Lima, their understanding of the transactions complained of, and, further, they offered, as they had sold none of the Maryland Electric stock they had received in exchange for the Short Line stock, to return to Mr. Barreda the equivalent of his 703 shares of the Short Line of the par value of $100 a share, viz., 4,218 shares of the Maryland Electric Company of the par value of $50 a share, provided Barreda would repay the purchase money paid by them to him, with interest. This offer Mr. Barreda declined for reasons partly personal and because, if, as he stated, he had received the shares when issued he would long since have sold them to good advantage, but he made a counter offer to receive in full settlement 1,500 shares of the Maryland Electric stock. This suggestion was not entertained by the Browns, and this suit was entered.

I am of opinion that the proof establishes the good faith and the open and fair disclosure by the respondents of all facts within their knowledge when they made their offer to purchase the complainant's stock at the price he himself had fixed, and that the complainant is not entitled to a decree in his favor.

The bill of complaint will be dismissed at the cost of the complainant.

REGIS et al. v. UNITED DRUG CO. et al.

(Circuit Court, D. Massachusetts. May 28, 1910.)

No. 695.

1. REMOVAL OF CAUSES (§ 48*)-GROUNDS-SEPARABLE CONTROVERSY." Though a separable controversy exists so as to authorize the removal of a cause, notwithstanding the joinder of a defendant whose citizenship is the same as that of the plaintiff, with a noncitizen defendant, when the case is one capable of separation into parts, so that in one of the parts a controversy will be presented with citizens of one or more states on one side and citizens of another state on the other, which can be fully determined without the presence of any of the other parties to the suit as begun, or where two or more causes of action are united in one suit, and there can be a removal of the whole suit on the petition of one or more of the defendants interested in the controversy which, if it had been sued on alone, would be removable, the controversy does not necessarily become separable merely because the plaintiff could have prosecuted its cause of action against the defendant seeking to remove without the joinder of any other defendant.

[Ed. Note. For other cases, see Removal of Causes, Cent. Dig. § 94; Dec. Dig. § 48.*

For other definitions, see Words and Phrases, vol. 7, p. 6412.

Separable Controversy, see notes to Robbins v. Ellenbogen, 18 C. C. A. 86; Mecke v. Valleytown Mineral Co., 35 C. C. A. 155.]

2. REMOVAL OF CAUSES (§ 54*)—Federal JURISDICTION-DIVERSE CITIZENSHIP -SEPARABLE CONTROVERSY.

Complainants, residents of Massachusetts, filed a bill to restrain infringement of a trade-mark against a New Jersey corporation and defendant L., an individual resident of Massachusetts, whom the bill charged was defendant's president and general manager. The bill also alleged that L. had personally directed and procured to be carried on the wrongful acts of the corporation complained of, and prayed for an injunction *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1967 to date, & Rep'r Indexes

against both defendants, for a conveyance by defendant corporation of all rights secured by any registration by defendants' alleged infringing trade-mark, and for an accounting of profits. Held, that the bill did not show that a separable controversy existed between complainants and defendant corporation, so as to authorize a removal of the cause as to it to the federal court.

[Ed. Note. For other cases, see Removal of Causes, Cent. Dig. § 106; Dec. Dig. 54.*]

Action by Ellen M. Regis and others against the United Drug Company and others. On motion to remand the case to the state court. Granted.

Browne & Woodworth, for complainants.

Melvin M. Johnson and Johnson & North, for defendants.

LOWELL, Circuit Judge. This is a bill in equity filed in the Supreme Judicial Court of Massachusetts and brought by residents of Massachusetts against a corporation citizen of New Jersey and against Liggett, an individual resident of Massachusetts. The bill alleges the complainant's ownership of a registered trade-mark, "Rex"; that Lig gett "is the president of said corporation and the general manager of its business and * * * has personally directed and procured to be carried on the wrongful acts of the respondent corporation hereinafter complained of"; that the defendant corporation has advertised and sold its goods marked "Rexall"; that the Supreme Judicial Court, in a suit against the selling agents of the defendant corporation for the use of the Rexall mark, decreed that these agents be enjoined from continuing this infringement of the Rex trade-mark; that the defendants in the case at bar "had direction and control of the defense of the suit or suits of these complainants against" the agents, "and were the masters of said litigation and paid all the expenses thereof, and therefore these complainants aver that the present respondents and each of them are bound by said rulings and findings of this court": that the defendant corporation made a profit from the infringement. The bill prayed for an injunction against both defendants, for a conveyance by the defendant corporation of all rights "secured by any registration of the said trade-mark," and for an accounting of profits with the defendant corporation.

