Caro Realty Co. v. Blumenthal
Caro Realty Co. v. Blumenthal
Opinion of the Court
Ellis Blumenthal and Samuel Kraft, as assignees of a contract for lease of a hotel, became bound to the Caro Realty Company (a corporation), assignor, by covenants contained in the instrument of assignment, to pay any actual damages that might be sustained by the original lessor or his assigns by reason of breach of certain covenants assumed by the assignees in said instrument of assignment. As a guaranty for performance of the covenants so assumed by the assignees, Samuel Blumenthal, father of Ellis, executed a promissory note for $33,000 in favor of the Caro Realty Company, and a deed to realty in Chatham County, Georgia, as security for the note. The note and deed contained recitals showing that they were made to create and secure said
The defendants were duly served bjr publication. At the first term the Caro Realty Company alone appeared specially, by filing a petition and giving bond for removal of the cause to the District Court of the United States for the Southern District of Georgia, Savannah Division, on the grounds that the “suit is a controversy wholly between citizens of different States,” and that “there -is a separable controversy between the plaintiff Blumenthal and your petitioner, the Caro Realty Company.” Objections to removal were filed, upon the grounds: (a) Because the original petition shows that the alleged cause of action is against the defendants jointly, and there is no separable controversy between the plaintiff and the Caro Realty Company; this ground of objection being on the basis that the alleged cause of action is in the nature of a joint equitable action to clear or remove a cloud upon title to land, by cancellation of the papers held in escrow that had become void by reason of an
Properly construing the petition, the- object of the action was to require physical production of the note and deed in court, and their cancellation as a cloud upon plaintiff’s title, in order that they may not be vexatiously or injuriously used against him. The papers wore in physical possession of the defendant MeyerKiser Corporation, held in the nature of a trust for Blumenthal and Caro Eealty Company, to await the result of the transaction to which the guaranty related, and to be enforceable in event of breach of the covenant, but, if such event should not occur, then to be surrendered to the maker. The Meyer-Kiser Corporation being in physical possession of the papers, though owing duties to Caro Eealty Company and Blumenthal, was in position conjunctively with the former to hold the papers vexatiously and injuriously to the latter. If the object of the trust has been accomplished, and the Meyer-Kiser Corporation will not surrender possession to Blumenthal without the consent of Caro Eealty Company, and the latter will not give such consent, such concurrent refusals will amount in substance to co-operative action between them to deprive Blumenthal of his property. In such circumstances Blumenthal’s right is against both, and both are necessary parties to the grant of full relief; and consequently there is no separable controversy between Blumenthal and Caro Eealty Company.
As a general rule, where removal to the Federal court of a cause pending in’ a State court is sought on the ground of diverse citizenship, and there is no separable controversy, all the defendants must join in the petition for removal. 23 E. C. L. 731, § 116. As there was no separable controversy in this case, and the defendant Meyer-Kiser Corporation did not petition for removal, the judge
Judgment affirmed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.