Kuhn v. Morrison

• Decision Date: 11 May 1894
• Citation: 75 F. 81
• Parties: KUHN v. MORRISON et al.
• Court: U.S. District Court — Northern District of Georgia

75 F. 81

KUHN v. MORRISON et al.

United States Circuit Court, N.D. Georgia.

May 11, 1894

W. L Eakin and Brown & Spurlock, for complainant.

Pavne &amp Walker and M. H. Clift, for defendants.

NEWMAN District Judge.

This is a bill to foreclose a mortgage on certain lands situated in Catoosa county, in this district, by Kuhn, a citizen of Pennsylvania, who sues on his own behalf and as a representative of the American Waterworks & Guaranty Company Limited, a corporation of the state of Pennsylvania. The defendants are Robert Morrison, a citizen of Ohio, and Samuel E. Green, Edward Scott, Moses Clift, and J. T. Williams citizens of the state of Tennessee, and John X. Dickert, the latter alleged to be the tenant residing upon the mortgaged land in Catoosa county, and who is a citizen of the state of Georgia, residing in this district. The said tenant, John X. Dickert, was served personally. The other defendants were served under section 8 of the act of 1875 (Supp.Rev.St. p. 84), an order having been granted for that purpose.

1. The first question raised here is that the act under which service was ordered, and under which jurisdiction is claimed, is repealed by the language of section 1 of the act of March, 1887, corrected by the act of 1888. Counsel evidently overlooked the provisions of section 5 of the same act, in which it is expressly provided that section 8 of the act of 1875 is not repealed or affected.

2. It is contended that this mortgage, being usurious under the laws of Tennessee, cannot be enforced, because, by the statutes of that state, the lien of a mortgage is lost when the debt which it secures is affected with usury. Counsel cite De Wolf v. Johnson, 10 Wheat. 367. The answer to this contention is that the note which is secured by the mortgage being foreclosed here was made in Georgia, and, having no other place of payment named, was payable in this state. The matter of interest and usury is controlled by the laws of Georgia, and in this state the rate of interest provided for in the note is legal when stipulated for in writing. The fact that the mortgage was executed in Tennessee would be immaterial when the note which it secures is a Georgia contract.

3. As to the question of citizenship, and the contention that the court is without jurisdiction to grant the relief sought, as against Green, Clift, and Williams, it is sufficient to say that, the complainant and the defendants being citizens of different states, this court has jurisdiction generally of a controversy involving the jurisdictional amount between them. The real estate covered by the mortgage being in this district, the court may, under section 8 of the act of 1875 (Supp.Rev.St. p. 84), take cognizance of the suit to foreclose the mortgage. The court taking cognizance of the foreclosure suit should entertain and determine such other pertinent questions as are necessary to give the complainant mortgagee perfect and full relief. Farmers' Loan & Trust Co. v. Houston & T. C. Ry. Co., 44 F. 115; Converse v. Dairy Co., 45 F. 18. The question of the superiority of Green's mortgage would seem to be proper matter to be determined in this proceeding. It would be necessary to ascertain and determine the dignity of his mortgage in order to show the extent to which a sale under complainant's mortgage would convey title to the mortgaged real estate. This being the necessity of the situation, and Green being a proper party under recognized equity practice, the fact that he was a citizen of another state would be immaterial; service being made under section 8 of the act of 1875. Morrison, Scott, and Clift, who joined in the mortgage, are certainly proper parties. The demurrer for want of jurisdiction is by Green and Morrison. There is no objection to the jurisdiction on the part of Scott and Williams.

To what extent relief may be granted by the bill is not so clear. It may be said, however, that, as to Green's right to enforce his prior mortgage against Morrison's mortgage, there seems little doubt of the right of this court to act and afford relief. It is not believed that a general judgment against Green could be rendered in this proceeding. The power of the court in the premises is confined to a determination of such questions as relate to, and are necessary for, the enforcement of complainant's rights under his mortgage. It must also be confined to rights in or to the real estate by virtue of which this court takes cognizance of this suit.

One of the grounds of demurrer by Clift is that the bill is multifarious, 'in that it seeks to foreclose an alleged mortgage, and at the same time restrain another defendant from asserting a claim of title adverse to both the alleged mortgagor and mortgagee, that is shown to have accrued prior to the alleged mortgage under which complainant claims. ' This ground of demurrer has been, in effect, disposed of by what has been stated above. If Green is a proper party for the purpose of ascertaining the extent and dignity of his lien as against complainant's mortgage, the bill is not multifarious, for the reasons stated.

The conclusion is: As to so much of the bill as prays for a general judgment against Green, the demurrer will be sustained; as to the remainder of the bill, the demurrer will be overruled. The extent of which the court can grant relief under the complicated facts set out in the bill must be determined as the cause proceeds.

On Final Hearing.

(July 1, 1896.)

The conclusions I have reached in this case will, for lack of time to be more elaborate, be stated in a few paragraphs.

1. I am satisfied that while the City Water Company of Chattanooga Tenn., might be a proper party to this cause, it is not a necessary or indispensable party. The evidence shows that the money loaned by Kuhn, trustee, to Morrison, was by a draft drawn by the City Water Company of Chattanooga, Tenn., on the American Waterworks & Guaranty Company, Limited, of Pittsburgh, Pa. This latter company is joined as complainant in the bill with Kuhn, trustee. It seems to...