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$ 571. Fictitious Citizenship.
Federal jurisdiction may not be created by the fictitious assignment of the cause of action, but where the transfer is real, and for a consideration, federal jurisdiction will attach even though the transfer is shown to have been made with this end in view. In Dickerman v. Northern Trust Co.4 the court say: “It is well settled that a mere colorable conveyance of property, for the purpose of vesting title in a non-resident and enabling him to bring suit in a federal court, will not confer jurisdiction; but if the conveyance appears to be a real transaction, the court will not, in deciding the question of jurisdiction, inquire into the motives which actuated the parties in making the conveyance. The law is equally well settled that, if a person take up a bona fide residence in another State, he may sue in a federal court, notwithstanding his purpose was to resort to a forum of which he could not have availed himself if he were a resident of the State in which the court was held.” 42
In order that there may be federal jurisdiction, mere residence in another State is not sufficient. There must be diversity of citizenship, and this fact must affirmatively appear in the pleadings.43
§ 572. Federal Jurisdiction of Cases Arising under the Constitu
tion, Treaties and Acts of Congress. The Constitution provides that the federal judicial power shall extend to “all cases, in law or equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made under their authority.”
In order that federal judicial power may attach under this grant it is necessary that the controversy shall constitute what in law is technically known as a “case;" and that, for its decision, the enforcement of some federal right is substantially involved.44
41 176 U. S. 181; 20 Sup. Ct. Rep. 311; 44 L. ed. 423.
43 Wood v. Wagnon, 2 Cr. 9; 2 L. ed. 191; Wolfe v. Hartford Life Insurance Co., 148 U. S. 389; 13 Sup. Ct. Rep. 602; 37 L. ed. 493.
A case is not brought within federal judicial cognizance simply because, in the progress of the litigation, it becomes necessary to refer to or give a construction to the federal Constitution or laws of the United States. “ The decision of the case must depend upon that construction. The suit must, in part at least, arise out of a controversy between the parties in regard to the operation and effect of the Constitution or laws upon the facts involved." 45
In Cableman v. Peoria, etc., R. R. C0.46 it is held that the bare fact that the appointment of a receiver is by a federal court does not make all actions against him cases arising under the Constitution or laws of the United States which he can remove on that ground into the federal court, unless his appointment has been not under the general equity powers of a chancery court, but pursuant to a special federal law. The court, citing previous cases, say: "When a suit does not really and substantially involve a dispute or controversy as to the effect or construction of the Constitution or laws of the United States, upon the determination of which the result depends, it is not a suit arising under the Constitution or laws. And it must appear on the record, by a statement in legal and logical form, such as is required in good pleading, that the suit is one which does really and substantially involve a dispute or controversy as to a right which depends on the construction of the Constitution or some law or treaty of the United States, before jurisdiction can be maintained.”
44 In Osborn v. Bank of United States (9 Wh. 738; 6 L. ed. 204) Chief Justice Marshall says: “ This clause enables the judicial department to receive jurisdiction to the full extent of the Constitution, laws, and treaties of the United States, when any question respecting them shall assume such a form that the judicial power is capable of acting on it.
The power is capable of acting only when the subject is submitted to it by a party who asserts his rights in the form prescribed by law. It then becomes a case, and the Constitution declares that the judicial power shall extend to all cases arising under the Constitution, laws, and treaties of the United States."
45 Gold Washing & Water Co. v. Keves, 6 Otto, 199; 24 L. ed. 656.
46 179 V. S. 335: 21 Sup. Ct. 171; 45 L. ed. 220. The ordinary rule is that no receiver may be sued except by leave of the ('ourt which appointed him, but Congress has provided that every receiver or manager of any property appointed by any Court of the United States may be sued in respect of any act or transaction of his in carrying on the business connected with such property without the previous leave of the Court in which such receiver or manager was appointed.
But the federal judicial power attaches when it is shown that a federal right is substantially involved, whether express or implied: “The jurisdiction of the courts of the United States is properly commensurate with every right and duty created, declared, or necessarily implied, by and under the Constitution and laws of the United States. Those courts are created courts of common law and equity; and under whichsoever of these classes of jurisprudence such rights and duties may fall, or be appropriately ranged, they are to be taken cognizance of and adjudicated according to the settled and known principles of that division to which they belong.” 47
In Shoshone Mining Co. v. Rutter48 the general extent of the federal judiciary power as determined by subject-matter rather than diversity of citizenship, is stated and the authorities reviewed.
