63 F. 213 | U.S. Circuit Court for the District of Northern California | 1894
(orally). The nature of this action has been heretofore defined by Judge HAWLEY (54 Fed. 55), in passing On the demurrer, as one to quiet title, and the facts have been so often stated that it is unnecessary to state them again.
The action is brought by the college and certain persons as bene
There is considerable controversy as to the proper interpretation of Judge HAWLEY’S opinion,—whether the right of action in Bowdoin College depended upon the refusal of Stanley and Purington to sue, or was independent of this, and was sustaiired by its interest in the execution of the trust; the defendant contending for the former, and the complainants for the latter, view. I shall assume that defendant is right, and consider the case from this standpoint. This narrows the controversy, and relieves me from the labor and embarrassment of deciding a number of points made and argued by counsel with learning and ability.
To support the jurisdiction of the court in this case, there must be a controversy between citizens of different states, and it must be conceded that the bill shows and the evidence establishes that the real interests of Bowdoin College and Stanley and Purington are identical; and defendant claims, therefore, that plaintiffs and Stanley and Purington should be arranged on one side as parties against the Merritts on the other, and when so arranged the suit is not wholly between citizens of different states. In Detroit v. Dean, 106 U. S. 537, 1 Sup. Ct. 560, Dean, who was a citizen of Hew York, and a stockholder in the Mutual Gaslight Company, a Michigan corporation, sued its directors, citizens of Michigan, and the city of Detroit. The court ordered the bill dismissed, not because Dean and the directors had identical interests, but because the refusal of the latter to sue was collusive. Against the seemingly natural inference that, if the refusal had not been collusive, jurisdiction would have been entertained, the defendant urges that the point was not raised, and the case therefore is not authority. But I do not think it reasonable to assume that the point would have escaped the vigilance and ability of the court and counsel in a case where jurisdiction was contested. Biit this case does not stand alone. It cites Hawes v. Oakland, 104 U. S. 450; and this, again, cites Dodge v. Woolsey, 18 How. 331. See, also, Davenport v. Dows, 18 Wall.
Starting with this as the law, the Inquiry is necessarily confined to the character of the refusal,—whether collusive or otherwise; that; is, as the plaintiffs’ right of action to sue depends upon the re-refusal of Stanley and Purington to sue, the question is, was it sincere,—expressing a. real resolution,—or was it feigned to give a cause; of action to plaintiffs? I cannot conceive of a more difficult proposition to prove or disprove against the declarations of the parties themselves, if they he; credible. The evidence; in (his cast; is very voluminous, and has been cited and commented on at groat length and ability by counsel. It is impossible to review It. It clearly establishes that Stanley and Purington were willing that plaintiffs should sue,—maybe, urged them lo do so; that, they are friendly to the action; secured the consent of the other parties to it; advanced trust money to plaintiffs after the suit was commenced, to purchase the interest of one of the Memtts. And a credible witness swears:
“1 mot the judge [meaning Judge Stanley] on Jackson street, and he walked up io the station,—up to the narrow-gauge station,—and we got to talking about this. In fact, 1 spoke to him about it. I said, T see, Judge, there is a suit brought by Bowdoin College;’ and he said, ‘Yes, I had that suit brought.’ And I said, ‘Wliat object could you have in bringing that suit?’ lie said, ‘I had the suit brought so as to prevent them from coming into Alameda, before a jury, to try this case.’ ”
Put this is not inconsistent with the fact firmly sworn to by ►Stanley, that he and Purington would not have brought suit in the s i a te court, which is made by Judge HAWLE Y the condition of plaintiffs’ right to sue, and of the jurisdiction of the court. Judge Stanley is a gentleman of high character, and it is not giving too much credence to his statement to believe it, against evidence which, though strong, is not inconsistent with it. Judge Stanley is supported by the testimony of Mr. Young, treasurer of the college. lie testifies that at his first interview with Judge Stanley the latter told
Defendant, however, contends that, if the plaintiff and Stanley and Purington were antagonistic when the suit was brought, the answer of the latter shows that there is now no controversy between them and plaintiffs. The answer admits the allegations of the bill, except as to the possession of one piece of land. In support of their contention, counsel cite Railroad Co. v. Ketchum, 101 U. S. 289. In this case the Pacific Railroad, a Missouri corporation, mortgaged its road and other property to Ilenry F. Vail and James D. Fish, trustees, citizens of New York, to secure a proposed issue of bonds amounting to about $4,000,000. It was a third mortgage, the property being covered by other mortgages, and contained clauses providing for foreclosure if interest should not be paid. Default was made in the payment of one of the installments of interest, and Ketchum, a citizen of New York, commenced suit, claiming to be the owner and holder of many of the bonds, in behalf of himself and other bondholders. Vail and Fish and the holders of the prior mortgages were made defendants. The latter may be omitted from consideration. As to Vail and Fish the bill alleged that:
