did or could do by virtue of the federal legislation, is solely evidentiary of and incidental to the main issue raised in the complaint. Likewise the issue of the constitutionality of the New Jersey Statutes under which the Bridge Commission assumed to act are ancillary to the inquiry into the validity of its creation and its acts. The following language used in the Gully case is apt on the question at bar: 'The most one can say is that a question of federal law is lurking in the background, just as farther in the background there lurks a question of constitutional law, the question of state power in our federal form of government. A dispute so doubtful and conjectural, so far removed from plain necessity, is unavailing to extinguish the jurisdiction of the states.' 299 U.S.AT page 117, 57 S. Ct.at page 99, 81 L. Ed. 70.
The above case, Gully v. First National Bank, 299 U.S. 109, 57 S. Ct. 96, 81 L. Ed. 70, contains the most recent pronouncements of the Supreme Court concerning the principles of removal as founded upon the allegation that a cause arose under the Constitution and laws of the United States. In it the plaintiff, Gully, a state tax collector, brought suit in a Mississippi court against the First National Bank in Meridian which, in acquiring assets of an insolvent national bank for taxes assessed upon its capital stock, surplus, and undivided profits exclusive of the value of its real estate tax. Under Mississippi law all taxes thus assessed were debts owing by the shareholders of the insolvent bank which that bank was under a duty to pay, as their agent, out of moneys belonging to them then in its possession and that the bank in violation of its covenant failed to pay the taxes of its insolvent predecessor. The case was removed to the federal district court upon the ground that the suit was one arising under the Constitution and laws of the United States and there tried over the plaintiff's motion to remand. His complaint was dismissed after a trial on the merits and the Circuit Court of Appeals for the Fifth Circuit, 81 F.2d 502, affirmed the judgment and overruled the objection that the cause was triable in the state court upon the ground that the power to lay a tax upon the shares of national banks had its 'origin and measure' in a federal statute, 12 U.S.C.A. § 548, and that by necessary implication the plaintiff rested upon that statute in suing for the tax. The United States Supreme Court reversed and remitted the cause to the district court with instructions to remand it to the state court because it held that the suit was upon a contract having its genesis in the law of the state, enforcement of which had no necessary connection with the existence of a controversy arising under federal law. While the tax sought to be recovered had to be consistent with the federal statute which permitted state taxation of national bank shareholders, its basis was a statute of the state. During the course of the opinion the following basic principles were enunciated, 299 U.S.AT pages 112-114, 57 S. Ct.at page 97, 81 L. Ed. 70:
'To bring a case within the statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action. Starin v. New York, 115 U.S. 248, 257, 6 S. Ct. 28, 29 L. Ed. 388; First National Bank v. Williams, 252 U.S. 504, 512, 40 S. Ct. 372, 374, 64 L. Ed. 690. The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another. Id; King County v. Seattle School District, 263 U.S. 361, 363, 364, 44 S. Ct. 127, 128, 68 L. Ed. 339. A genuine and present controversy, not merely a possible or conjectural one, must exist with reference thereto ((City of) New Orleans v. Benjamin, 153 U.S. 411, 424, 14 S. Ct. 905, 38 L.ed. 764; Defiance Water pco. v. Defiance, 191 U.S. 184, 191, 24 S. Ct. 63, 48 L. Ed. 140; Joy v. St. Louis, 201 U.S. 332, 26 S. Ct. 478, 50 L. Ed. 776; City & County of Denver v. New York Trust Co., 229 U.S. 123, 133, 33 S. Ct. 657, 57 L. Ed. 1101), and the controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal. (State of) Tennessee v. Union & Planters Bank, 152 U.S. 454, 14 S. Ct. 654, 38 L. Ed. 511; Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S. Ct. 42, 53 L. Ed. 126; The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S. Ct. 410, 57 L. Ed. 716; Taylor v. Anderson, 234 U.S. 74, 34 S. Ct. 724, 58 L. Ed. 1218. Indeed, the complaint itself will not avail as a basis of jurisdiction in so far as it goes beyond a statement of the plaintiff's cause of action and anticipates or replies to a probable defense. Devine v. Los Angeles, 202 U.S. 313, 334, 26 S. Ct. 652, 50 L. Ed. 1046; The Fair v. Kohler Die & Specialty Co., supra.
