74 F. 849 | U.S. Circuit Court for the District of Southern California | 1896
This is a suit in equity, brought by the complainant, alleged to be a corporation organized and existing under the laws of the state of West Virginia, against a large number of persons alleged to be citizens and residents of the state of California, to procure a decree establishing and quieting, as against the adverse claims of the defendants, complainant’s alleged right to the waters of a certain stream called “Santiago Creek,” in Orange county, Cal., and an injunction enjoining the defendants from interfering with any of the said waters or the dams, ditches, flumes, etc., by which, the complainant alleges it diverts the waters for domestic use, irrigation, and other beneficial purposes; the complainant basing its alleged rights upon its alleged ownership of the Rancho Lo-mas de Santiago, situated in said county of Orange, containing about •18,000 acres of land, and of an adjoining tract of 12,000 acres of the Rancho Santiago de Santa Ana, through which. latter tract, it is alleged, the Santiago creek runs in its natural channel, and riparian to which, it is averred, are all the lands so alleged to be owned by complainant. The defendants Lotspeieli filed a plea to the jurisdiction of the court, averring, in substance, that the court ought not to take cognizance of the suit, for the reason that it does not really and substantially involve a suit or controversy properly within the jurisdiction of this court; that the complainant has been improperly and eollusively made such for the sole purpose of creating
The evidence shows that the allegations of the plea to the effect that James Irvine, in anticipation of the service of process upon him in the action brought by the defendants against him in the state court for Orange county, and for the purpose of avoiding process therein, fled from that county, and remained in hiding until August 17, 1894, and until after he had executed the; deed to the complainant corporation, is not true. There was no secrecy about his leaving Orange comity for his home in Ban Francisco, and at no time was there any hiding on his part for the purpose of avoiding service of process upon him in the suit brought against him by the defendants to this suit, so far as appears from the evidence. On the contrary, it appears that; for several years prior to the actual commencement of the suit by the defendants a dispute had existed between the respective parties in regard to the waters in question,, and James Irvine had frequently expressed his desire that suit should- be brought by the defendants to settle the controversy. Nevertheless, suit was not brought by them until July 19, 3894. In the meantime, James Irvine had consulted with his attorneys in respect to the controversy with the defendants, among other things. The reasons for his actions as disclosed by the evidence will he referred to hereafter. What he actually did was this: He sent one of his attorneys at law to the state of West Virginia for the purpose of causing to be organized under (he laws of that state the complainant corporation, called the Irvine Company, with the intention of conveying (o that corporation the property described in the deed.
Whatever effect, if any, the transactions attending the organization of the complainant company, and those that followed, might have in respect to the continued existence of the corporation, the" court would not be justified, I think, in view of the evidence that has been introduced, in holding that the conveyance from James Irvine to the complainant company was fictitious, and not real. Being real, and intended for what it purported to be, a conveyance of the title of the property to the corporation, the power over which was thereafter vested in a board of directors, and no reconveyance to James Irvine being contemplated, the plea must be overruled. Manufacturing Co. v. Kelly, 160 U. S. 327-336, 16 Sup. Ct. 307, and authorities there cited. An order to that effect will be entered,, with leave to the defendants to answer within the usual time.