Irvine Co. v. Bond

• Decision Date: 25 May 1896
• Docket Number: 610.
• Court: U.S. District Court — Southern District of California
• Parties: IRVINE CO. v. BOND et al.

74 F. 849

IRVINE CO. v. BOND et al.

No. 610.

United States Circuit Court, S.D. California.

May 25, 1896

Thos B. Bishop and Lamme & Wilde, for complainant.

White &amp Monroe, William T. Kendrick, and Victor Montgomery, for defendants.

ROSS Circuit Judge.

This is a suit in equity, brought by the complainant, alleged to be a corporation organized and existing under the laws of the state of West Virginia, against a large number of persons alleged to be citizens and residents of the state of California, to procure a decree establishing and quieting, as against the adverse claims of the defendants complainant's alleged right to the waters of a certain stream called 'Santiago Creek,' in Orange county Cal., and an injunction enjoining the defendants from interfering with any of the said waters or the dams, ditches flumes, etc., by which the complainant alleges it diverts the waters for domestic use, irrigation, and other beneficial purposes; the complainant basing its alleged rights upon its alleged ownership of the Rancho Lomas de Santiago, situated in said county of Orange, containing about 48,000 acres of land, and of an adjoining tract of 12,000 acres of the Rancho Santiago de Santa Ana, through which latter tract, it is alleged, the Santiago creek runs in its natural channel, and riparian to which, it is averred, are all the lands so alleged to be owned by complainant. The defendants Lotspeich filed a plea to the jurisdiction of the court, averring, in substance, that the court ought not to take cognizance of the suit, for the reason that it does not really and substantially involve a suit or controversy properly within the jurisdiction of this court; that the complainant has been improperly and collusively made such for the sole purpose of creating a case cognizable herein; that the Irvine Company is not the real party in interest, but a nominal party only; that on the 28th day of July, 1894, and until the times mentioned in the bill as amended, James Irvine was, and ever since has been, a citizen of the state of California; that on the day named he signed and acknowledged in form a conveyance purporting to transfer all the lands, water, and water rights described in the amended bill to the Irvine Company, but that the transfer was not real or actual, but was and is fictitious, nominal, and colorable only, and was made, acknowledged, and recorded by James Irvine, by collusion with the complainant corporation, for the sole purpose of creating a fictitious ground for federal jurisdiction, and thereby preventing and avoiding the trial of the title to the waters in controversy in the county where they are situated; that complainant has not, nor does it claim to have, any interest in or to the land or water except what it derived through the purported conveyance from James Irvine, who, the plea alleges, has ever since continued to be the real party in interest in the property. And, as further tending to show that the apparent interest and title of the complainant corporation is, in fact, nominal, fictitious, and colorable, the plea alleges, in substance, that the Irvine Company was created a corporation under and by virtue of the laws of the state of West Virginia on the 4th day of June, 1894, at the instance of James Irvine, with a subscribed capital stock of $500 only, and so continued at the time the purported conveyance from James Irvine was recorded; that the property alleged in the amended bill to be vested in the corporation complainant is of the value of at least $2,000,000; that the five incorporators of the complainant corporation are all young men, with very limited means, and otherwise lacking in influence or ability to manage the property; that the whole property continues in the possession and under the control of James Irvine, and the former attorney and present attorney of James Irvine is also attorney for the complainant corporation, and one of its directors; that at the time the corporation was created, and for some weeks prior thereto, James Irvine had notice of the adverse claims of the defendants to all the waters of the Santiago creek, and said James Irvine was expecting and fearful that the defendants would begin suit in the superior court of Orange county, state of California, against him to quiet their title to the waters and water rights against the claims of James Irvine, and to enjoin him from diverting the waters of the creek, or any part thereof; that on the 19th day of July, 1894, all the defendants to this suit did commence an action to quiet their title to all the waters and water rights in controversy in the superior court of Orange county, Cal., and at the same time did file a notice of the pendency of the action, containing the names of the parties, the object of the action, and a description of the property affected thereby, and, in anticipation of the service of process in that action, and for the purpose of avoiding process therein, James Irvine fled from the said county of Orange, and willfully avoided service of summons therein, and remained in hiding until he had executed the aforesaid purported conveyance to the complainant corporation, and until this suit was brought by the complainant corporation, and until August 17, 1894, at which time service was made of the summons and copy of the complaint in the action brought by these defendants in the superior court of Orange county, Cal., on James Irvine; that at the time the defendants to this suit filed their suit against James Irvine complainant corporation had notice of its commencement, and that it received its purported conveyance from James Irvine with notice thereof; and that James Irvine and complainant corporation, by collusion, for the purpose of...