'Looking backward we can see that the early cases were less exacting than the recent ones in respect of some of these conditions. If a federal right was pleaded, the question was not always asked whether it was likely to be disputed. This is seen particularly in suits by or against a corporation deriving its charter from an act of Congress. Osborn v. Bank of the United States, 9 Wheat. 738, 817-828, 6 L. Ed. 204; Pacific Railroad Removal Cases, Union Pacific Railway Co. v. Myers, 115 U.S. 1, 11, 5 S. Ct. 1113, 29 L. Ed. 319. Modern statutes have greatly diminished the importance of those decisions by narrowing their scope. Gay v. Ruff, 292 U.S. 25, 35, 54 S. Ct. 608, 613, 78 L. Ed.1099, 92 A.L.R. 970; Puerto Rico v. Russell & Co., 288 U.S. 476, 483, 53 S. Ct. 447, 449, 450, 77 L. Ed. 903. Federal incorporation is now abolished as a ground of federal jurisdiction except where the United States holds more than one-half the stock. Act of February 13, 1925, c. 229, Sec. 12, 43 Stat. 936, 941, (now 28 U.S.C.A. § 1349). Partly under the influence of statutes disclosing a new legislative policy, partly under the influence of more liberal decisions, the probable course of the trial, the real substance of the controversy, has taken on a new significance. 'A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction, or effect of such a law, upon the determination of which the result depends.' Shulthis v. McDougal, 225 U.S. 561, 569, 32 S. Ct. 704, 706 L. Ed. 1205. Cf. First National Bank v. Williams, supra; Hopkins v. Walker, 244 U.S. 486, 489, 37 S. Ct. 711, 61 L. Ed. 1270; Shoshone Mining Co. v. Rutter, 177 U.S. 505, 507, 20 S. Ct. 726, 44 L. Ed. 864. Only recently we said after full consideration that the doctrine of the charter cases was to be treated as exceptional, though within their special field there was not thought to disturb them. Puerto Rico v. Russell & Co., supra. 'We should fly in the face of this legislative policy and disregard precedents which we think controlling were we to extend the doctrine now.' Id. Today, even more clearly than in the past, 'the federal nature of the right to be established is decisive -- not the source of the authority to establish it.' Id.'
As contended by the petitioners, it well may be necessary to resort to the federal acts to determine what would be the purchase price of the bridges as contemplated therein as the calculation may bear upon the charges of excessively illegal private profits contained in the information and complaint. But as the plaintiffs argue, the mere necessity for reference to and construction of the federal acts does not create the substantial and basic question under this complaint. In such case the federal acts may be drawn in collaterally in the way of evidence relevant to the truth or falsity of the allegations which create the basic issue. Im issue. If, in the course of the litigation such a contingency arises, as was stated in the case of Defiance Water Co. v. Defiance, 191 U.S. 184, at page 193, 24 S. Ct. 63, 67, 48 L. Ed. 140: ' * * * state courts are perfectly competent to decide Federal question arising before them, and it is their duty to do so.' and in the case of Gold Washing Co. v. Keyes, 96 U.S. 199, at page 203, 24 L. Ed. 656: 'A cause cannot be removed from a state court simply because in the progress of the litigation, it may become necessary to give a construction to the Constitution or laws of the United States.'
The petitioners claimed that a number of cases similar to the instant case present situations which indicate that the pertinent rules have been consistently applied in such a way as to warrant the conclusion that this suit is one 'founded on a claim or right arising under the Constitution, treaties or laws of the United States.' They urged the following cased as authority: New Orleans, M. & T.R. Co. v. Mississippi, 102 U.S. 135, 26 L. Ed. 96; People of State of Illinois ex rel. Attorney General v. Illinois Central R. Co., C.C., 16 F. 881; Id., C.C., 33 F. 721; People v. Sanitary District of Chicago, C.C., 98 F. 150; Great Northern Ry. Co. v. Galbreath Cattle Co., 271 U.S. 99, 46 S. Ct. 439, 70 L. Ed. 854; McGoon v. Northern Pac. Ry. Co., D.C., 204 F. 998; Hartford Fire Ins. Co. v. Kansas City, M. & O. Ry. Co., D.C., 251 F. 332; Smith v. Kansas City T. & T. Co., 255 U.S. 180, 41 S. Ct. 243, 65 L. Ed. 577; and Downey v. Geory-Wright Tobacco Co., D.C., 38 F.Supp. 33.
