38 F. 213 | U.S. Circuit Court for the District of Kansas | 1889
This case comes on for hearing upon tbe cross-bill of tbe Atchison Havings Bank, and the plea and answer thereto of T. J. Tempter. The proceedings leading up to this issue are briefly as follows: In September, 1880, D. M. Jarboe and James Smith, copartners as D. M. Jarboe & Co., citizens of Missouri, commenced their suit in tbe district court of Atchison county against T. J. Tempter and B. F. Johnson, co-partners as T. J. Tempter & Co., also citizens of Missouri, to enforce a mechanic’s lien on elevator property situate in said county. To this suit were made also defendants Richard A-. Park, cashier of said savings bank, the Central Branch Union Pacific Railroad Company., an;d other
The matter of the claims of Kellogg and the savings bank was referred to a special master to take testimony, and report the amounts due, and determine the question of priority. In accordance with the master’s report, -a final decree was made at the June term, 1881, in which it was found there was due Kellogg $14,806.95, and that it was a first lien on the property; and to the savings bank the sum of $10,525.44, which
The defendant again presses his objections to the jurisdiction of the court to render any decree in the cause, and also to render a personal judgment against the defendants. Although the last objection has been before considered and overruled, I will briefly give my views on this question again. The court had acquired jurisdiction, by proper proceedings of removal from the state court, which is not questioned. It had taken possession of the property by its receiver, and ordered it sold, and the proceeds were in court. All parties who had ariy interest in or claims
• This brings us to the next question affecting jurisdiction. The separable controversy between Jarboe & Co. and the railroad company, for which the cause had been removed, had become, by Kellogg’s purchase of the claim, not another or different controversy, but a controversy in which a different party, and’ a citizen of the same state with the adverse party, had become the party in interest. ' Leaving out of consideration the controversy remaining in the case between the bank and Kellogg, citizens of Kansas, on the one side, and the principal debtors, Templer and Johnson, citizens of Missouri, on the other, let us consider whether the tran'sfer of Jarboe’s interest to Kellogg ousted the jurisdiction of the court, in Dunn v. Clarke, 8 Pet. 2, a judgment in ejectment had been recovered by Graham, a citizen of Virginia, against .Clarke, a citizen of Ohio. Graham died, and Dunn, a citizen of Ohio, held the land under the will of the'deceased. Clarke filed his bill against Dunn in the United States circuit court of Ohio, pra3riug for an injunction against the enforcing of said judgment, and for a decree for the conveyance of the land to complainant. Here both parties were citizens of Ohio, but the court held'that Dunn being the representative of Graham, the court had jurisdiction; “that no-change in the residence or condition of the parties can take away a jurisdiction once!1 attached.”' If, however, new parties nut privies to the suit were brought in, over whom the court'had'no jurisdiction,- it could proceed no further with the case. In Clarke v. Mathewson, 12 Pet. 170, Wetmore, a citizen of Connecticut, sued Mathewson, a citizen- of Rhode Island, in the' last-named state. Wetmore
The parties to the original bill were citizens of different states, and the jurisdiction of the court completely attached to the controversy. Having so attached, it could not be divested by any subsequent events, and the court had a rightful authority to proceed to a final determination of it. If after the commencement of the suit the original plaintiff had removed into and become a citizen of Rhode Island, the jurisdiction over the cause would not have been divested by such change of domicile.”
This seems to be directly in point on the question in controversy in this case. To the same effect see Morgan's Heirs v. Morgan, 2 Wheat. 290. “The jurisdiction depends upon the state of things at the time the action was brought, and after it is once vested it cannot be divested by a subsequent change of residence of either of the parties.” Mollan v. Torrance, 9 Wheat. 537 See Phelps v. Oaks, 117 U. S. 236, 6 Sup. Ct. Rep. 714; Stewart v. Dunham, 115 U. S. 61, 5 Sup. Ct. Rep. 1163; Gibson v. Bruce, 108 U. S. 563, 2 Sup. Ct. Rep. 873. In the last-named case the court decide that a state court cannot he deprived of its jurisdiction by change of citizenship after the suit was commenced. If a change of domicile, making both parties citizens of the same state, would not divest jurisdiction, it is useless to argue that a transfer of the subject of litigation, producing the same result, would affect the jurisdiction. The issue between the Jarboe claim and the railroad claim still remained; and parties coming into the suit as privies or representatives of interest already involved, in general take such interest as it then exists, subject to its abilities and disabilities. Cable v. Ellis, 110 U. S. 389, 4 Sup. Ct. Rep. 85; Railway Co. v. Shirley, 111 U. S. 358, 4 Sup. Ct. Rep. 472; Stewart v. Dunham, supra; Phelps v. Oaks, supra.
