86 F. 818 | 6th Cir. | 1898
after stating the case, delivered the opinion of the court.
The question of jurisdiction raised must first be considered and determined. It is well settled that, if the necessary diverse citizenship exists at the time of commencement of the suit, no subsequent change of citizenship, although voluntary, will defeat the jurisdiction which once vested. Morgan’s Heirs v. Morgan, 2 Wheat. 290; Mollan v. Torrance, 9 Wheat. 537; Clarke v. Mathewson, 12 Pet. 164; Anderson v. Watt, 138 U. S. 694, 11 Sup. Ct. 449. And where the jurisdiction of the circuit court has fully attached against the tenant in possession in an action of ejectment, substitution of the landlord as defendant will not affect the jurisdiction, although he may be a citizen of the same state with plaintiff. Hardenbergh v. Ray, 151 U. S. 112, 14 Sup. Ct. 305. The primarily interested and indispensable parties to the original bill were the appel-lees and appellant. There can be no doubt that there was jurisdiction over the hill so far as the trustees as complainants and the mortgagor company as defendant were concerned; and, if all other parties had been omitted, the jurisdiction would have been too clear to admit of question. The presence of the other parties, and the relief sought against them, constituted an impediment to the exer
In Conolly v. Taylor, 2 Pet. 556, bill was filed in the circuit court of the United States for the district of Kentucky by aliens and a citizen of Pennsylvania against citizens of Kentucky and a citizen of Ohio, on whom process was served in Ohio. As between the citizen of Pennsylvania and of Ohio, neither of them being a citizen of the state in which the suit was brought, the court could exercise no jurisdiction, though its jurisdiction as between the alien plaintiffs and the defendants could not be questioned. Before the cause was heard, the name of the citizen plaintiff was struck out of the bill, and the question was whether the original defect was cured by this change, and whether the court could proceed to a final decree with the parties then left in the case. The defendant contended by way of argument that, if an alien becomes a citizen pending the suit, jurisdiction is not devested by this circumstance, and so, if one citizen sued another citizen of the same state, jurisdiction could not be given to the court by the citizen who brought the suit removing and becoming a citizen of a different state; and in reply to this contention Mr. Chief Justice Marshall, delivering the judgment of the court, said:
“This is true, hut the court does not understand the principle to be applicable to the case at bar.” “Whore there is no change of party, a jurisdiction depending on the condition of the party is governed by that condition as it was, at the commencement of the suit. The court, in the first case, had complete original jurisdiction; in the last it had no jurisdiction, either in form or substance. But, if an alien should sue a citizen, and should omit to state the character of the parties in the bill, though the court could not exercise its jurisdiction while this defect in the bill remained, yet it might as is every day’s practice, be corrected at any time before the hearing, and the court would not hesitate to decree in the cause. So in this case. The substantial parties plaintiffs — those for whose benefit the decree is sought — are aliens, and the court has original jurisdiction between them and all the defendants. But they prevented the exercise of this jurisdiction by uniting with themselves a' person between whom and one of the defendants the court cannot take jurisdiction. Strike out his name as a complainant, and the impediment is removed to the exercise of that original jurisdiction which the court possessed between the alien plaintiffs and all the citizen defendants. We can perceive no objection, founded in convenience or in law, to this course.”
The principle declared in this case was reaffirmed and applied in Vattier v. Hinde, 7 Pet. 252, in which the bill had been dismissed as to a defendant and the jurisdictional defect cured. In this case Mr. Chief Justice Marshall said:
“It is impossible to draw a distinction, so far as respects jurisdiction, between striking out the name of a plaintiff and of a defendant. The citizen of Ohio may have been a more necessary party in the cause than the citizen of Pennsylvania. Had it been otherwise, the same principle which sustained the one alteration would have sustained the other.”
See, also, Carneal v. Banks, 10 Wheat. 181.