In the New Orleans M. & T. Railroad Co. case, the State of Mississippi petitioned one of its courts for a writ of mandamus to compel the Railroad Company to remove a stationary bridge over the Pearl River on the line between Louisiana and Mississippi and to construct a drawbridge in its place which would give passageway for vessels. The State claimed that the stationary bridge obstructed navigation of the river, was in violation of the company's charter, and a public nuisance to the damage of the People of Mississippi; that by an Act of Congress under w iCh the State of Mississippi was admitted into the Union there was an engagement on the part of the United States that the Pearl River, among other waterways, should be free to all inhabitants of the State of Mississippi; and that the bridge in question was an obstruction to navigation upon it. The Railroad sought removal to the federal court on the ground that the bridge in question had been constructed under an act of Congress whereby it was authorized to construct and maintain bridges across navigable waters on the route of its railroad between Mobile and New Orleans which was to be recognized as a post road and that after them when they became an obstruction to the navigable waters. It contended that there was raised in the case a real and substantial controversy which depended upon the construction and effect of an act of Congress. The Supreme Court held that the defendant's petition for removal should have been granted and stated: 'While the case raises questions which may involve the construction of State enactments, and also, perhaps, general principles of law, not necessarily connected with any Federal question, the suit otherwise presents a real and substantial dispute or controversy which depends altogether upon the construction and effect of an act of Congress.' 102 U.S. at pages 139, 140, 26 L. Ed. 96. (Italics supplied.)
The petitioners point to the further language of the court as follows: 'That it is not sufficient to exclude the judicial power of the United States from a particular case, that it involves questions which do not at all depend on the Constitution or laws of the United States; but when a question to which the judicial power of the Union is extended by the Constitution forms an ingredient of the original cause, it is within the power of Congress to give the Circuit Courts jurisdiction of that cause, although other questions of fact or of law may be involved in it.' 102 U.S. at page 141, 26 L. Ed. 96. (Italics by the petitioner.)
In reliance upon these pronouncements the petitioners herein contend that there is in the instant case also a question dependent upon the construction or effect to be given federal statutes which makes the case removable, forming an ingredient of the original cause. However, in the cited case, there was a real and substantial controversy which depended altogether on the construction of acts of Congress constituting an ingredient of the original cause. In the case before us resort to the necessity for an interpretation of the federal acts can only come collaterally to to the real and substantial issues provoked by the complaint which are entirely aside from the federal acts or their interpretations. The language in the cited case is strongly in favor of federal jurisdiction because the facts and circumstances in that case pit federal legislation against federal legislation of the real and substantial issue. The light of the Gully case illuminates the 'ingredient' theory of Railroad v. Mississippi with the following language: 'Some tests are well established. To bring a case within the statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action. * * * The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect and defeated if they receive another.' 299 U.S.AT page 112, 57 S. Ct.at Age 97, 81 L. Ed. 70.
Applied to the case of Railroad v. Mississippi this would have been consistent with the decision found therein. Applied to the instant case we find no such right or immunity created by the federal acts as an essential element of the cause of action nor would it rise or fall as effect is given to those federal acts. Such effect as may be given to them at most will be evidentiary on the real and substantial issues which revolve around charges entirely cognizable under the state jurisdiction.
The Illinois Central R. Co. case involved a dispute as to the title to submerged lands of Lake Michigan. The court therein stated: 'An analysis of the pleadings will show (1) that the relief which the state seeks depends, in part, upon the construction, operation, and effect of Virginia's act of cession, and the acts of congress creating the territory and admitting the state of Illinois into the Union; (2) that, apart from the case as made by the information, the rights of both parties depend, mainly, upon the inquiry whether the act of the Illinois legislature passed in 1873 -- set out both in the information and the answer -- is in violation of those clauses of the national constitution to which reference is made in the answer.' 16 F. 881, 886.
It presented a real and substantial dispute governed by the Constitution and laws of the United States, the conflicting claims being supported if one construction or effect was given or defeated if they received another, a situation not existing in the present action.
