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Statement of the Case.
In deciding adversely to the claim of the plaintiff in error that by reason of the process of garnishment in attachment against the Missouri Pacific company, in the action removed to the Circuit Court from the state court, the Circuit Court acquired exclusive jurisdiction over the moneys due the Construction company from the Pacific company, the Supreme Court of Nebraska did not so pass upon a Federal question as to furnish ground for the interposition of this court.
In appointing a receiver of the Construction company to collect the amount of the decree against the Missouri Pacific company, the Supreme Court of Nebraska denied no Federal right of the Missouri Pacific company. When a party to an action in a state court moves there for its removal to the Circuit Court of the United States, and the motion is denied, and the party nevertheless files the record in the Circuit Court, and the Circuit Court proceeds to final hearing, (the state court meanwhile suspending all action,) and remands the case to the state court, the order refusing the removal worked no prejudice, and the error, in that regard, if any, was immaterial.
An order of the Circuit Court remanding a cause cannot be reviewed in this court by any direct proceeding for that purpose.
If a state court proceeds to judgment in a cause notwithstanding an application for removal, its ruling in retaining the case will be reviewable here after final judgment under Rev. Stat. § 709.
If a case be removed to the Circuit Court and a motion to remand be made and denied, then after final judgment the action of the Circuit Court in refusing to remand may be reviewed here on error or appeal.
If the Circuit Court and the state court go to judgment, respectively, each judgment is open to revision in the appropriate mode.
If the Circuit Court remands a cause and the state court thereupon proceeds to final judgment, the action of the Circuit Court is not reviewable on writ of error to such judgment.
A state court cannot be held to have decided against a Federal right when it is the Circuit Court, and not the state court, which has denied its possession.
THIS was a petition filed December 24, 1888, in the District Court for Lancaster County, Nebraska, by John Fitzgerald, suing on behalf of himself and all other stockholders of the Fitzgerald and Mallory Construction Company against that company and the Missouri Pacific Railway Company, a corporation organized under the laws of Missouri, Kansas, and Nebraska. The petition was based on two contracts, (copies of which were annexed,) one bearing date April 28, 1886, between the Fitzgerald and Mallory Construction Company and the Denver, Memphis and Atlantic Railway Company, a corpora
Statement of the Case.
tion organized under the laws of the State of Kansas. By this contract the Construction company agreed to build a railroad in Kansas from the east to the west line of that State; to furnish all materials and money; to equip the same with at least one thousand dollars of rolling stock per mile; to grade the line according to the engineer's surveys; to furnish oak ties on curves not less than 2600 to the mile, and steel rails not less than twenty-six pounds to the yard; to build such depot and stations as the Denver company should require, and all necessary sidings or turnouts, and, generally, to construct the road equal to railroads then being built in Southern KanThe Denver company agreed to pay $16,000 per mile of its full paid capital stock for every mile of completed road constructed, and $16,000 in its first mortgage bonds per mile of single track of the road, which bonds were each to be for one thousand dollars, or such other denomination as the parties should agree upon; draw interest at six per cent; be dated July 1, 1886; run thirty years from date; and be secured by a trust deed on the line and branches. They were to be delivered as the Construction company required them. The Denver company was also to deliver to the Construction company all municipal and county bonds voted and to be voted in aid of the railroad, and all donations thereto, and procure the right of way in advance of the work, so as not to delay the construction, but the Construction company was to pay for the right of way.
The other contract, dated May 4, 1886, was between the Missouri Pacific Railway Company and the Construction company. It recited the contract of April 28, and also that the Missouri Pacific company desired to obtain control of the railway. The Construction company agreed to sell to the Missouri Pacific company all the securities which it should receive under the first contract, for which the Missouri Pacific company was to deliver to it five per cent bonds at the rate of $12,000 per mile of completed road. The Missouri Pacific company also agreed to transport at cost the men and material of the Construction company while it was carrying on the work. The petition alleged that the Construction company was a
Statement of the Case.
corporation of Iowa, having a capital of a million and a half, divided into shares of one hundred dollars each, of which Fitzgerald held fifteen hundred, S. H. Mallory fifteen hundred, and Gould and other citizens of New York something over ten thousand; that the holders of over eight thousand shares were officers and directors of the Missouri Pacific company; and that the bankers of the latter company held two thousand shares. It was further alleged that shortly after the execution of the two contracts, all the directors of the Denver company, except Fitzgerald and Mallory, resigned, and their places were filled by officers and directors of the Missouri Pacific company; that the directory of the Construction company was changed so that of its five directors three were connected with the Missouri Pacific company, Fitzgerald and Mallory being the other two. The work in the field was carried on by Fitzgerald and Mallory, and the financial dealings of the Denver and the Construction companies were in the hands of the New York directors. Fitzgerald complained of many transactions of the New York directors of the Construction company which were prejudicial to himself and other creditors and stockholders and in the interest of the Missouri Pacific company.