“The objection to the jurisdiction of the court that two of the defendants were residents of Texas, the same state with the complainants, was met and obviated by the dismissal of the suit as to them. They were not indispensable parties; that is, tlieir interests were not so interwoven and bound up with those of the complainants or oilier parties that no decree could be made without necessarily affecting them. And it was only the presence of parties thus situated which was essential to the jurisdiction of the court. The rights of the parties, other than the defendants who were citizens of Texas, could be, and were, adequately and fully determined without prejudice to the interests of those defendants. And the question always is, or should be, when objection is taken to the jurisdiction of the court by reason of the citizenship of some of the parties, whether to a decree authorized by the case presented they are indispensable parties, for, if tlieir interests are severable, and a decree without prejudice to tlieir rights can be ma.de, the jurisdiction of the court should be retained, and the suit dismissed as to them.” Horn v. Lockhart, 17 Wall. 570.
It is very clear, therefore, that the circuit court properly allowed the amendment, and that the amendment, when made, related to the commencement of the suit, for otherwise the amendment would be ineffectual to remove the impediment, and would, as was justly observed by the learned circuit judge, be without meaning. This must he so, for it is well settled in these and other cases that jurisdiction depends upon the state of things at the time the suit is brought.
In Anderson v. Watt, 138 U. S. 707, 11 Sup. Ct. 449, the supreme court, referring to the previous case of Conolly v. Taylor, said:
“This court held that jurisdiction depended upon the state of the parties at the commencement of the suit', which no subsequent change could give or take away; that, if an alien became a citizen pending the suit, the jurisdiction which was once vested would not be devested; and, so, if a citizen sued a citizen of the same state, he could not give jurisdiction by removing and becoming a citizen of a, different state; but that, just as the omission to state the character of parties might be corrected at any time before hearing, so by an amendment made by striking out the person whose presence as a complainant prevented the exercise of the jurisdiction, the impediment could be properly removed.”
The principle on which the decisions proceed is that, when jurisdiction vests at the commencement of the suit over the indispensable parties to a decree, but the exercise of jurisdiction is prevented by the presence of other proper and material parties, the names of such other parties may be stricken out, and the objection to the exercise of jurisdiction thereby obviated. See Sioux City Terminal R. & W. Co. v. Trust Co. of North America, 27 C. C. A. 73, 82 Fed. 124.
“In a decree for the foreclosure of a mortgage the two parties principally and primarily interested are the mortgagee and the mortgagor.”
And, as has been observed, neither prior nor subsequent lien-holders are necessary parties to such a bill where the relief sought does not go beyond foreclosure against the mortgagor. Wabash, St. L. & P. Ry. Co. v. Central Trust Co. of New York, 23 Fed. 513; Jerome v. McCarter, 94 U. S. 734; Howard v. Railway Co., 101 U. S. 837; 1 Fost. Fed. Prac. § 52; 1 Beach, Mod. Eq. Prac. § 74. And where the court, at the commencement of the suit, has jurisdiction by reason of the citizenship of the parties, this jurisdiction is not,' as a rule, affected by amendments relating to the cause of action.
In Green v. Custard, 23 How. 484, suit had been instituted in the state court by Custard, a citizen of Texas, against Green, a citizen of Massachusetts, to recover a balance due on a judgment. The suit was by attachment. The case was, on Green’s application, removed into the district court of the United States. After removal, Custard, by amendment, as the court said, “set forth an entirely new cause of action,” basing the right to recover on a note. The court thereupon remanded the case upon the ground that the amendment made a case within the proviso to the eleventh section of the original judiciary act, restricting the jurisdiction of the United States courts. On writ of error the judgment was reversed. The principle deducible from this case is that, where the circuit court of the United States has jurisdiction over the parties and cause of action when the suit is brought, the jurisdiction is not affected or defeated by any amendment of the pleadings changing the cause of action. But the contention by the defendant that the amended bill was the commencement of a new suit is entirely untenable. This is already sufficiently apparent from what we have said of this amendment and the character of the suit as left by the amendment. All the features of the suit as an ordinary foreclosure bill remained just the same as when the suit was first instituted, and with the mortgagees and mortgagor as the only parties. The amendment only eliminated from the case parties not necessary to the foreclosure suit with the relief sought against them. And what has been thus said in regard to the amended bill is applicable to the second amendment, by which the defendant Gordon was brought in for the purpose of having his rights settled in this suit. It is clear that Gordon might have been joined with the mortgagor company as a defendant to the original bill, and jurisdiction over the.suit as between the trustees as complainants and the appellant and Gordon as defendants would have been entirely clear. The purpose and effect of the amendment bringing in Gordon were to enable the court to give to the purchaser a perfect title, and this amendment was strictly in aid of the proper purpose of the original bill, and to obtain full relief thereunder.