In the Sanitary District of Chicago case, the State of Illinois claimed that a right had accrued to it to have the Chicago River maintained at its then level at the point of connection of the Illinois & Michigan Canal which it alleged an act of Congress required it to maintain as a navigable waterway for the free passage of any property. After a review of the complaint, the Circuit Court denied a motion to remand holding that a federal question was presented on the authority of New Orleans, M. & T. Railroad Co. v. Mississippi since antagonistic constructions of the acts of Congress involved would determine the rights claimed by the State and the relief requested in the bill of complaint. Such a determination cannot be claimed upon the basis of the federal acts in the instant case.
The Galbreath Cattle Case, the McGoon case, and the Hartford Insurance case all involved suits for damages to cattle shipped in interstate commerce under a federal act known as the Carmack Amendment, 49 U.S.C.A. § 20. Hence they presented real and substantial federal questions and have no application here.
The Smith case was a shareholder's action to enjoin directors of a Trust company from investing funds in bonds of a Federal Land Bank and Joint Stock Land Bank upon the ground that an act of Congress authorizing creation of such banks and the issue of such bonds, was unconstitutional. The complaint was held to state a cause of action within the original jurisdiction of a federal district court because the constitutionality of an act of Congress was directly drawn into question and the decision depended upon the determination of this issue unlike the issue in this case.
In the Downey case, the plaintiff brought an action in a state court against a tobacco warehouse company alleging that the company made illegal and confiscatory deductions from the amount of the plaintiff's crop and prayed for an accounting and for judgment declaring rights and duties of the parties. The defendant petitioned for removal. Although the complaint was framed as a common law action, in assumpsit, the court, on analysis found, after taking judicial notice, that the action was governed by the terms of the Agriculture Adjustment Act of 1938, 7 U.S.C.A. § 1311 et seq., and granted removal since the complaint disclosed a controversy of such nature that it could only be correctly determined by a declaration of the law in the light of the federal statute and the regulations made pursuant to it. Again this is distinguishable from the issue raised by the present complaint.
With a fine prescience anticipatory of the questions raised in the case at bar, Mr. Justice Cardozo offered the following 'guide to the perplexed' in the final passage of the Gully case: 'This Court has had occasion to point out how futile is the attempt to define a 'cause of action' without reference to the context. United States v. Memphis Cotton Oil Co., 288 U.S. 62, 67, 68, 53 S. Ct. 278, 280, 77 L. Ed. 619. To define broadly and in the abstract 'a case arising under the Constitution or laws of the United States' has hazards of a kindred order. What is needed is something of that common-sense accommodation of judgment to kaleidoscopic situations which characterizes the law in its treatment of problems of causation. One could carry the search for causes backward, almost without end. Bird v. St. Paul F. & M. Insurance Co., 224 N.Y. 47, 51, 120 N.E. 86, 13 A.L.R. 875; Leyland Shipping Co. v. Norwich Fire Insurance Society, (1918) A. C. 350, 369; Aetna Insurance Co. v. Boon, 95 U.S. 117, 130, 24 L. Ed. 395; Milwaukee & St. Paul R. Co. v. Kellogg, 94 U.S. 469, 474, 24 L. Ed. 256. Instead, there has been a selective process which picks the substantial causes out of the web and lays the other ones aside. As in problems of causation, so here in the search for the underlying law. If we follow the ascent far enough, countless claims of right can be discovered to have their source or their operative limits in the provisions of a federal statute or in the Constitution itself with its circumambient restrictions upon legislative power. To set bounds to the pursuit, the courts have formulated the distinction between controversies that are basic and those that are collateral, between disputes that are necessary and those that are merely possible. We shall be lost in a maze if we put that compass by.' 299 U.S. 117, 118, 57 S. Ct.at page 100, 81 L. Ed. 70.
The search here reveals as basic, real and substantial the issues of whether there was a fraudulent and illegal organization of the Bridge Commission and whether its acts were invalid. The provisions of the federal acts furnish no essential element of those issues and the construction or effect of the federal acts will not determine the basic issues. Hence they are cognizable under the jurisdiction of the state court and the case must be remanded.
An order in conformity with this opinion should be noticed for settlement.