America Land Co. v. City of Keene

• Decision Date: 05 June 1930
• Docket Number: No. 2444.,2444.
• Citation: 41 F.2d 484
• Parties: AMERICA LAND CO. v. CITY OF KEENE.
• Court: U.S. Court of Appeals — First Circuit

41 F.2d 484 (1930)

AMERICA LAND CO. v. CITY OF KEENE.

No. 2444.

Circuit Court of Appeals, First Circuit.

June 5, 1930.

Percy W. Gardner, of Providence, R. I. (Jonathan Piper of Demond, Woodworth, Sulloway & Rogers, of Concord, N. H., on the brief), for appellant.

Robert P. Bingham, of Manchester, N. H. (Henry C. Arwe, of Keene, N. H., and De Witt C. Howe, of Manchester, N. H., on the brief), for appellee.

Before ANDERSON and WILSON, Circuit Judges, and HALE, District Judge.

WILSON, Circuit Judge.

A suit in equity was brought by the complainant to enjoin the enforcement of a so-called zoning ordinance adopted by the defendant city and to have the same declared invalid, and as an alternative relief, on the ground of bad faith in passing the ordinance, rescission of a deed for the conveyance of a tract of land to the plaintiff by the defendant, and, according to a special prayer in the bill also, to compel the defendant to repurchase the land and compensate the complainant in damages.

The bill as drawn was based in part on the unconstitutionality of the ordinance and in part on the ground that the city sold the land to the plaintiff with the assurance that it was fit for residential purposes, and later, by the passage of the ordinance, which classified the land in an "Unrestricted District," as it was termed, in which no dwelling houses could be erected without the consent of an adjustment board, created under the ordinance for the adjustment of questions arising thereunder, the salable value of said land for residential purposes was destroyed.

In the course of the hearing the plaintiff confined its testimony in the main to showing that the land was fit for residential purposes, or at least as suitable as other land nearby, which was given a different classification under the ordinance, as bearing on its constitutionality, while the defendant city introduced evidence of the unfitness of the land for residential purposes because of its location and subjection to flooding at certain periods of the year and not being susceptible of good drainage, as bearing on its proper classification under the ordinance. It was upon these issues the case was tried below.

Upon the court below holding that the ordinance was a proper exercise of the police powers of the city, vested in it by the state for the purpose, and that the city acting in its corporate capacity could not be divested of that power by a deed or by any representations as to the suitability of the land conveyed for any particular purpose, and there was therefore no justiciable ground for relief in equity alleged in the bill, and upon the court ordering the bill dismissed, the plaintiff then offered an amendment, alleging fraud in withholding from the plaintiff at the time of the sale the knowledge of the land being unfit for residential purposes, which amendment the court refused on the ground that it was unnecessary and improper at the stage of the case at which it was offered. The bill as a whole, if the amendment were allowed, still seeks relief on the ground of an improper exercise of the police powers in enacting the zoning ordinance.

The allowance of an amendment after hearing and the filing of a decision disposing of the case, while permissible under rule 19 of the Equity Rules (28 USCA § 723), and under the New Hampshire practice, is a matter within the discretion of the court. Whitaker v. Whitaker Iron Co. (D. C.) 238 F. 980, 981; Radio Corp. v. Emerson (C. C. A.) 296 F. 51, 56; Noble v. Portsmouth, 67 N. H. 183, 30 A. 419; State v. Collins, 68 N. H. 46, 36 A. 550; Lawson v. Kimball, 68 N. H. 549, 38 A. 380. There was no abuse of discretion in disallowing the amendment in this case. It either added nothing as a basis for equitable relief or it could avail the plaintiff only as a new cause of action, and was not consonant with the original bill. Shields v. Barrow, 17 How. 130, 15 L. Ed. 158; West v. Smith, 101 U. S. 263, 265, 25 L. Ed. 809; Hardin v. Boyd, 113 U. S. 756, 5 S. Ct. 771, 28 L. Ed. 1141; Smith v. Woolfolk, 115 U. S. 143, 148, 5 S. Ct. 1177, 29 L. Ed. 357; Union Pac. Rwy. v. Wyler, 158 U. S. 285, 15 S. Ct. 877, 39 L. Ed. 983; St. Louis, V. & T. H. R. Co. v. T. H. & I. R. Co. (C. C.) 33 F. 440, 448; Merriman v. Chicago & E. I. R. Co. (C. C. A.) 64 F. 535, 551; Savage v. Worsham (C. C.) 104 F. 18; Pendery v. Carleton (C. C. A.) 87 F. 41; Confectioners' Machinery & Mfg. Co. v. Racine Engine & Mach. Co. (C. C.) 163 F. 914, 918; Galesburg & K. El. Rwy. Co. v. Hart (C. C. A.) 221 F. 7, 12; American Mills Co. v. Hoffman (C. C. A.) 275 F. 285, 292, 293; Procter & Gamble Co. v. Powelson (C. C. A.) 288 F. 299, 308; Simkins Federal Practice, chap. 85; Merrill v. Russell, 12 N. H. 79; Wiggin v. Veasey, 43 N. H. 313, 314; Page v. Jewett, 46 N. H. 441, 445; Smith v. Wiggin, 48 N. H. 105, 110; Stearns v. Wright, 50 N. H. 293, 295; Hotel Co. v. Redington, 55 N. H. 387, 388; Stebbins v. Ins. Co., 59 N. H. 143.