The defendant corporation in its petition for a removal of the case to this court made the usual allegations, and set out more particularly the citizenship in Massachusetts of the present complainants and of Liggett :

"That the controversy herein is wholly between citizens of different states. That a complete determination of said controversy can be had as between your petitioner and the plaintiffs aforesaid, without the presence of the said defendant Louis K. Liggett. That this is a suit brought by the said plaintiffs to enjoin an alleged infringement of an alleged trade-mark, and for an accounting and damages against your petitioner,

and as a matter

of fact the defendant Louis K. Liggett is merely an officer and employé of your petitioner, and would be bound by and subject to any and all decrees which may be entered in this suit against your petitioner. That the said Louis K. Liggett is neither an indispensable nor a necessary party to the complete determination of said controversy. That the action of the plaintiffs in making For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexas

the said Louis K. Liggett a citizen of Massachusetts and an officer and employé of your petitioner, as aforesaid, a nominal party defendant, would not operate to prevent this removal, even if said action had been taken in good faith; but your petitioner avers that said Louis K. Liggett was not so joined in good faith, but that such joinder of him was for the express and fraudulent purpose of defeating the jurisdiction of the courts of the United States. That your petitioner is the defendant actually interested in this controversy."

The state court allowed the petition for removal. After the case was entered in this court the complainant filed a "plea in abatement," which set out that:

"(1) The controversy herein is not wholly between citizens of different states, inasmuch as the complainants at the time of the commencement of this suit were, have ever since been, and still are, citizens of the commonwealth of Massachusetts; the defendant Louis K. Liggett at the time of the commencement of this suit was, has ever since been, and still is, a citizen of the commonwealth of Massachusetts; and the defendant the United Drug Company is a citizen of the state of New Jersey.

"(2) The defendant Louis K. Liggett has personally directed and procured to be carried on the infringement complained of as set forth in paragraph 6 of the bill of complaint; and said infringement constitutes a joint and several tort, and therefore a single cause of action.

"(3) The said defendant Louis K. Liggett was joined in good faith, and the joinder of him was not for the express and fraudulent purpose of defeating the jurisdiction of the courts of the United States, as alleged in the petition for removal."

The case was thereupon set down for hearing, and the plea in abatement, although it raised an issue of fact concerning the alleged fraudulent joinder of Liggett, was yet treated for the purposes of the argument as a motion to remand for want of jurisdiction apparent on the face of the proceedings.

Inasmuch as the defendant Liggett, like the plaintiffs, is a citizen of Massachusetts, this case is not removable from the state court to this court unless there is here "a controversy which is wholly between citizens of different states and which can be fully determined as between them." Act March 3, 1875, c. 137, § 2, 18 Stat. 470, as amended (U. S. Comp. St. 1901, p. 509). In other words, the court has here to determine if there exists a controversy between the Massachusetts plaintiffs and the New Jersey corporation which is "separable" from that which exists and is here sued upon between the same plaintiffs and the Massachusetts defendant Liggett.

To define a "separable controversy" as intended by the statute cited has not been found easy, though the Supreme Court has had to pass upon the question in some 50 cases in fewer years. It is true that in Fraser v. Jennison, 106 U. S. 191, 194, 1 Sup. Ct. 171, 174 (27 L. Ed. 131), it was said by the Supreme Court that, to authorize removal, "the case must be one capable of separation into parts, so that, in one of the parts, a controversy will be presented with citizens of one or more states on one side, and citizens of other states on the other, which can be fully determined without the presence of any of the other parties to the suit as it has been begun." This case was approved and cited in Geer v. Mathieson Alkali Works, 190 U. S. 428, 432, 23 Sup. Ct. 807, 809 (47 L. Ed. 1122), where the Supreme Court added:

"And when two or more causes of action are united in one suit there can be a removal of the whole suit on the petition of one or more of the (de

fendants) interested in the controversy which, if it had been sued on alone, would be removable."

But the language quoted, and other language which resembles it, is not to be taken as declaring that a controversy is separable merely because the given plaintiff could have prosecuted his cause of action against the defendant seeking to remove without the joinder of any other defendant. Thus in Alabama Great Southern Railway Co. v. Thompson, 200 U. S. 206, 26 Sup. Ct. 161, 50 L. Ed. 441, which is but one of many similar cases, an action at law was brought against two tort-feasors who were sued jointly. One of them was a citizen of the same state as the plaintiff; the other sought to remove, but the Supreme Court held that the controversy between the latter defendant and the plaintiff was inseparable from that between the plaintiff and the resident defendant. Yet it is undisputed that the plaintiff could have sued either defendant without joining the other, and that the cause of action thus sued upon separately is the same as that sued upon jointly. King v. Hoare, 13 Mees. & W. 494, 505. Like the Thompson Case, the present proceeding is based upon a tort alleged to have been committed jointly by the defendant corporation and by Liggett, and must have a like decision unless it can be distinguished as hereinafter suggested.

