26 F.(2d) 98 RELLSTAB, District Judge. The plaintiff alleged infringement of its patent by the defendant. Issue was joined October 11, 1927. Depositions taken pursuant to stipulation and the statutes were filed January 12, 1928. After the cause was listed for trial at the present term of court, the defendant moved to amend its answer by inserting a counterclaim, alleging infringement by the plaintiff of certain letters patent owned by the defendant, which letters patent were issued on March 20, 1928. The proposed counterclaim alleges that it "might be the subject, of an independent suit in equity" against the plaintiff and his named licensees. [1] The allowance of this amendment is opposed by the plaintiff on the grounds, first, that it does not arise "out of the transaction which is the subject-matter of the suit"; and, second, that it is based on a patent issued long after joinder of the issue tendered by the plaintiff's bill, and after taking testimony in support thereof. The first contention is sufficiently answered by equity rule 30, which, by its terms, permits the setting up by the defendant of a counterclaim "which might be the subject of an independent suit in equity" against the plaintiff. American Mills Co. v. American Surety Co., 260 U. S. 360, 365, 43 S. Ct. 149, 67 L. Ed. 306; Moore v. New York Cotton Exchange, 270 U. S. 593, 609, 46 S. Ct. 367, 70 L. Ed. 750, 45 A. L. R. 1370; Electric Boat Co. v. Lake Torpedo Boat Co. (D. C. N. J.) 215 F. 377; Buffalo Specialty Co. v. Vancleef (D. C. Ill.) 217 F. 91; Paramount Hosiery Form Drying Co. v. Walter Snyder Co. (D. C. Pa.) 244 F. 192; Victor Talking Mach. Co. v. Brunswick-Balke-Collender Co. (D. C. Del.) 279 F. 758. The second contention is more formidable. Equity rule 30 requires that any counterclaim set up against the plaintiff shall be made in the defendant's answer. If its subject-matter arises "out of the transaction which is the subject-matter of the suit," it must be pleaded; if it arose independently of such transaction, it is optional with the defendant whether he sets it out in that suit or makes it the subject of an independent action. The purpose of the mandatory provision of this rule is to end in one suit all controversies arising out of the same transaction. If the defendant fails to counterclaim such a controversy, by necessary implication he is forever barred from obtaining any affirmative relief based thereon. There is no bar, however, by virtue of this rule, if he fails to counterclaim a demand not so arising. In order "to pronounce a final judgment in the same suit both on the original and cross-claims," purposed by rule 30, a time limit must be put on the defendant's right to interpose a counterclaim. In the case of one founded on a transaction put in suit by the plaintiff, as it is actionable at the time the plaintiff's cause of action accrues, it should be interposed at the time the defendant is required or permitted to plead to the bill. When must a counterclaim founded on a cause of action not arising out of the transaction involved in the plaintiff's suit have accrued, to permit it to be set up? No reported federal case has decided this precise question. It was present and noted in Parker Pen Co. v. Rex Mfg. Co. (D. C. R. I.) 11 F. (2d) 533, 535, but the decision denying the motion to amend the answer by setting up a counterclaim founded on a patent issued subsequent to the filing of the original answer rested on another ground. However, in a footnote to that case, Judge Brown cites a number of English authorities which deal with a similar rule, embodied in Order xix of the English practice, and upon which the pertinent part of equity rule 30 is based. These cases are not in accord. In Original Hartlepool Collieries Co. v. Gibb, 5 Ch. Div. 713, it was held that the counterclaim must be limited to the date when the plaintiff issues his writ. The contrary is held in the later case of Beddall v. Maitland, 17 Ch. Div. 174, which permitted a counterclaim in respect to a cause of action which accrued subsequent to the issuing of the writ. In Gray v. Webb, 21 Ch. Div. 802, it was held that the court has a discretion to exclude a counterclaim which may unduly delay the action. [2] The instant case does not call for a de- fringed by the plaintiff, was not granted until five months after issue was joined on the plaintiff's bill; and the application to counterclaim that controversy was not made until after the original suit was listed for trial by the court, following the taking and filing of depositions of nonresident witnesses. To now add the proposed new controversy to the plaintiff's suit already partly tried would of necessity delay its determination-a delay that in the circumstances would be undue and which, in my judgment, should not be permitted. The motion to amend in the particulars noted is denied. BROWN v. EMPIRE GAS & FUEL CO. et al. District Court, D. Kansas. Third Division. May 14, 1928. No. 784. 