$ 573. Removal of Suits from State to Federal Courts.
The protection of federal law and federal rights against possible invasion by state law and state authorities may be secured in three ways. First, by vesting in the federal courts exclusive cognizance of all cases in which the enforcement of federal rights created or recognized by the Constitution, treaties, or congressional statutes, is involved; Second, by providing that all cases, involving these rights, which originate and are prosecuted in the state courts may be finally appealed to the federal courts; and, Third, by providing that such cases begun in the state courts may at some stage prior to final judgment therein, be removed into the federal courts. All these methods have been employed since the beginning of the present government.
47 Irvine v. Marshall, 20 How. 558; 15 L. ed. 994. 18 177 U. S. 505; 20 Sup. Ct. Rep. 726; 14 L. ed. 864.
In the early years under the Constitution chief reliance for the ultimate protection of federal rights against state invasion was laid upon the right of appeal to the Supreme Court of the United States by writ of error to the state courts having final jurisdiction of a case in which federal rights, privileges, and immunities were involved, and in which the final decision was adverse to the federal rights, privileges, and immunities claimed. With respect to very many matters of which jurisdiction might have been granted to the inferior federal courts, no such jurisdiction was given by Congress to the federal courts, these suits being left to the adjudication of the state courts, with the provision that certain cases might be removed into the federal courts, and that in all cases not so removed or removable, appeal might be had to the federal Supreme Court when the final state judgment was adverse to the alleged federal right, privilege, or immunity. 49
Prior to 1887 by successive Acts of Congress the jurisdiction of the inferior federal courts had been amplified and the right of removal had been broadened, but in that year was passed an Act the purpose of which was to limit the right to bring a suit in the Circuit Court and the right to remove into that Court a suit brought in a state court. In construing this Statute the Supreme Court has uniformly kept in mind that its object is to limit the jurisdiction of the federal courts. As we have seen in previous chapters, the right of the federal courts to issue writs of habeas corpus directed to state authorities has been widened both statute and judicial precedent.
$ 574. Concurrent State Judicial Powers.
The state courts are not excluded from the exercise of jurisdiction with reference to all of the classes of cases placed by the Constitution within the possible cognizance of the federal courts. Over a very large proportion of these cases Congress has not seen fit to confer jurisdiction on any federal court. As to certain of these cases the federal jurisdiction is held to be necessarilly exclusive, and it may by Congress be made so
49 It would seem that Congress has the power to provide that this right of appeal from a state court may be had to an inferior federal court, but quite properly, in order to save as far as possible the States' sensibilities, an appeal only to the highest federal court has been allowed. And further. more, as we have seen, this appeal lies only in those cases where the decision of the state court has been adverse to the federal right, privilege, or immunity.
as to all, but as to others the state courts may be permitted to adjudicate concurrently. That is to say, as to these cases, the two systems of courts may at the same time have equal authority, the suitors being given the option as to which tribunals shall be resorted to. 50
This concurrence of jurisdiction is founded upon the fact as declared in Claflin v. Houseman" that while every citizen of a State is a subject of two distinct sovereignties, these sovereignties are not foreign to each other but have concurrent authority as to place and persons though distinct as to subject-matters, and that therefore, as the court say: “Legal or equitable rights, acquired under either system of laws, may be enforced in any court of either sovereignty competent to hear and determine such kind of rights and not restrained by its Constitution in the exercise of such jurisdiction. Thus a legal or equitable right acquired under state laws, may be prosecuted in the state courts, and also, if the parties reside in different States, in the federal courts. So rights, whether legal or equitable, acquired under the laws of the United States, may be prosecuted in the United States courts, or in the state courts, competent to decide rights of the like character and class; subject, however, to this qualification, that where a right arises under the law of the United States, Congress may, if it see fit, give to the federal courts exclusive jurisdiction.”
In the case of The Moses Taylor, 52 decided in 1866, the Supreme Court with reference to the relation between the two systems of courts, declared as follows:
50 Subject, of course, to the right of removal from the state to the federal courts, and appeal to the Supreme Court of the United States by writ of error.
51 93 U. S. 130; 23 L. ed. 833. 52 4 Wall. 411; 18 L. ed. 397.