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COPT X-U0U2 IN THE DISTRICT COURT OF THE UNITED STATES, IN AND FOR THE DISTRICT OF IDAHO, EASTEMf DIVISION IIUEML EESERirE BANK OF ) SAN FRANCISCO, a c o r p o r a t i o n , No. U15 Plaintiff, MEMORANDUM DECISION ON DEMURRER TO AMENDED COMPLAINT. v. A. D. MILLET?, JR., Defendant. March 31st, I92U. Albert C, Agnew, Geo. H. Lowe and Bulge & M e r r i l l , Attorneys for P l a i n t i f f , M i l l e r & Rickc, Attorneys f o r Defendant. DIETRICH, DISTRICT JU3GE: The p l a i n t i f f , a s a s s i g n e e , sues the defendant, a r e s i d e n t c i t i z e n of Idaho, upon a promissory note given by him t o a bank organised and doing b u s i n e s s i n the S t a t e of Idaho under the laws of t h a t s t a t e . By h i s dercwrer defendant challenges the j u r i s d i c t i o n of t h e c o u r t , r e l y i n g upon the p r o v i s i o n t h a t "no d i s t r i c t court s h a l l have cognizance of any s u i t (except upon f o r e i g n b i l l s of exchange) to recover upon any promissory note- or other chose in a c t i o n i n favor of any a s s i g n e e * * * u n l e s s such s u i t might have been prosecuted i n such court t o recover upon \ -2- __ X- UgU?. said note or other chose i n a c t i o n if no assignment had been made." Sec. 2U, J u d i c i a l Code. Clearly t h e o b j e c t i o n would be well taken if j u r i s d i c t i o n were p r e d i c a t e d upon d i v e r s i t y of c i t i z e n s h i p . But the p l a i n t i f f contends t h a t i t being a f e d e r a l reserve bank, organized under the laws of the United S t a t e s , the s u i t i s to be deemed to be one " a r i s i n g under the c o n s t i t u t i o n or laws of the United S t a t e s " . sustained by the decided cases, And in t h i s p o s i t i o n i t seems to be c l e a r l y See Art, Bank & Trust Co. v. Federal Reserve Bank of Atlanta, 2%6 U. S. 35O; Bacon v . Federal Reserve Bank of San Francisco, 289 Fed, 513> and Federal Reserve Bank of Dallas v. Webster, 287 Fed. 579. The defendant, however, conceding t h i s contention, s t i l l urges that the "assignee clause", above quoted, l i m i t s the j u r i s d i c t i o n of f e d e r a l courts as well in cases a r i s i n g under the .constitution or laws of the United S t a t e s as where d i v e r s i t y of c i t i z e n s h i p i s r e l i e d upon. And i t must be conceded t h a t , considered apart from i t s o r i g i n and h i s t o r y , the language i s r e a d i l y susceptible to such a construction. But i t i s to be noted t h a t as o r i g i n a l l y enacted (Sept. 24, I7S9) the l i m i t a t i o n could have -iad r e f e r e n c e only to s u i t s where j u r i s d i c t i o n r e s t s upon d i v e r s i t y of c i t i z e n s h i p or the alienage of one of the p a r t i e s . The o r i g i n a l en- actment is found in Sec. 62$ of the Revised S t a t u t e s of the United S t a t e s (1878 E d i t i o n ) , which i s as follows: "The Circuit courts shall have o r i g i n a l j u r i s d i c t i o n as follows: F i r s t . Of a l l s u i t s of a c i v i l nature at common law or in equity, where the matter in dispute, exclusive of c o s t s , exceeds the sum or value of f i v e hundred d o l l a r s , and an a l i e n i s a p a r t y , or the s u i t i s between a c i t i z e n of the s t a t e where i t is brought and a c i t i z e n of another s t a t e : Provided, That no c i r c u i t court s h a l l have cognizance of any s u i t to recover the contents of any promissory note or other chose in a c t i o n in favor of an a s s i g n e e , unless a s u i t might -3- x-4o42 have been prosecuted in such court to recover the s a i d contents if no assignment had been made, except in cases of f o r e i g n b i l l s of exchange," Clearly by the proviso Congress o r i g i n a l l y intended the l i m i t a t i o n t o apply only to cases r e f e r r e d to in t h i s s u b d i v i s i o n . By t h e amendment of .August 13, 1888 (25 S t a t . U33), t h e r e were gathered t o g e t h e r in the same paragraph provisions covering j u r i s d i c t i o n not only of cases where one p a r t y is an a l i e n or where t h e r e i s d i v e r s i t y of c i t i z e n s h i p , but a l s o cases a r i s i n g under the c o n s t i t u t i o n or laws of the United S t a t e s , or t r e a t i e s , and a l s o cases in which the United Stages was p l a i n t i f f , and following the paragraph t h e r e i s a p r o v i s i o n subs t a n t i a l l y the same as the proviso above quoted. With some d i f f e r e n c e in arrangement and s l i g h t d i f f e r e n c e s in language, the whole paragraph, including the l i m i t a t i o n , i s c a r r i e d f o r ward i n t o t h e f i r s t subdivision of s e c t i o n 24 of the J u d i c i a l Code (Act of March 3 , 1 9 H ) , upon which defendant r e l i e s . Without e l a b o r a t e d i s c u s s i o n , i t may be b r i e f l y s t a t e d t h a t t h e r e is no i n d i c a t i o n anywhere t h a t Congress ever intended t o enlarge t h e scope of the proviso clause as o r i g i n a l l y enacted, or to make i t a p p l i c a b l e to s u i t s other than those t h e r e r e f e r r e d to- I t i s not thought t h a t an i n - t e n t i o n m a t e r i a l l y to change, or enlarge t h e a p p l i c a t i o n of the o r i g i n a l clause should be i n f e r r e d from s l i g h t changes in phraseology and the more l o g i c a l and compact arrangement of e x i s t i n g p r o v i s i o n s of the law. Sections 294 and 295, J u d i c i a l Code; Anderson v. P a c i f i c e t c . Co., 225 U. S. 187; Hermann v. Edwards, 238 U. S. 107. The proviso has been the s u b j e c t of c o n s i d e r a t i o n i n a multitude of d e c i s i o n s , many of them s i n c e t h e r e v i s i o n of 1888, but in no case called to my a t t e n t i o n has i t been h e l d to apply -U- X-U0U2' where j u r i s d i c t i o n i s predicated, upon the ground t h a t the s u i t a r i s e s under the c o n s t i t u t i o n or laws of the United S t a t e s . The p r e c i s e question i s discussed a t l e n g t h i n Federal Reserve Bank of Dallas v. ^ e b s t e r , 287 Fed. 579) &nd Sowell v. Federal Reserve Bank, 29U Fed. 7Q&, the reasoning of which i s highly p e r s u a s i v e . The demurrer w i l l he overruled.
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