45 F.2d 643 | D. Idaho | 1930
The commissioner of reclamation of the state of Idaho brings this suit upon the contention that, as trustee authorized and empowered by the laws of the state to deal with Carey Act projects, it is his dnty to administer the trust imposed by the Carey Act and to secure from a court of equity advice and direction in the- administration of the trust, so that the relation of the defendants to the Carey Act lands and water rights involved may be determined and their rights protected. The purpose of the suit thus urged by the commissioner is challenged by certain of the defendants, who have moved to dismiss the bill upon the grounds that the court has no jurisdiction of the subject-matter; that neither the real party in interest, nor the proper party, has brought the suit; that the bill is multifarious, does not state facts entitling plaiutiff to equitable relief, and a misjoinder of parties defendant appears.
The scope of the hill is that about 15,000 acres of desert land, situated in the Little Lost River country in Idaho-, was segregated from the public domain and made available for reclamation and entry under the Carey Act, an act of Congress (43 USCA §§ 641-648), and the laws of the state. The Blaine County Irrigation Company, the predecessor in interest of the defendant Blaine County Investment Company, entered into a contract with the state in which it agreed to con* struct an irrigation system for the irrigation of the lands segregated, and incorporated the defendant Blaine County Canal Company, an operating company, in which stock was sold to various settlers on the tract, representing their right to the use and ultimate ownership of water. When the tract was thrown open for entry by the state the irrigation company entered into contracts with the settlers for the sale of water rights to be represented by the stock in the canal company. Some time in 1916 the canal company became insolvent and was unable to complete the system, and its .affairs were taken over by the investment company. In 1917 a supplemental contract was entered into by the canal company and the state, in which the canal company agreed to construct the Dry Creek reservoir to make available a sufficient amount of water to supply purchasers of the shares of stock in that company. The investment company in 1916 executed and delivered to the defendants Columbia Trust Company and Frank B. Cook, trustees, a mortgage or deed of trust on the equity or interest of the investment company in the settlers’ contracts, securing the payment of $175,000. Further it appears that the investment company, the irrigation company and all others deiivihg rights through these companies, have failed to comply with any of the contracts with the state, or with
It is obvious from the bill that a perplexing situation confronts the plaintiff as a trustee, and which has raised in his inind a doubt and uncertainty as to bow to discharge his duties. Under such circumstances, he has not only the privilege, but it is his duty, to seek and obtain instructions and directions from the court. This principle is clearly recognized in 2 Perry on Trusts and Trustees (6th Ed.) § 476a, also 928, where it is said: “As trustees hold the legal title for the benefit of third persons, and as the law forbids them from making any profit to themselves from their management of, or dealing with, the trust fund, so the law protects them from loss if they act according to law in good faith. And in all cases of doubt as to what the law is, and what their conduct ought to bo under it, they are entitled to instruction and direction from the court.” 39 Qye. 317; Laughlin v. Griswold, 1691 Wis. 50, 173 N. W. 755.
The next question is that jurisdiction is not vested in this court to determine the matters disclosed by tho bill, for tile reasons that a diversity of citizenship does not exist, and the case is not one arising under the Constitution or laws of the United States; that jurisdiction of the state court has first attached to the subject-matter of the action, and the federal court, under tho principle of comity, should suspend all proceeding's until the suit pending in tho state court has been disposed of.
Tho basic question in this litigation is the relation of the parties to and under the act of Congress, known as tho Carey Aet, which authorized the Secretary of the Interior to contract with the state of Idaho for the reclamation of arid public lands of the United States, and for the settlement thereof by actual settlers. 43 USCA §§ 643.-648. The Secretary of the Interior, pursuant to the act, adopted certain regulations for the reclamation, settlement, and entry of public lands, and prescribed the form of contract
The further contention is made that, as the state court has first assumed jurisdiction of the subject-matter of the cause, by reason of an action pending there, and a receiver of the investment company having been appointed, this court has no jurisdiction under the rale of comity between courts of concurrent jurisdiction, which requires that the court which first obtained jurisdiction should retain it to the exclusion of subsequent jurisdiction of other courts. Of course the rule of comity, universally understood and adhered to by both federal and state courts, is that, where two actions between the same parties on the same subject, to test the same rights, are brought in different courts having concurrent jurisdiction, the court which first acquired jurisdiction retains it to the end of the litigation. Heidritter v. Elizabeth Oil-Cloth Co., 112 U. S. 294, 5 S. Ct. 135, 28 L. Ed. 729; Pitt v. Rodgers et al. (C. C. A.) 104 F. 387. As appears from the bill, the nature of the suit pending in the state court is one for the foreclosure of the mortgage which does not include the canal and irrigation system and water rights, and that the mortgage is a lien only “upon the equity or interest of the investment com‘pany in the settlers’ 'contracts pledged by the investment company with the trustees as security for the payment of said lands.” The Carey Act and the statutes of the state do not grant to the construction company a lien upon either the water rights or lands or -in
