kinds of causes to be removed into the federal court, and section 29 (28 U.S.C.A. § 72) is procedural, providing how and when such causes may be removed. From an order remanding a cause arising under section 28 there is no review, but from an order remanding a cause on procedural grounds under section 29 there may be a review. This is perfectly plain from the reasoning, logic, and direct statements made in the cases of Ayers v. Watson, 113 U.S. 594, 598, 5 S. Ct. 641, 28 L. Ed. 1093; Powers v. Chesapeake & Ohio Ry. Co., 169 U.S. 92, 93, 18 S. Ct. 264, 42 L. Ed. 673; Travelers' Protective Association v. smith, supra.

The Travelers Case, last cited, was a suit begun in the state court of North Carolina to recover $5,000. After the cause had been removed to the federal court, on the ground of diversity of citizenship, and after defendant had answered, the plaintiffs filed a remittitur for any excess which they might recover over $3,000, and the state court without deciding that the grounds on which the cause had been removed was "improper." The defendant appealed from the order remanding the cause, and asked leave to file petition for a writ of mandamus requiring the District Judge to hear and decide the appeal. The court held that, if the order remanding the cause was based upon jurisdictional grounds, it could not be reviewed on appeal or otherwise, but, if it was based upon procedural grounds, it could be reviewed. Judge Parker, speaking for the Circuit Court of Appeals for the Fourth Circuit, said: "As the action involved more than $3,000 and was wholly between citizens of different states, it was properly removed into the federal court and the jurisdiction of that court attached. And it is perfectly clear that the jurisdiction was not defeated or the removal rendered improper by the remittitur subsequently filed."

This language is applicable to the case at bar. The petition for removal was based upon the ground that the case was between citizens of different states and more than $3,000 was involved. When it was removed into the federal court, the jurisdiction of that court attached. Nothing whatever was thereafter done to defeat that jurisdiction. The learned District Judge ordered the cause remanded on a mistaken idea of procedure that in no way affected the grounds upon which the cause had been removed or the jurisdiction of the federal court.

After stating that an order remanding a case, on the ground that the judge had decided that it was improperly removed because of jurisdictional reasons arising under section 28 of the Judicial Code, was not reviewable in an appellate court, Judge Parker said: "But where, as here, it clearly appears that the order was made, not because the court decided that the cause had been improperly removed, but because of a remittitur entered after it had admittedly acquired jurisdiction, we do not think that either the words or the spirit of the statute prevents our directing that it proceed to exercise that jurisdiction by hearing and deciding the case.The statute makes the decision of the District Court that a case has been improperly removed conclusive and final. It does not preclude action requiring the court to exercise jurisdiction when it has made no such decision."

The learned District Judge in the case at bar, having jurisdiction to hear and determine the issue involved, fell into error when he did not do so and practically abandoned that jurisdiction over the cause and turned it over to the state court for adjudication.

It is not necessary at this time to issue the writ of mandamus requiring the District Court to hear and determine the cause, as the learned judge will doubtless of his own motion vacate the order remanding the cause and proceed to hear and determine it.

19361006

© 1998 VersusLaw Inc.



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