VENNER v. N. Y. C. RY., 2 Ohio Law Abs. 146

DENISON, Cir. J. Epitomized Opinion Venner filed his petition in Cuyahoga Common Pleas, seeking an injunction against the R. R. Co. to prevent it from issuing certain equipment trust bonds. The R. R. Co. removed the case to the District Court of Cleveland upon the ground that it arose under federal laws. The District C urt overruled the motion to remand and denied a preliminary injunction. Venner appealed to this court. In his petition, Venner based his right to an injunction upon the theory that the Ohio charter of the R. R.

Co. forbad it to become a guarantor for other corporations, and that the challenged transaction involved this forbidden guarantee. The petition also alleged that the securities had not been authorized by the Ohio R. R. Commission, as required by Ohio laws.

In reversing the judgment, the Circuit Court of Appeals held: 1. “We consider it well settled that a cause of action does not arise under federal laws so as to justify removal, unless the plaintiff’s right, to enforce which the suit is brought, alises out of and depends upon those laws, so that both in stating and in proving his case he must show that his right to recover stands upon the federal law; and even though the complaint may disclose that the case will turn upon and be ruled by the construction and effect given to some federal law under which defendant is claiming, the federal jurisdiction will fail.” 2. “It is the rule that to .justify removal to the federal court, the controlling federal question must appear directly and positively upon the complaint; and cannot be raised by vague inferences from its allegations, nor by judicial knowledge of what the finally controling laws may be.”