It is further urged that, as the suit is brought by the commissioner of reclamation of the state, the proper party plaintiff' does not appear, as the state acts as trustee, and not the commissioner of reclamation, for the federal government and the settler’s. Under article 4, section 3, of the Federal Constitution, 'Congress has power to determine the maimer of disposing of the public lands. Kean v. Calumet Canal & Improvement Co., 190 U. S. 466, 23 S. Ct. 651, 47 L. Ed. 1134, The Carey Act authorizes tho segregation of the lands to the state, and vests in the state authority to provide for their settlement and reclamation, and it is made the agency through which the lands might be reclaimed under the terms prescribed by Congress. Twin Falls Salmon River Land & Water Co. v. Caldwell (9 C. C. A.) 242 F. 177, 183; Idaho Irrigation Co. v. Gooding (C. C. A.) 285 F. 453; State of Idaho v. Twin Falls-Salmon River Land & Water Co. et al., 30 Idaho, 41, 166 P. 220; Bothwell v. Bingham County, 24 Idaho, 125, 132 P. 972. In carrying out. this authority, the state of Idaho has, by sections 350, 250, 252, 2996, and 2997, of its statutes, prescribed the procedure, and vested in the commissioner of reclamation of the department of reclamation of the state authority to administer the trust imposed by the federal statutes, as we find that section 350 provides: “The department of reclamation shall have power: * * ~ 2. To exercise tho rights, powers and duties vested by law in the state board of land commissioners (so far as their duties relate to the administration of the Carey act).” The Supreme Court of the state, in tho case of Logan et al. v. Carter, Commissioner of Reclamation, et. al. (Idaho) 288 P. 424, 425, held that, “by C. S. § 350, the department of reclamation succeeded to and is vested with the rights, powers, asd duties of the state board of land commissioners in relation to tho administration of the Carey Act.” Attention is called to section 3033 of tho state statutes, which provides that all suits brought by the department of reclamation, under the provisions of that chapter, shall bo instituted in the name of the people of the state. The present suit is not one brought under the chapter, but one under the general jurisdiction of a court of equity by reason of the federal statutes, and such a suit may be brought by the officer necessary to the proper and faithful performance of his duties. Southern Ry. Co. v. North Carolina R. Co. (C. C.) 81 F. 505. Unless prohibited by statute, a public officer has an implied authority, as incident to his office, to bring all suits which the proper discharge of his official duties require. Troop on Public Officers, § 544. Section 250 of the stale statutes provides that the supreme executive power of the state shall be exercised through certain departments, including the department of reclamation, and by section 252 of the statutes it is provided further that “each depart - ment shall have an officer at its head who shall be known as a commissioner, who shall, subject to the provisions of this chapter, execute the powers and discharge the duties vested by law in his department.” It is thus clear from the provisions of the state statute that the commissioner of reclamation is the official charged with the duties and responsibilities of administering the trusteeship under consideration,
With respect to the general question that sufficient facts are not stated in the bill to entitle plaintiff: to equitable relief, that the suit is barred by laches and the statute of limitations, and that plaintiff: has an adequate remedy at law, it is sufficient to repeat that the bill recites facts sufficient to authorize the plaintiff trustee to come into a federal court of equity and seek advice and direction as to what course he should pursue in the administration of the trust, and, when seeking such advice and direction, he has called upon the court to determine certain disputes existing between the defendants as to their rights, and, when a court of equity has acquired jurisdiction relative to the establishment and enforcement of such a trust and giving advice and instructions to the trusiee, it will retain jurisdiction to' afford full relief in regard to the preservation of the trust property, and the rights of all parties concerned. The relief here sought cannot be obtained in one action at law, as it is grantable by a court of equity and not by a court of law, and, even so, tho jurisdiction
As to the charge of multifariousness and misjoinder, which is based upon the ground that Equity Rule 26 (28 USCA § 723) provides that, “if there be more than one defendant, the liability must be one asserted against all of the material defendants, or sufficient grounds must appear for uniting the causes of action in order to promote the convenient administration of justice,” and that the liability which the bill complains of was not one which is asserted against all of the material defendants. It will be noticed that the bill alleges that the defendants include all persons that have any right, title or interest in or to the irrigation system, Water rights, shares of stock in the operating company, and lands for whieh_ water has been purchased. The new rule has liberalized the former strict rules regarding multifariousness of pleadings and misjoinder, as interpreted by the federal courts, so that the entire matter which presents a common .point of litigation may be determined in a plenary suit where all the rights of the parties may be settled and thereby preventing needless 'multiplicity of suits and inconvenience. 3 Cye. of1 Fed. Procedure, pp. 511 to 530. Where causes of action at law are intermingled with causes of action in equity, they are triable in a court of equity under the new rule. In the present suit each defendant has an interest in the essential matters involved as the legal problems arising from the shortage of water, and a construction of the Carey Act and of the contracts are alleged in the bill. All of the defendants are effectively tied together by these contracts, and are interested in them, and in an interpretation of the Carey Act, which brings the case under the principle thus stated. Schell v. Leander Clark College (C. C. A. 8) 2 F.(2d) 17; Commodore’s Point Terminal Co. v. Hudnall (D. C.) 283 F. 150;’ Commonwealth Trust Co. v. Mack Smith, 266 U. S. 152, 45 S. Ct. 26, 69 L. Ed. 219. The plaintiff, as trustee, by bringing this action, has taken a course which will afford all parties interested an opportunity to have their rights determined by the court before any action is taken that may be detrimental to their rights, and will prevent a multiplicity of suits and expense to those interested.
The further thought with reference to the accounting is a matter incidental to the main purpose of the bill, and, where jurisdiction has once been obtained by a court of equity, it will hear and determine the entire controversy and dispose of incidental matters. This principle is recognized and stated to be in 3 Cye.-of Fed. Procedure, at page 525: “The demand of relief purely incidental to the main object of the bill does not render it multifarious, as where an accounting asked for is incidental to specific performance, or where a bill to subject to the payment of a judgment an equity in certain real property seeks incidental relief by way of cancellation of a release of the judgment. This is not truly a joinder of another cause, being an extension of the relief to completeness.” Ross v. Miller (C. C. A.) 252 F. 697; Brown v. Guaranty Trust & Safe-Deposit Co., 128 U. S 413, 9 S. Ct. 127, 32 L. Ed. 468.
The motions of the defendants to dismiss will be denied.