It was urged before this court that the case was an appropriate one for the allowance of an amendment to accord with the proof. Such a claim was not made during the trial of the cause, which was not tried on any issue raised by the amendment. While some of the evidence in the case may have a bearing on the allegations in the amendment, it does not follow that the defendant on the new issues thus raised would have had no other defense than it offered to the charge of an unconstitutional ordinance and bad faith in its adoption. It was not until the court had decided against the plaintiff on its bill as framed that the amendment setting up fraudulent concealment of facts was offered. Amendments after the case is closed proposing additional allegations to correspond with the proof are permitted when the parties have tried their case upon the theory set forth in the amendment, and any new issues thereby raised have, in the opinion of the trial court, been fully met.

The only questions before this court, as we view the case, are whether there was an abuse of discretion in denying the amendment; or, if no abuse of discretion, whether the bill was properly dismissed and the plaintiff left to its action at law, which is adequate for the recovery of damages; or whether the bill should have been retained, if there be any ground for so doing, and compensation in damages be recovered in equity.

We do not think there was sufficient ground in this case for determining the damages in a court of equity. Any ground of equity jurisdiction alleged in the bill has already been found to be lacking, and we think rightly so, and it is not a case where a plaintiff has proceeded in equity in good faith, but the defendant by his acts has deprived the plaintiff of the only relief a court of equity could give, in which case the court may retain the bill and allow the plaintiff to recover damages in the equity court as in Milkman v. Ordway, 106 Mass. 232, 233; Smith v. Kelley, 56 Me. 64, 67; Chartier v. Marshall, 56 N. H. 478; Pomeroy, Eq. Juris. vol. 1, § 237. Here the complainant has brought its action with full knowledge of the facts alleged in its bill upon which it sought relief. The defendant has done nothing to deprive it of relief in equity, if the plaintiff was ever entitled to equitable relief. The plaintiff merely misconceived its rights in the premises. Pomeroy, Eq. Juris. § 237, note 3.

The conveyance of land to the plaintiff, even if the city officials had knowledge that it was to be divided into lots and sold for residential purposes, did not deprive the defendant of the right to exercise the police power vested in it by the state. Sanitary Dist. v. United States, 266 U. S. 405, 427, 45 S. Ct. 176, 69 L. Ed. 352; Denver & R. G. R. R. Co. v. Denver, 250 U. S. 241, 244, 39 S. Ct. 450, 63 L. Ed. 958; Texas & New Orleans R. R. Co. v. Miller, 221 U. S. 408, 414, 31 S. Ct. 534, 55 L. Ed. 789. In the one case it acted in its corporate capacity; in the other it was exercising the sovereign powers of the state. If the plaintiff was injured by the exercise of its police powers under the ordinance, it was, as the court below held, not a justiciable wrong, but damnum absque injuria.

The proposed amendment furnished no additional ground of equity jurisdiction. Rescission or cancellation of the deed cannot now be had, as the parties cannot be restored to the statu quo. Partial rescission cannot be had, except under circumstances which do not exist here. Lots have been sold, and on one, at least, a house has been built. Not all of the contracts of sale of lots have been repudiated by the purchasers, nor does it appear that the plaintiff's remedy at law for the damages upon the ground of deceit, if it has one, is not adequate.

The denial of the amendment proposed after the case was closed and decision rendered, alleging new matter, but which still left the bill based on an improper exercise of police powers, was certainly not an abuse of discretion. It is not a case where the plaintiff will lose his right of action in case the amendment was not allowed, as in Cogswell v. Hall, 185 Mass. 455, 70 N. E. 461, where justice might require a modification of the rule.

If under section 274a of the Judicial Code (28 USCA § 397) and equity rule 22 (28 USCA § 723), a plaintiff may try out his case in equity on one theory, and, failing on the merits on the grounds set forth in the bill, obtain permission of the court to try his case at law on an entirely different ground by an amendment or an "alteration of the pleadings," he may always have a second trial, provided, after hearing the evidence, he can invent some new and plausible claim. He may thus force a defendant to the expense of defending an unfounded claim without even costs to the plaintiff, unless imposed as a condition of some amendment. It would be a perversion of the statute and rule to permit such injustice.

The statute or rule does not say that every suit improperly brought in equity shall be amended and...