
    W. T. COGDILL and Wife v. W. T. CLAYTON and CHAMPION FIBER COMPANY.
    (Filed 22 December, 1915.)
    Remoyal of Causes — Diversity of Citizenship — Fraudulent Joinder of Parties— Jurisdictional Amount — Denial of Allegations.
    Where the petition to remove a cause from the State to the Federal court for diversity of citizenship and the fraudulent joinder of a resident defendant is sufficiently specific in its allegation as to the fraudulent joinder, hut the complaint alleges that the cause of action accrued since the enactment of the Federal statute raising the amount to a sum exceeding $3,000, etc., necessary to confer jurisdiction on the Federal court, and lays the damages at $3,000, and no facts are stated in the petition to sustain the charge that the allegation in the complaint as to the time the cause of action accrued is fraudulent, the petition 'for removal will he denied. The relative duties and jurisdictions of the State and Federal courts upon such motions pointed out by Allen, J.
    Appeal by plaintiffs from Cline, J., at February Term, 1915, of JACKSON.
    Tbis is an appeal from an order removing tbe action from tbe State to tbe Federal court upon tbe ground of diverse citizenship.
    Tbe action was brought by tbe plaintiffs against tbe defendant W. T. Clayton, a citizen and resident of Jaelcson County, and tbe defendant Champion Fiber Company, a corporation duly organized under the laws of tbe State of Ohio, returnable to February Term, 1915, of tbe Superior Court of Jackson County.
    The plaintiffs filed their complaint within tbe first three days of court, alleging tbat they were tbe owners of a certain tract of land of 645 acres in said county and tbe acid and pulp woods thereon, and tbat tbe defendants made and entered into a contract on 7 March, 1907, with tbe plaintiffs under tbe terms of wbicb tbe defendants undertook that they would, with in five years and within tbe life of a certain flume which bad been constructed by tbe plaintiffs and was in said agreement sold to tbe defendants, cut and remove all tbe said acid and pulp woods from tbe said lands, paying tbe plaintiffs tbe sum of $1 per cord therefor, in tbe manner and under the terms and conditions a,s alleged, and wbicb said contract was to be completed and all of said acid and pulp woods removed and paid for on or by 7 March, 1912; that plaintiffs’ cause of action accrued on 7 March, 1912; that tbe defendants bad until 7 March, 1912, to complete their said' contract and make settlement therefor, but that tbe defendants failed and neglected to remove tbe said woods from tbe said lands and to make settlements therefor, and left large quantities of said woods standing and being thereon; and in tbe meantime tbe flume line, by wbicb alone tbe same was made marketable, became unfit for use, and that tbe plaintiffs; by reason of tbe breach of said contract, were damaged in tbe sum of $3,000.
    During said February term of court, and in apt time, tbe defendant Champion Fiber Company filed its duly verified petition and bond for removal of tbe action to tbe Federal Court for tbe Western District of North Carolina, setting forth two grounds for removal: (1) that tbe matter in controversy exceeded, exclusive of interest and costs, tbe sum of $2,000, and that plaintiffs’ cause of action arose prior to 1 January, 1912; (2) that tbe defendant W. T. Clayton was not a necessary party defendant, and was joined as such with tbe fraudulent purpose of depriving tbe Federal court of its rightful jurisdiction.
    No fraud is alleged as to tbe first cause of removal, tbe defendant simply denying that tbe cause of action arose prior to January, 1912. Tbe court signed an order removing tbe cause to tbe Federal court, and ibe plaintiffs excepted and appealed to tbe Supreme Corirt.
    
      Coleman C. Cowan for plaintiffs.
    
    
      Martin, Rollins & Wright for defendants.
    
   AuleN, J.

Tbe questions of tbe right to tbe removal of actions from tbe State to tbe Federal courts, and of tbe procedure on motions made for this purpose, have been very fully considered in several recent decisions of this Court, and tbe rules deducible from these authorities and from tbe decisions of tbe Supreme Court of tbe United States are:

1. That tbe petition for removal must state tbe facts upon wbicb tbe motion is based, and not mere conclusions.

2. That tbe petition is insufficient if it does no more than deny tbe cause of action alleged in tbe complaint.

3. That tbe State court has jurisdiction for tbe purpose of determining if tbe facts alleged present a removable cause.

4. That the State courts cannot inquire into and decide as to the truthfulness of the facts alleged in the petition.

5. That if the facts alleged in the petition are sufficient to justify a removal, it is the duty of the courts of the State to make the order for the removal, and that it is for the Federal court to inquire into and determine the truth of the facts alleged upon a motion by the plaintiff in the Federal court to remand to the State court. Herrick v. R. R., 158 N. C., 307; Rea v. Mirror Co., 158 N. C., 28; Hyder v. R. R., 167 N. C., 588; R. R. v. Cockrill, 232 U. S., 146.

In R. R. v. Cockrill, supra, an action was commenced in the State courts of Kentucky against the railroad, a Virginia corporation, and against the engineer and fireman, who were citizens of Kentucky, to recover damages for wrongful death. The defendant railroad company filed its petition for removal upon the ground of diverse citizenship, alleging a fraudulent joinder of the engineer and fireman; but this allegation consisted only in charging fraud in general terms and in a denial of negligence. The State courts denied the action to remove, and proceeded with the trial, and from the final judgment in the Supreme Court of Kentucky the defendant sued out a writ of error to the Supreme Court of the United States. The judgment of the State courts was affirmed, and the Court said of the rule governing removals:

“The right of removal from a State to a Federal court, as is well understood, exists only in certain enumerated classes of cases. To the exercise of this right, therefore, it is essential that the case be shown to be within one of those classes, and this must be done by a verified petition, setting forth, agreeably to the ordinary rules of pleading, the particular facts, not already appearing, out of which the right arises. It is not enough to allege in terms that the case is removable, or belongs to one of the enumerated classes, or otherwise to rest a right upon mere legal conclusions. As in _ other pleadings, there must be a statement of the facts relied upon, and not otherwise appearing, in order that the court may draw the proper conclusion from all the facts, and that, in the event of the removal, the opposing party may take issue, by a motion to remand, with what is alleged in the petition. ... A civil case, at law or in equity, presenting a controversy between citizens of. different States, and involving the requisite jurisdictional amount, is one which may be removed by the defendant, if not a resident of the State in which the case is brought; and this right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy. . . . Merely to traverse the allegations upon which the liability of a resident defendant is rested, or to apply the epithet ‘fraudulent’ to the joinder, will not suffice. The showing must be such as compels the conclusion that the joinder is without right and made in bad faith. . . . It is thoroughly settled that issues of fact arising upon a petition for removal are to be determined in tbe Federal court, and that tbe State court, for tbe purpose of determining for itself whether it will surrender jurisdiction, must accept as true tbe allegations of fact in such petition.”

Applying these principles, and considering tbe petition in connection with tbe complaint, we would have no hesitation in affirming tbe order of removal if tbe petition rested alone on tbe fraudulent joinder of tbe defendants, as tbe facts constituting tbe fraud are specifically alleged; but if tbe other defendants were stricken from tbe record we would have a cause of action for $3,000 stated against tbe defendant corporation arising in 1912, after tbe enactment of tbe Judiciary Act of 1911 increasing tbe jurisdictional amount to $3,000, and no facts are stated in tbe petition tending to sustain tbe charge that tbe allegation in tbe complaint as to tbe time when tbe cause of action accrued is fraudulent; and upon tbis ground tbe order is

Reversed.  