84 F. 369 | U.S. Circuit Court for the District of Southern California | 1897
The complainant, a corporation of the state of West Virginia, brings this suit against the city of San Diego and its municipal authorities. The complainant sues as the holder and owner of a mortgage upon the water and water plant with and by which the San Diego Water Company supplies the city of San Diego and its inhabitants with water for domestic and other purposes. The city, through its municipal authorities, having established an ordinance fixing the rate at which such water should be so furnished, the object of the bill is to obtain the judgment of this court declaring such ordinance null and void upon the ground that the rates thereby established are so unreasonably low as to amount to a practical taking of the property mortgaged to the complainant without just compensation, contrary to the provisions of the constitution of the United States. The ordinance thus attacked was enacted, according to the bill, in February, 1896, and, under the provisions of the constitution of the state of California and a state statute passed pursuant thereto, it took effect July 1,1896. and expired by limitation July 1,1897, yet the demurrer to the hill now under consideration was not submitted to this court until within the last few days, to wit, November 24, 1897. The court is not advised in respect to the cause for such delay, and, as at present advised, I do not see, after disposing of the present demurrer, what need there will be for the determination of the question raised by the bill, since, under the provisions of the state constitution and state statute, pursuant to which the ordinance was enacted, its functions have long ago ceased.
It is urged in support of the demurrer to the bill, that this court is without jurisdiction, for the reason that it appears from the bill that the title to the property involved is in the San Diego Water Company, a corporation of the state of California, whose rights therein are nec
“We are met at the threshold with an objection that this is, in effect, a suit against the state of Texas, brought by a citizen of another state, and therefore, under the eleventh amendment to the constitution, beyond the jurisdiction of the federal court.”
In Mercantile Trust Co. v. Texas & P. Ry. Co., 51 Fed. 529, the. objection made to the jurisdiction of the court, as appears from the answer of the defendants Reagan, McLean, Foster, and Culberson, was that the Texas & Pacific Railway Company was a corporation created under the laws of the United States, and that its principal office and domicile was in the state of New York, thereby constituting that company a citizen of that commonwealth, of which state the complainant also was a citizen; wherefore it was claimed by the defendants other than the Texas & Pacific Company ¿‘that said complainant is not entitled to maintain its suit against the defendant railway company, because complainant and said company are citizens of the same state, and there is no real controversy between complainant and said defendant railway company, and none between them
“It is apparent from the whole record and the conduct of this hearing, that the controversy is not between complainants and the railways, but between, ihe railways and the other defendants.”
The court, therefore, conceding the citizenship of the Texas & Pacific Kailway Company to be in New York, as claimed by the other defendants, evidently concluded that, although the company was a nominal defendant, yet a proper alignment of the parties, according to their real interests, would place that company with the complainant; thus making the controversy between citizens of different states, and therefore within the jurisdiction of the court. In the present case, however, it is a mistake to suppose that the jurisdiction depends upon diverge citizenship of the parries. The bill presents a federal question, namely, the question whether the ordinance set out in the bill violates those provisions of the constitution of the United States declaring that no person shall be deprived of his property without due process of law, and securing to every person the equal protection of the laws. Reagan v. Trust Co., supra; Central Trust Co. of New York v. Citizens’ St. Ry. Co. of Indianapolis, 82 Fed. 1. That a mortgagee has such an interest in the mortgaged property as entitles him to bring suit to restrain injury thereto is, in my opinion, beyond doubt. Such right was distinctly recognized in the cases of Mercantile Trust Co. v. Texas & P. Ry. Co. and Reagan v. Trust Co., supra. The demurrer would, therefore, be overruled, but for the failure of the complainant to make the San Diego Water Company a party to the suit. Because of the absence of that indispensable party the demurrer is sustained, with leave to the complainant to amend the bill within 10 days, if it shall be so advised.