Kolze v. Hoadley

Citations

• 200 U.S. 76
• 26 S. Ct. 220
• 50 L. Ed. 377
• 1906 U.S. LEXIS 1457

Syllabus

<p>In c'onstruing,4 1 of the act of August 13, 1888, which provides that Circuit and District Courts shall hot have cognizance of suits to-recover the contents of any promissory note or chose in action in favor of an assignee nr subsequent holder unless the suit could have been prosecuted in such court, if no assignment or transfer had beer, made, this court has held that:</p> <p>A suit to recover the contents of a promissory note or other chose in action is a suit to recover the amount due upon such note, or the amount claimed to be due upon an account, personal contract or other chose in action!</p> <p>A suit to foreclose a mortgage is within the inhibition of the act, and can only be maintained where the assignor was competent to file the bill.</p> <p>The bill or other pleading must contain an averment showing that the .suit could have been maintained by the assignor if the assignment had not been made.</p> <p>A suit may be maintained between the immediate parties to a promissory note as indorser or indorsee, provided the requisite diversity of citizenship appears as between them, or upon a new contract arising subsequently to the execution of the original, notwithstanding a suit could not have been maintained upon the original contract, anddn such case the original contract may be considered to ascertain the amount of damages.</p> <p>Although an action of fraud might be sustained upon the facts involved in an action where the. requisite diversity of citizenship exists if the suit is in substance one to foreclose a mortgage, and it appears by the bill that the fraud is a mere incident, the suit is one within the meaning of § 1 of the aet[of August 13, 1888, and will not lie in a Federal court unless plaintiff’s assignor might have maintained the bill had no transfer been made.</p>