Passing from this question, we come to the merits of the controversy between the parties. The complainant the Atchison Savings Bank, in brief, charges in its cross-hill that it is a corporation organized under the laws of Kansas, and that T. J. Templer and B. P. Johnson were co-partners under the name and firm of T. J. Templer & Co.; that said Templer & Co., in March, 1880, leased a piece of land of the Central Branch Railroad Company for the period of 10 years, and erected a grain elevator thereon; that at various times from March to Juno of said year the complainant loaned to Templer & Co. different sums of money for the purpose of building said elevator, and other purposes of the firm, amounting in the aggregate to the sum of $8,500; that on the 31st day of May, in order to secure the bank for the money so loaned, Templer & Co. assigned and transferred its said lease, together with all the improvements on the said premises, to R. A. Park, cashier of said bank, in trust for tlie bank, which assignment reads as follows:
*218 “Atchison, Kansas, May 31, 1880.
• “In consideration of sixteen thousand dollars to us in hand paid, we do hereby sell, transfer, and assign to Richard A. Park all our interest, right, and title to the within lease, and all the buildings, fixtures, machinery, lumber, and property of every kind and description contained and upon the lots herein described or belonging or relating to the improvements being erected thereon, T. J. Templer & Co. ”
Complainant further alleges that there is due it from Templer & Co. the further sum of $1,375.16, for money by it expended after the said transfer in and about the completion of said elevator, and for taxes, insurance, and other expenses connected with the care of the property. The defendant Templer, in his answer, admits the incorporation of the bank, the partnership of Templer and Johnson, the making of the lease with the railroad company, and the assignment thereof to R. A. Park, cashier, and the loan by the bank of $8,500 to Templer & Co.; but he expressly denies that the lease was assigned and transferred to Park, cashier, for the purpose of security for the bank debt, but was transferred and accepted as a complete sale, and in full satisfaction of the debt. He denies that the bank, or Park, cashier, with the consent of Templer & Co., expended money in the completion of the elevator, or for taxes, insurance, or other purposes to the amount of $1,875.16, or any other sum; and denies that he is indebted to the bank in any sum whatever. He goes on further to allege that there was a private agreement between Park and Johnson by which Johnson was individually to have the right to redeem or repurchase for his individual benefit the property by paying the bank debt and 10 per cent, interest.
It will be seen that the main controversy between the parties is concerning the nature, intent, and purpose of the transfer of the lease and elevator property to Park, cashier of the bank; the bank claiming that the transfer was made merely as security for its debt, while the defendant claims it was made as an absolute sale, and was accepted as an absolute payment and extinguishment of the bank’s debt. It appears that the debt of Templer & Co. was kept on the books of the bank as an open account. The defendants were permitted to check on the bank for money as they niight require it in their business. This money was used by the firm in the business of constructing the elevator, buying machinery and other material for the same, and also' in the buying and shipping of grain, etc. On the 31st of May, Templer & Co., being financially involved and about to fail, desired to pay or secure the bank in preference to some other creditors, and for that purpose made the transfer of the lease and elevator property to said Park in trust for the bank. It appears that neither Park nor any other officer of the bank was aware of the failing condition of Templer & Co. until about two or three hours before the transfer was made, and the information came to Park in the following manner: He was called out of his bed on Monday morning, May 31st, between the hours of 12 and 3 o’clock, by Mr. Draper, bookkeeper of Templer & Co., to meet Johnson and Draper at the office of Mills & Wells, Johnson’s attorneys. Park was then informed of the
In regard to the intent of the parties in making the transfer of the property, the testimony of the witnesses present at the time is quite evenly divided. Park and Draper testify it was made as security only, while Johnson and Corry testify it was an absolute sale. We are compelled to look to all the circumstances, as well as the testimony of the witnesses, to solve this question. If it was an absolute sale, Templer and Johnson had no further interest in the property, and certainly would spend no more of their money in completing the work. Nor is it altogether probable that Park, on so short a notice, without any opportunity to consult with the other officers of the bank, and without any ppsitive information of the amount of mechanics’ or other liens on the property, would have taken the responsibility of buying the property subject to all claims against it, and canceling the debt of the bank. Cashiers of banks
In reference to the charge of $1',375.16, there are some items in it that may well be questioned. In the absence of any .authority from the assignors, the custodian of the property would be limited to such expenses as were proper and necessary in the care and preservation of the property. There was such consent to the completion of the building, paying for labor, material, etc. The custodian ivas justified in keeping the property insured, and paying the táxes, but in this account are the items of $315 for insurance, and several hundred dollars for watchmen for the property. This being an extraordinary expense, thé cashier should have obtained the consent of the owners before making it. With this charge stricken out, the complainant is entitled to a decree and judgment for the amount of its claim, and it is so ordered.