| U.S. Circuit Court for the District of Southern Ohio | Apr 19, 1899
(after stating the facts as above). The demurrer to the amended bill first raises the question of jurisdiction. It is said, in support of it, that, in the controversy over the rights of Zohorst and the Second Rational Bank, the parties must be arranged according to their interest, to determine whether the requisite diverse citizenship exists, and, under such an arrangement, the complainant, a citizen of New York, the defendant railroad company, the mortgagor, a citizen of Ohio, are on one side, and Zohorst and the bank, both citizens of Ohio; are on the other, which makes impossible jurisdiction in a federal court. The answer to the objection is that this is a dependent and ancillary bill, of which the court gets jurisdiction because it has lawful custody of the property with respect to which the complainant seeks equitable relief, and not because there is diverse citizenship of the parties.' The complainant may make any one defendant to its bill, no matter what his citizenship, if his presence as a party is necessary to work out, in respect to the próperty held by the court, the equities to which the complainant is entitled. Compton v. Railroad Co., 31 U. S. App. 486, 531 et seq., 15 C. C. A. 397, and
The next ground is that the bill is multifarious. The rules for determining whether a bill is open to the charge of multifariousness are rather vague, and leave much to the discretion of the court. It is doubtless true that generally two different complainants may not join separate causes of action, when each has no interest in the cause of the other. It is also* true that a cause of action in favor of one in his own right is as distinct from a cause of action in favor of the same person as trustee as it is from that of a different person, and therefore that a defendant against whom a trustee attempted to unite, in the same bill, with a cause of action asserted by him as trustee, a wholly distinct cause of action, in his individual right, might object on the ground of multifariousness. In the case before us the defendant railway company might, therefore, be heard to urge this defect in the bill, because it asks for the enforcement of two different liens held in different, rights. It might insist upon the right to answer separate demands by different persons in different suits. But how does this defect injure or affect the defendants Zohorst and the Second National Bank? As to them the issue made by the complainant as trustee and in its own right is the same. They are required to meet only the question whether Zohorst had any equitable interest in the land as against the defendant railroad company; and, second, if he had none, whether the bank, without knowledge of the naked character of his legal title, changed its position on the faith of his having a beneficial interest. Upon this issue, the complainant, as trustee and1 in its own right, has precisely the same interest, and the union of the two causes of action in the bill does not embarrass Zohorst or the bank in the slightest; for, as to them, the cauces of action raise but one narrow question. The court exercises a large discretion in passing on questions of multifariousness (Brown v. Deposit Co., 128 U.S. 403" court="SCOTUS" date_filed="1888-11-19" href="https://app.midpage.ai/document/brown-v-guarantee-trust--safe-deposit-co-92343?utm_source=webapp" opinion_id="92343">128 U. S. 403, 411, 9 Sup. Ct. 127; Beach, Mod. Eq. Prac. § 115, and cases cited); and it seems to me that the consideration suggested, to wit, that the particular defendants are not injured or affected by this defect pointed out in the bill, is quite sufficient to justify me in holding that they cannot be heard to urge it by demurrer.
The next ground of the demurrer is that in a foreclosure suit the mortgagee cannot compel one claiming an interest in the property mortgaged by paramount title to try his title in the foreclosure suit. The general principle is admitted, but it does not apply here. It is conceded that Zohorst has the legal title. The only question is whether he holds as trustee for the defendant railroad company, the mortgagor. That is a question of equitable cognizance, the settlement of which is incidentally necessary to the sale of the mortgaged property clear of incumbrance or cloud. It may be settled in a foreclosure bill. In Brown v. Deposit Co., 128 U. S. 403, 9 Sup. Ct. 127, the bill was filed to foreclose a mortgage upon real estate, the legal title to a large part of which was vested in one from whom the mortgagor had agreed to buy it, and to whom all of the purchase price had not been paid. The bill sought, as ancillary relief, a decree of specific performance against the holder of the legal title upon tender of
It is further objected that it is not averred in the bill that the Lake Erie Construction Company ever conveyed its interest in the land to the Short-Line Company. While the allegation is not as specific upon this point as could be desired, it seems to me that the averment that the former company purchased the land from the latter, and paid for it, is sufficient to show, as to a mere equitable interest, that the interest passed from the vendor to the vendee.
The next ground of demurrer is that the bill does not set forth the facts upon which the relation of trustee and cestui que trust between Zohorst and the Lake Erie Construction Company arose. It is said that the averment that Zohorst was a trustee in holding the legal title is the averment of a legal conclusion. I think that this objection is well taken. The bill is in this aspect an action to declare and enforce a trust, and the facts upon which the alleged trust is asserted, whether by reason of an express declaration or by circumstances, should be set forth. Grenville-Murray v. Earl of Clarendon, L. R. 9 Eq. 11; Jackson v. Railway Co., 18 Law J. Ch. 91; Lienan v. Lincoln, 2 Duer, 672. Upon this ground the demurrer of the defendants is sustained. Upon other grounds the demurrer is overruled.The complainant will be given 20 days in which to amend its bill, by setting out the' facts upon which it claims that Zohorst had no beneficial interest in the real estate described in the amendment to the bill, and held the same as trustee for the Lake Erie Construction Company.