1. Removal of causes 48-Controversy Involved in lessor's action against lessee and nonresident assignee for cancellation of lease and damages held separable. Controversy involved in lessor's action against lessee and assignee of lease for cancellation of lease and damages held separable, as between lessee and nonresident assignee, as bearing on nonresident assignee's right to removal to federal court. 2. Removal of causes 117-Case properly removed should not be remanded on sole ground of defendant's failure to plead in time (Jud. Code, § 29 [28 USCA § 72]). A cause properly removed should not be remanded on the sole ground that removing defendant fails to plead in 30 days as provided by Judicial Code, § 29 (28 USCA § 72); the District Court, by rendering a judgment by default, or imposing terms for pleading after expiration of 30 days, has power to enforce such procedural provision of the statute, without remanding. 3. Trial (2)-Case involving cancellation of oil and gas lease, with incidental claim for damages, involves equitable relief, and is transferrable. Case where principal relief sought was cancellation of oil and gas lease, with incidental relief for damages for failure to cancel, constitutes equitable cause of action, and is trans ferrable on motion. At Law. Action by Charles W. Brown against the Empire Gas & Fuel Company and another, originally brought in the state court. On plaintiff's motion to remand and defendant's motion to transfer cause to equity docket. Motion to remand overruled, and motion to transfer sustained. E. D. Mikesell, of Fredonia, Kan., for plaintiff. Warren T. Spies, of Bartlesville, Okl., for defendants. MCDERMOTT, District Judge. This action was originally brought in the district court of Elk county, Kan. The petition alleges that the plaintiff is the owner of the fee title to certain real estate in that county; that on August 6, 1919, he executed an oil and gas lease to defendant H. W. Allman; that said lease provided that it should remain in force for five years and as long thereafter as oil and gas or either of them should be produced from said land. The petition alleges Allman drilled 52 wells on such premises, all of which were producing either oil or gas in paying quantities; that, while oil and gas have been produced in paying quantities from such wells, oil and gas is not now being produced on a part of the real estate under lease; that on a part of such lease wells were drilled which for a time produced natural gas, but that such wells have ceased to produce and have now been disconnected. The plaintiff alleges that the lease should be canceled as to so much of the real estate as was not actually producing oil and gas on August 6, 1924. He alleges that on February 26, 1927, he served a written notice on both of the defendants, under the Kansas statute, that the lease had expired, and made demand that the lease be released of record. The petition alleges that each of the defendants failed to comply with said demand. The prayer of the petition is that the lease be canceled of record, and that the plaintiff recover from each of the defendants the sum of $8,000 actual damages, $100 statutory damages, and $1,000 attorney's fee. The petition further shows that on the 16th of August, 1926, the defendant Allman assigned said lease to his codefendant the Empire Gas & Fuel Company. The lease expressly permits of assignment. The plaintiff claims that the lease became forfeited because of the failure of the defendants diligently to develop the lease, and by its express terms. [1] The defendant Allman is a resident of Kansas, and the defendant corporation is a nonresident of Kansas. The controversy presented is separable. After the assignment of the lease in August, 1926, the action, as far as it prays for a cancellation of the lease, concerns the assignee, the Empire Gas & Fuel Company, alone. As far as the action for statutory damages is concerned, that action is against the Empire Company alone. While 26 F.