“your orator further shows unto your honors that an application has been made by your orator, on behalf of himself and other holders of bonds secured by said mortgage, to the defendants Henry F. Vail and Henry D. Fish, to take proceedings to foreclose the aforesaid mortgage, and to protect the interest of your orator and such other holders, but that no such proceedings have been taken, and, as your orator is informed and believes, some doubt is expressed whether, under such mortgage, they have the right to institute such proceedings, or any proceedings thereunder, by reason of the nonpayment of the interest due November 1,1875, and for such reason prefer not to take such proceedings; and your orator, being apprehensive that his interest, and the interests of other holders of like bonds, may be seriously affected by delay in the institution of proceedings to foreclose said mortgage and to obtain possession of said property, has brought tljs action in his own behalf.*217 and on behalf of all others similarly situated, and holding like bonds secured by said third mortgage, and has made said Vail and Fish parties defendant herein.”
' Vail and Fish answered, admitting the allegations of the bill, and concluded as follows:
“And these defendants, as trustees of the several and varied interests of the bondholders secured by said deed of trust, submit the same to the judgment of this honorable court, that the same may bo duly provided for and .protected, and ask that they may have such relief, including an allowance for the costs and expenses herein, as to your honorable court may seem meet”
It was objected that as Vail and Fish, and certain other defendants, were citizens of the same state with Ketchum, the suit was not between citizens of different slates, and therefore not within the jurisdiction of the circuit court. Answering the objection, the court said :
“For the purposes of this appeal, we need not inquire when the circuit court first got jurisdiction of this suit. It is sufficient if it had jurisdiction when the decree appealed from was rendered.”
Then, after considering the relation of other parties to the suit, the court further said:
“This leaves only to consider the position occupied by Vail and Fish. When the suit was begun, us well as when the decree was rendered, they were trustees of the mortgage tinder which Ketchum and his co-eompla}na.nts claimed. No allegations were made against them. All that was said about them was that they doubted their right to proceed. There was no antagonism between them and Ketchum and his associates. He wanted them to proceed. They did not know that they had the legal right to do so. In the meantime he, thinking his own rights, as well as those of his associate bondholders, would he injuriously affected by delay, commenced the suit to get done just what the trustees, if they had been willing to proceed, might have done. Whatever he did was for the trustees, and in their behalf, and he really had no power to do more than they might have done if they had been so inclined. It is needless to Inquire what might have been the result If they had seen fit to dispute the right of the complainant bondholders to go on. They did not do so, hut, on the contrary, before the decree was rendered, came in, and substantially availed themselves of the suit which had boon begun, so that in the end the suit, in legal effect, became their suit. Although nominally defendants, according to the pleadings, they voluntarily, In the course of the proceedings, arranged themselves on the same side of the subject-matter of (lie action with the complainants. This they had the legal right to do. After that, clearly, tin> controversy was between citizens of one or more states on one side, and citizens of other states on the other side; and when the decree was rendered the only thing to be done was to foreclose the mortgage sued on, as between the trustees of the mortgage, acting with their beneficiaries and the railroad. Of such a suit the circuit court had jurisdiction, and its decree is consequently binding on the parties until set aside in the regular course of judicial proceedings.”
It will he observed that the court said there was no antagonism between Ketchum and his associates and Vail and Fish. They liad not refused to sue. They had only doubted their light to proceed. The case, therefore, is not like the one at bar. In the case at bar the allegation of the bill is that Stanley and Purington refused to sue, and their answer admits it. The answer does not show that their attitude or resolution had or has changed. I do not think that the plea in abatement is sustained by the evidence, and it is therefore overruled, and the motion to dismiss is denied.