The road was built by the Construction company, and Fitzgerald alleged that, after that was accomplished, he made efforts to secure an accounting between the Missouri Pacific and the Construction companies, which were unsuccessful, and he brought the suit as a stockholder for the purpose of settling the dealings between the two companies.
The petition also averred that the Denver company failed to comply with the provisions of the contract in reference to procuring the right of way to the damage of the Construction company, for which it charged that the Missouri Pacific company was liable.
It was also alleged that the Construction company not only owed Fitzgerald individually a large amount of money, but for money expended in the bringing of this as well as other suits, for attorneys' fees, and other like matters, for which he asked reimbursement.
Statement of the Case.
The prayer of the petition was that an accounting be had between the Missouri Pacific company and the Construction company; that certain action of the board of directors and arrangements between the Missouri Pacific company and the Construction company be declared null and void; that the Missouri Pacific company be compelled to account in relation to certain enumerated matters and generally, and pay over all moneys found due to the Construction company; also that complainant "be reimbursed for all expenses and attorneys' fees in other suits that he has been forced by the action of said directors to commence, as well as in this case;" and for general relief.
The answer of the Missouri Pacific company was filed January 19, 1889, and admitted that defendant was a corporation duly organized under the laws of Missouri, Kansas, and Nebraska; but averred that the liability proceeded on, if any, was a liability of the company incorporated under the laws of the State of Kansas. It charged that while the contract between the Denver and Construction companies required the Denver company to acquire the right of way, the Construction company undertook to procure it, and became responsible to the Missouri Pacific company for a good title; that some fifteen or more miles of the railroad were built over the public lands without complying with the act of Congress of March 3, 1875, granting to railroads the right of way through the public lands, so that for that distance of road the Missouri Pacific company did not acquire such title as it was entitled to, and it claimed that if there should be an accounting between the Construction company and itself, it should not be required to pay or account for any portion of the line where the lawful right of way had not been secured, and that a deduction of twelve thousand dollars per mile of railroad so situated should be made. The answer further alleged that Fitzgerald had theretofore commenced suit in the District Court of Lancaster County, Nebraska, against the Construction company to recover a sum exceeding fifty thousand dollars and caused garnishee proceedings to be instituted against the Missouri Pacific company, upon which it was required to an
Statement of the Case.
swer as to all moneys in its hands or under its control belonging to the Construction company or due from the Missouri Pacific company thereto, but that it had no interest in Fitzgerald's individual claim or knowledge concerning the merits thereof. Various other admissions, denials, and averments were made in the answer upon the merits, which it is unnecessary to set forth. The Construction company filed a demurrer to the petition.
On the same day, January 19, 1889, the Missouri Pacific company filed its petition to remove the cause to the Circuit Court of the United States for the District of Nebraska on two grounds, diverse citizenship and the question raised by the claim of the Missouri Pacific company in respect of part of the road constructed over the public lands. It appeared from the pleadings that Fitzgerald was a citizen of Nebraska, and that the Construction company was a corporation of Iowa; that the Missouri Pacific company was a corporation organized under the laws of Kansas, Missouri, and Nebraska; but in its answer, as already stated, the Missouri Pacific company claimed that it was not the corporation referred to in the petition, and that the liabilities arising under the contract were liabilities of the company organized and existing under the laws of Kansas. The Construction company also filed a petition for removal.
The District Court denied the petitions and refused to accept the bonds. The Missouri Pacific company, however, filed the record in the Circuit Court of the United States and Fitzgerald filed a motion to remand and a plea to the jurisdiction, which motion was denied and the plea overruled, and the cause was referred to a special master to take proofs. May 6, 1891, the cause came on to be heard upon the pleadings, proofs, and the report of the master, and the Circuit Court held that the cause had been improperly removed from the state court, and ordered it remanded at the costs of the Missouri Pacific company. The reasons for this conclusion are given in an opinion reported 45 Fed. Rep. 812. The cause having been returned to the District Court of the State, the parties entered into a stipulation that the action be con