(2d) 100 the statutory notice was served upon both of the defendants, the defendant Allman was utterly without power to comply with the notice, for, if Allman had executed a release as prayed for by the notice, it would have been of no effect in canceling the lease of record, for the record title in the lease stood in the name of the Empire Company at the time the notice was served. Since the defendant Allman could not have possibly complied with the notice if he had been disposed so to do, he cannot be held for damages because of his failure. As far as the prayer for damages on account of alleged failure to diligently develop the lease, the controversy is likewise separable. The implied covenant to diligently develop is one that necessarily runs with the land; if, during the time that Mr. Allman owned this lease, he breached the covenant, a controversy between the plaintiff and Mr. Allman would arise out of the facts as they existed up to the time that he assigned the lease. As to any controversy between the plaintiff and the Empire Company for failure to diligently develop the lease, that controversy would depend upon the facts as they existed after the assignment. In short, any controversy that may exist between the plaintiff and Mr. Allman is entirely separate and distinct from any controversy that exists between him and the Empire Company. The petition states no cause of action against Mr. Allman as far as the petition asks for a cancellation of the lease, or for statutory damages. The plaintiff then insists that, even if the controversy presented is one otherwise removable, the action should be remanded because the nonresident defendant failed to file any pleading in this court within 30 days after the transcript was filed. The record shows that the transcript was filed in this court on July 20, 1927; that a motion to remand was filed on July 27, 1927. Section 29 of the Judicial Code (28 USCA 872) provides for the various steps to be taken in removing a cause. After the provisions with reference to the notice of the filing of the petition for removal, the contents of the petition for removal, the bond for removal, the decree of the state court in the premises, the necessity of filing the transcript within 30 days of the removal, the statute then provides: The parties so removing the said cause shall, within thirty days thereafter, plead, answer, or demur to the declaration or complaint in said cause, and the cause shall then proceed in the same manner as if it had been originally commenced in the said District Court." In Wena Lumber Co. v. Continental Lumber Co., 270 F. 795, the District Court of the Southern District of Mississippi was confronted with this situation: A defendant removed a cause to the United States court. More than 8 months elapsed before the defendant took any further steps in the case. The defendant then filed a motion to quash the process, and the plaintiff moved to remand the cause. The court held that, whether a defendant should be allowed to plead after the expiration of 30 days, or whether the cause should be remanded for failure to plead, was within the discretion of the court. The court held that to permit the defendant to plead after 8 months would be to give him an unfair advantage, and the cause was remanded. In Virginia Bridge & Iron Co. v. United States Shipping Board, 300 F. 249, the District Court of the Southern District of Alabama was confronted with this situation: More than 30 days elapsed after the filing of the transcript before the defendant filed any pleading. Before the defendant did plead, the plaintiff filed a motion to remand on the specific ground that the defendant had failed to plead within the time prescribed by statute. That court predicated its decision upon the Wena Lumber Company Case, supra, but the court in that case went farther, and held that it was not a matter of discretion with the trial court, but that the trial court was bound to remand the cause if requested so to do, because of failure to plead within 30 days. In Egger v. Julian Petroleum Corporation, 22 F. (2d) 714 (D. C. Tex. N. D.), the plaintiff moved to remand on the ground that defendant had not pleaded within the 30 days prescribed. The court held that requirement was one that could be waived, but, if the plaintiff filed a motion to remand prior to the defendant pleading, then it must be sustained. The condition of the law is somewhat uncertain. It has been held to be a jurisdictional requirement; it has been held to be a requirement which could be waived; and it has been held to be within the discretion of the court. It is vigorously argued that the provision in the statute with reference to the time of pleading is a regulatory step, and not a jurisdictional requirement; that some time must be fixed by Congress for defendant to plead after the case is removed here, because there is no other statute, either federal or state, that prescribes a time for pleading after removal; that, being merely a regulatory statute, the failure of the defendant to plead within the 30 days is not jurisdictional at all, and that the court has ample power to enforce such regulation by giving judg ment by default or by imposing terms on the filing of a pleading out of time; that it is neither necessary nor proper to oust the District Court of its jurisdiction because of failure to plead within the prescribed time. It is also pointed out that none of the cases cited