79 F. 657 | U.S. Circuit Court for the District of Southern California | 1897
The bill in this case, to which there are a large number of defendants, was filed January 6, 1896. It alleges, among other things: That on the áth day of September, 1895, the complainant was, by an order and decree of the circuit court of the United States for the district of Massachusetts, duly made and entered, appointed receiver of all of the property of the San Diego Land & Town Company, with full power to take possession of and manage, operate, and control the same, including the plant and water system in the bill mentioned; and that by an order of this court, duly made and entered September RO, 1895, the said first-mentioned order was duly confirmed as to all property of the said company situated within the jurisdiction of this court, including the said water plant and system, and that the complainant was by tlie said last-mentioned order duly appointed receiver of the said mentioned property, with full power and authority to manage and control the same,—by virtue
The prayer of the bill is that the defendants, and each of them, lie enjoined from prosecuting, in the state courts or elsewhere, separate actions against the receiver or the company growing out of the matters alleged; that the defendants, and each of them, be required to appear in this suit, and set up any claims they may have against the right of the receiver or the company to increase; die rale for water so furnished; and that it. be finally decreed by the court that the receiver and the company have the right to increase Mu' rate to any reasonable sum, and that the sum of f7 per acre per annum is a reasonable rental to be charged for irrigation; and that the defendants, and each of them, be required to pay that rate as a condition upon which water shall be; furnished them; and for such other and further relief as the nature of the case may demand.
In due time the defendants filed an answer to the bill, in which they set. up various grounds upon which they claimed that the San ‘Diego Land & Town Company and its receiver became legally and equitably bound to supply them,respectively,for all time,with water for irrigation at the rate of 83-50 per acre per annum, exceptions to winch answer, filed by the complainant, were sustained by the court for reasons given in an opinion filed at the time, and reported in Lanning v. Osborne, 76 Fed. 319. Subsequently the defendants filed an amended answer, t.o which exeoplions for insufficiency and imperiinenco were also filed by the complainant. Upon the hearing of Míese exceptions (lit; counsel for the defendants strenuously objected to the jurisdiction of the court; but, after careful consideration, I am unable to see the least ground for their contention. But for the high character of the counsel, and for the earnestness with which they press the point, I should be disposed to think it little less (han absurd to say that the subject-matter of the controversy between the complainant and the respective defendants is the sum of f3.r>0,--the mere difference between the annual rate contended for by the defendants and that to which the complainant asserts a right. The real subject of the controversy is the asserted right on the pari: of the land and town company to establish the rates at which it will furnish water to the defendants for the purpose of ii rigation, in the absence of any action on the part of the board of supervisors of the county. The establishment of that, right, denied by the defendants, is the principal object of the bill, and ii is the value of that right which constitutes the amount in controversy. Railway Co. v. Kuteman, 4 C. C. A. 503, 54 Fed. 547; Fost. Fed. Prac. § 16; Stinson v. Dousman, 20 How. 461; Railroad
“The provision of section 5 of the act of March 2, 1793, that a writ of injunction shall not be granted to stay proceedings in any court of a state, has never been held to have, and cannot properly be construed to have, any application except to proceedings commenced in a state court before tbe proeeedings are commenced in the federal court; otherwise, after suit brought in a federal court, a party defendant could, by resorting to a suit in a state court, defeat, in many ways, the effective jurisdiction and action of the federal court after it had obtained full jurisdiction of person and subject-matter. Moreover, tbe provision of the act of 1793 (now section 720, Rev. St.) must be construed in connection with the provision of section 14 of the act of September 24, 1789, that the federal courts shall have power to issue all writs which may be necessary for the exercise of their respective jurisdictions. 1 Stat. 81, 82.” Rev. St. U. S. § 716.
See, also, Dietzsch v. Huidekoper, 103 U. S. 494; French v. Hay, 22 Wall. 250; Sharon v. Terry, 36 Fed. 365.
As said by the circuit court of appeals in Railway Co. v. Kuteman, supra:
“When the United States courts acquire jurisdiction of the parties and of the subject-matter, so far as acquired, the jurisdiction is complete. ‘There is not, in our system, anything so unseemly as rivalry and contention between the courts of the state and the courts of the United States’ (Sharon v. Terry, supra); and in a case where the circuit court would have jurisdiction to enjoin a party from bringing a multiplicity of suits which he was threatening to bring in the United States courts, and should exercise that jurisdiction, it is manifest how inadequate the relief would be if the party*663 enjoined was left free to Institute proceedings on the same cause of action in a state court having concurrent jurisdiction. It seems clear to us that no such element of weakness affects the jurisdiction of the United Stales courts; that in a proper ease for injunction, of which, by reason of the subject-matter or of the citizenship of the parties, the United States courts have jurisdiction, the injunction may issue, and will be effectual to prevent the institution of a multiplicity of suits, or of any suit, in any other court: and that there is drawn to the court, otherwise properly issuing the injunction, the consideration of and jurisdiction over the whole subject-matter on account of which or out of which said suits are apprehended.”