An attempt to distinguish has been made upon the ground that the present case is a suit in equity, while the Thompson Case and most other cases referred to therein were actions at law. Thus in Smith v. Rines, 2 Sumn. 338, Fed. Cas. No. 13,100, a case approved by the Supreme Court, Mr. Justice Story observed:

"And it is most material to remark that this case (Cameron v. McRoberts, 3 Wheat. 591 [4 L. Ed. 467]), and all the others, in which a separate and distinct interest, or a nominal interest, is spoken of, were bills in equity, capable in their own nature of separate and distinct interests, where there' was, or might be, no community of interest, and where the general question was presented as to the proper parties necessary to be made in a suit in equity. Very different considerations do, or at least may, apply to suits at common law, where the nonjoinder or misjoinder of parties has a very different effect upon the character of the suit, and very different rules apply to it."

But the Supreme Court has applied the rule of the Thompson Case to suits in equity as well as to actions at law. Thus in Plymouth Gold Mining Co. v. Amador & Sacramento Canal Co., 118 U. S. 264, 6 Sup. Ct. 1034, 30 L. Ed. 232, the proceeding sought to enjoin a corporation and certain of its officers from polluting the defendant's waters. It must, therefore, have been a suit in equity, at least in the federal court to which it was removed, whatever it may have been according to the Code of California. The Supreme Court refused to hold that the corporation's controversy with the complainant was separable from the controversy of its officers, and the case was remanded accordingly to the state court. In deciding the case the Supreme Court said:

"It is claimed, however, that, as the answers show that the Plymouth Company is the real defendant, and the petition alleges that the others are noninal parties only, and joined with that company as 'sham defendants' to prevent a removal, the suit must be treated as in legal effect against the New York corporation alone, and, therefore, removable. So far as the complaint

goes, all the defendants are necessary and proper parties. A judgment is asked against them all, both for an injunction and for money. Hayward and Hudson are admitted by the answer to be officers of the corporation, and Montgomery its superintendent. These persons are all citizens of California, and amenable to process in that state. It is not denied that they are all actively engaged in the operations of the company; and Montgomery, as the superintendent of its mines and mills, must necessarily be himself personally connected with the alleged wrongful acts for which the suit was brought. It is undoubtedly true that, if the company has a good defense to the action, that defense will inure to the benefit of all the other defendants; but it by no means follows that, if the company is liable, the other defendants may no be equally so, and jointly with the company. It is possible, also, that the company may be guilty and the other defendants not guilty; but the plaintiff in its complaint says they are all guilty, and that presents the cause of action to be tried. Each party defends for himself, but until his defense is made out the case stands against him, and the rights of all must be governed accordingly." 118 U. S. 270, 6 Sup. Ct. 1037 (30 L. Ed. 232).

To the same effect is Little v. Giles, 118 U. S. 596, 7 Sup. Ct. 32, 30 L. Ed. 269, a bill in equity which sought to charge the defendants. as joint trespassers and to obtain a conveyance from them. A nonresident defendant sought to remove, but the court held his controversy inseparable and likened the suit in equity in Little v. Giles to an action at law against joint tort-feasors. In Starin v. New York, 115 U. S. 248, 6 Sup. Ct. 28, 29 L. Ed. 388, the complainant brought suit in equity to restrain the defendants from tortiously maintaining a ferry, and the nonresident defendant was denied removal. Yet the complainant could have proceeded against any defendant separately.

The defendant corporation here relies greatly upon Geer v. Mathieson Alkali Works, 190 U. S. 428, 23 Sup. Ct. 807, 47 L. Ed. 1122. That was a bill in equity brought by certain stockholders of the Mathieson Company against that company, some of its officers, and the Castner Company, to set aside a conveyance by the Mathieson Company to the Castner Company made by the alleged fraud of all the defendants. The bill also sought an accounting and a decree requiring the individual defendants to make good and pay to the grantor company and to the plaintiffs the loss and damage caused by their wrongful conduct. Some of the corporate officers were resident defendants. The corporations sought to remove. The complainants resisted removal on the ground that their controversy with neither corporation was separable from their controversy with the individual defendants. The Supreme Court held the case to be removable, apparently on the ground that no remedy was sought against them personally for their share in the alleged joint tort, but only a remedy against them in their official capacity. The Supreme Court quoted from Hatch v. Chicago, R. I. & P. R. R., 6 Blatchf. 105, Fed. Cas. No. 6, 201, as follows:

"The directors and the treasurer are, therefore, not real parties to the suits, but merely nominal parties. No personal demand is made against any one of them, nor is any personal accounting asked for any one of them, and it is only in his relation to the company, and in the official position that he occupies toward the company, that any one of them is made a party. The test of this is that, if any one of the directors or the treasurer were to resign his office, he would necessarily cease, ipso factor, to be a proper party to the suit, and the plaintiff would be obliged to make his successor in office a party, and so on with every change. The reason for this would be that, there being no relief prayed against the individual in his individual capacity, and the in