are binding upon this court, and that no authoritative pronouncement of the law has been made. On argument it is further urged that, if jurisdiction depends on the time of filing the first pleading, it likewise would depend upon whether the later proceedings were properly conducted. The statute under discussion provides that "and the cause shall then proceed in the same manner as if it had been originally commenced in the said District Court." If any of these provisions regulating proceedings of this court are jurisdictional, what would be the result if a defendant filed his first pleading within the 30 days, but at some later step in the cause failed to proceed in the same manner as if the case had been originally commenced in this court? It would seem that the same argument would require that the jurisdiction of this court should be promptly ousted if any of the later proceedings failed to conform. [2] While the decisions of the cases above cited are entitled to, and have received, careful consideration, I am quite unable to bring myself to the conclusion that jurisdiction of this court is ousted, after it has once properly attached, by mere failure to take some procedural step in strict accordance with the statute. The intention of Congress to have the jurisdiction of this court a sort of tentative jurisdiction, which can attach to-day and be lost to-morrow, with the resulting uncertainty and delay in litigation, ought not to be lightly imputed. In any event, where a plaintiff has filed a motion to remand, before the time has expired for the defendant to plead, this court is not custed of its jurisdiction by a failure of the defendant to plead within the prescribed time. It is quite unnecessary for defendant to plead to the merits of the cause while a motion to remand is pending and undecided, for, until it is determined in what court the further proceedings will be had, any other pleading simply serves to incumber the record. It appearing therefore that a motion to remand was filed in this cause before the time for the defendant to plead had expired, the motion to remand is not well taken. Furthermore, it would seem to be equally clear that, if the defendant does in fact plead, after the 30 days has expired, either by con sent of the plaintiff or by order of court extending the time, a motion to remand the cause filed thereafter on this ground would come too late. In other words, even under the authority of the cases cited, a plaintiff would not be in a position to remand the cause on this ground, unless a motion to remand for that reason was made before the defendant did in fact plead. The motion to remand will be overruled. [3] A motion is now made by the defendant to transfer the cause to the equity docket. The principal relief sought is to cancel the lease, which is equitable. The damages sought are incidental to the failure to cancel. The motion to transfer will be sustained. It is so ordered. 1. Injunction 252 (8)-Attorney's fees in effecting dissolution of injunction are ordinarily not within condition of bond to pay damage sustained in consequence of injunction. In an ordinary case of a bond on injunction, conditioned to pay any damage obligee may sustain in consequence of injunction in case it does not stand, attorney's fees for services in effecting dissolution of injunction are not within condition of bond, and hence not recoverable from obligors. 2. Injunction 252 (8)-Attorney's fees in securing dissolution of injunction in proceeding in federal court held not proper elements of damages under bond. Attorney's fees for services in securing dissolution of injunction in proceeding entirely in federal court held not proper elements of damages on bond given therein and not recoverable, even though state law allowed such fees in state courts. 3. Bankruptcy 109-Attorney's fees for securing dissolution of injunction restraining disposal of mortgaged property held not recoverable under law requiring bond for damage from "seizure of property" (Bankr. Act, § 3e, 11 USCA § 21 (e). OC Bankruptcy Act, § 3e (11 USCA § 21(e), requiring bond conditioned for damages casioned by seizure, taking, and detention of property of the alleged bankrupt, held not to authorize recovery of attorney's fees for dissolving an injunction restraining mortgagee from disposing of bankrupt's property; there being no seizure, taking, or detention of property within meaning of such section. [Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Seizure.] In Bankruptcy. In the matter of the bankruptcy of the Farmers' Union Mercantile Company. On motion by the Farmers' & Merchants' Bank of Williston, S. C., for 26 F.