Upon the merits, it is sufficient to say that the views expressed by this court when considering (lie exceptions to the original answer (ol the correctness of which I have no doubt), applied to the amended answer, show its insufficiency also as a defense to the bill, unless it be that an act passed at the present session of the legislature of California, and which has been called to the attention of (his court in another case pending herein, works a change in the law as already declared. That statute is said to have been signed by the governor on the 13d day of March, 1897, and to be in these words:
“An act 1» amend an act entitled ‘An act to regulate and control the .sale, rental, and distribution of appropriated water in this slate, other than in any city, city and county, or town therein, and tp secure tine rights of way for the conveyance of such wat or to the place of use,’ approved March 12, 1881, by inserting a now section therein, relating to contracts for the sale, rental, and distribution of water, and the sale or- rental of easements and servitudes of the right to the How and use of water.
“The people of the state of California, represented in the senate and assembly, do enact as follows:
“Section 1. The act entitled ‘An act to regulate and control the sale, rental., and distribution of appropriated water in this state, other than in any city, city and county, or town therein, and to secure The rights of way for the conveyance of such water to the place of use,’ approved March -twelfth, eighteen hundred and eighty-five, is hereby amended by inserting therein a new section, to be numbered section eleven and one half thereof, as follows:
"Section 11 i/j. Nothing in this act contained shall We construed to prohibit or invalidate any contract already made, or which shall hereafter he made, by or with any of the persons, companies, associations, or corporations described in section two of this act., relating to the sale, rental, or distribu lion of water, or to the sale or rental of easements and servitudes of the right to the ilo-w and use of water; nor to prohibit or -interiore with the vesting of rights under any such contract.
"Sec. 2. This act shall take effect immediately, and be in force from and after its passage.”
Upon the question ns to what extent, if at all, this late statute affects the rights of the parties to this suit, they should he heard, and upon that question the respective parties will be further heard on the merits of the case.
In the amended answer, all of the defendants, except 0. H. Rippey and M. L. Ward, having made admissions similar to those contained in the original answer in regard to their respective ownership of the lands for which the land and town company and its receiver had furnished them with water, as alleged in the bill, and i he defendants Rippoy and Ward having in the original answer admitted their respective ownership of the tracts of land now claimed t o belong to their respective wives, the counsel for the complainant,
In White v. Ewing, supra, the court said:
“Indeed, It was conceded that where an insolvent corporation is placed in the hands of a receiver of the circuit court, such appointment draws to the jurisdiction of that court the control of its assets so far as persons having claims to participate in the distribution of such assets are concerned, and that parties must go into that court in order to assert tlieir rights, prove ■their demands, and receive whatever may be due them, or their share or interest in the estate. But it is insisted that there is a distinction between cases where parties are brought before the court for the purpose of the payment to them of claims they may hold against the estate and cases where it is sought to recover of them claims which the receiver insists they owe the estate; that the receiver stands in the shoes of the company, and has no higher rights than the corporation, and, having sued for less than the jurisdictional amounts, that as to them the cases must be dismissed. This position is entirely correct, so far as the right of the receiver to recover upon the merits is concerned; but it has no bearing whatever upon the question of the jurisdiction of the court to pass upon such merits. * * * Tine court proceeds upon its own authority to collect the assets of an estate with the administration of which it is charged; and, if the receiver in such cases appears as a party to the suit, it is only because he represents the court in its inherent power to wind up the estate of air insolvent corporation over which it has by an original bill obtained jurisdiction. In this particular the jurisdiction of the circuit court does not materially differ from that of the district court in bankruptcy, the right of which to collect the assets of a bankrupt estate we do not understand ever to have been doubted. There is just as much reason for questioning the jurisdiction of the court in this case upon the ground of the want of diverse citizenship as upon the ground that the requisite amount is not involved.”
What has been said above, applied to the motion made at the time of the hearings above considered to remand the suit brought in the superior court of San Diego county by Mrs.'Rippey against the receiver and others, after the commencement of the present suit, to test the same questions, and by that court transferred to this court,- makes it proper to deny the motion. The taking possession by this court of the property of the insolvent corporation, and the subsequent suit by its officer to enforce the alleged rights of that corporation, draws to the jurisdiction of this court the entire subject-matter, which cannot be taken away or interfered with by any subsequent suit in any other court.
Orders will be entered: (1) Granting the complainant’s motion for leave to make Virginia Rippey and Ella B. Ward parties defendant; (2) denying the motion to remand to the state court the suit entitled “Virginia Rippey vs. San Diego Land and Town Company et al.”; and (3) restoring the case to the calendar for further hearing in respect to the effect upon the merits of the case of the act above referred to, passed at the present session of the legislature of California,