We are thus brought to the merits of the case, which do not seem to require extended discussion. A question presented by the assignments of error is whether or not the real ownership of bonds held by Charles E. Brigel was in him or his father, Leo Brigel, one of the trustees in the mortgage. The contention of the appellant in the court below and here was and is that these bonds were bought by, and in fact belonged to, Leo Brigel, the trustee, and that they were purchased in the name of the son fraudulently, and for the purpose of covering up the real ownership thereof. Leo and Charles E. Brigel testify that the bonds belonged to the son, and not to the father, and in this they are supported by other circumstances not necessary to be detailed. The defendant relied mainly on circumstantial evidence to show that in fact the bonds were the property- of the father, and not the son. The relationship, lack of sufficient means in the son with which to make the purchase, the part taken by the father in bringing about the purchases and in going the son’s security for payment, a.nd other circumstances, are relied on. The case was referred to a special master for the purpose of a full report as to all debts against the company, and also Avith direction to report the outstanding bonds secured by the mortgage, the amounts of these bonds, and by whom held and owned. The special master reported these bonds as belonging to Charles Brigel, and on exception duly taken the circuit judge concurred with the special master in this finding of fact. Under such circumstances, in the absence of very cogent evidence of a mistake of fact, or of some error of law, this finding of fact by the master, concurred in bv the circuit court, must be accepted by this court as final. Belknap v. Trust Co., 47 U. S. App. 663, 26 C. C. A. 30, and 80 Fed. 624; Emil Kiewert Co. v. Juneau, 47 U. S. App. 395, 24 C. C. A. 294. and 78 Fed. 708; Turley v. Turley, 85 Train. 251, 1 S. W. 891; Davis v. Schwartz, 155 U. S. 631, 15 Sup. Ct. 237; Crawford v. Neal, 144 U. S. 585, 12 Sup. Ct. 759. It is only necessary to say that au examination of this record fails to disclose any such state of proof as Avould warrant us in disagreeing with the conclusion thus reached by the master and the circuit court. This conclusion that Charles É. Brigel, and not Leo, is the real owner of the bonds, renders it unnecessary for us to consider or determine to what .extent and with what rights as between himself and the mortgagor company Leo Brigel might purchase bonds secured by the mortgage because? of his trust relation to the mortgagor company.
Another contention by the defendant is that by a certain contract dated September 21, 1891, signed by the appellant company, Leo A. Brigel, and Thomas F. Hargis, the right to foreclose the present mortgage was suspended. The position is that Leo Brigel agreed that out of the proceeds to be collected under suits contemplated by that .contract the bonds were to he first satisfied, and that Brigel, having failed and refused to carry out the contract, cannot insist on foreclosure for the satisfaction of the bonds. A complete
Another objection made is to the judgment recovered in the Martin circuit court by Leo Brigel against appellant for $5,057. This objection was properly overruled by the special master and the circuit judge. The defendant company suffered the judgment to be taken in the name of Leo A. Brigel, and the legal title to the judgment and the right to recover are clearly in Brigel; and whether or not, as between Brigel and any third party, the beneficial interest in the judgment belongs in equity to such party, is a question with which we are not concerned here. This view renders it immaterial to inquire how far this objection was waived by the finding of the court as to what judgments there were, and the owners of such judgments, which finding is recited as having been made “with the consent: of all parties.” This review of the case disposes of all of the objections chiefly x-elied on by the defendant for a reversal of the decree. The circuit court properly construed the mandate of this court in relation to the disposition to be made of the costs of the cause in the court below. When complainants so amended their hill as to remove the jurisdictional objection, and make a case proper for the court to proceed with, the general costs of the cause in the court below were left to be adjudged by the court on final hearing, just as costs in the ordinary case. We find no error in the action of the court below, and the decree is accordingly affirmed.