(2d) 102 attorney's fees on a bond executed by peti- fact that the defendant has been compelled to tioning creditors. Motion denied. Jas. A. Kennedy, of Williston, S. C., for Farmers' & Merchants' Bank of Williston, S. C. J. Waties Waring, of Charleston, S. C., for petitioning creditors and surety com pany. ERNEST F. COCHRAN, District Judge. This matter comes up upon a motion by the Farmers' & Merchants' Bank of Williston, S. C., in a summary proceeding, for judgment for attorney's fees on a bond executed by the petitioning creditors as principals and the United States Fidelity & Guaranty Company as surety. When the petitioning creditors presented their petition in involuntary bankruptcy against the bankrupt, they presented at the same time a petition setting forth in substance that the Farmers' & Merchants' Bank of Williston, S. C., was about to dispose of certain personal property of the bankrupt under a chattel mortgage, etc., and prayed for an injunction and receivership. The court issued a rule against the bank to show cause why a temporary injunction should not be issued and a receiver appointed, and also passed an order restraining the bank, pending the hearing upon the rule, from disposing of the property in question. As required by this order, the petitioning creditors and the United States Fidelity & Guaranty Company executed a bond "conditioned for the payment to the said Farmers' & Merchants' Bank of any damage this court may find that the said bank has suffered by reason of this restraining order and rule in case it should be finally held that this restraining order should not have been granted." The bank appeared by its attorney at the return day of the rule, and upon hearing the parties the court dissolved the restraining order, refused the temporary injunction, and also refused to appoint a receiver. The question now presented is whether under this bond the bank is entitled to attorney's fees for the services of its attorney in dissolving the restraining order. While a contrary rule has been adopted in some of the states, according to the great weight of authority in the state courts, counsel fees incurred in procuring the dissolution of an injunction, improperly or wrongfully issued, are recoverable as part of the damage incident to the restraint imposed, if it appears that this expense was occasioned by reason of the issuance of the injunction. The principle on which these decisions rest is the employ aid in getting rid of an unjust restriction imposed on him by the act of the plaintiff. 14 R. C. L. 486; High on Injunctions, §§ 793, 794, p. 562. In South Carolina, the rule undoubtedly is that attorney's fees should be allowed for services in procuring the dissolution of an injunction or restraining order. Livingston v. Exum, 19 S. C. 223; Hill v. Thomas, 19 S. C. 230; Moorer v. Andrews, 39 S. C. 427, 432, 17 S. E. 948; Britt v. McCormick, 117 S. C. 8, 108 S. E. 179; Chambers v. Long, 132 S. C. 179, 128 S. E. 853. Compare First Nat. Bank of Chillicothe v. McSwain, 93 S. C. 30, 75 S. E. 1106, Ann. Cas. 1914D, 809; Garlington v. Copeland, 43 S. C. 389, 392, 398, 21 S. E. 317. [1] But in the federal courts the rule is settled that in an ordinary case of a bond on injunction, conditioned to pay any damage the obligee may sustain in consequence of the injunction in case it does not stand, attorney's fees for services in effecting a dissolution of the injunction are not within the condition of the bond, and hence not recoverable from the obligors. The theory on which this rule rests is that the defendant is entitled to be indemnified only for the damage caused to him by the restraint imposed, and not for the costs of the suit, or the expenses incurred in ridding himself of the restraint. Oelrichs v. Williams, 15 Wall. 211, 21 L. Ed. 43; Tullock v. Mulvane, 184 U. S. 497, 22 S. Ct. 372, 46 L. Ed. 657; Missouri, etc., R. Co. v. Elliott, 184 U. S. 530, 22 S. Ct. 446, 46 L. Ed. 673; Lindeberg v. Howard, 146 F. 467, 77 C. C. A. 23, 8 Ann. Cas. 709; note, 16 L. R. A. (N. S.) 50, 76; 14 R. C. L. 486. [2] This rule is adhered to in the case of a bond given in the federal courts, notwithstanding the fact that, by the local law of the state in which the bond was executed, such fees could be recovered in a suit on the bond, or even though the action on the instrument is brought in a state court. Tullock v. Mulvane, supra; Missouri, etc., v. Elliott, supra; 14 R. C. L. 486. Compare Missouri Pacific Ry. Co. v. Larabee, 234 U. S. 468, 473, 34 S. Ct. 979, 58 L. Ed. 1405, 1407; Fidelity Co. v. Bucki Co., 189 U. S. 138, 23 S. Ct. 583, 47 L. Ed. 749. From what has been said, it follows that, inasmuch as this bond was given in a proceeding entirely in the federal court, attorney's fees for these services are not proper elements of damages, and cannot be allowed, even though the state law allows such attorney's fees in the state courts. [3] It is insisted, however, that attorney's |