Percy Summer Club v. Astle

• Decision Date: 20 May 1908
• Docket Number: 682.
• Citation: 163 F. 1
• Parties: PERCY SUMMER CLUB v. ASTLE et al.
• Court: U.S. Court of Appeals — First Circuit

163 F. 1

PERCY SUMMER CLUB v. ASTLE et al.

No. 682.

United States Court of Appeals, First Circuit.

May 20, 1908

Philip Carpenter, for appellant.

Edwin G. Eastman, Atty. Gen., for the State of New Hampshire.

Henry F. Hollis (Albert S. Batchellor, on the brief, and Crawford D. Hening, on supplemental brief), for appellees.

Before COLT and LOWELL, Circuit Judges, and BROWN, District Judge.

LOWELL Circuit Judge.

The complainant, a New Jersey corporation, brought in 1900 a bill in equity in the Circuit Court for the District of New Hampshire against defendant citizens of New Hampshire, named and unnamed, to enjoin them from fishing in Christine Lake and from trespassing upon its shores. The complainant claims an exclusive right of fishery in the lake and an exclusive right of access to its shores. The defendants assert a right to fish existing by the common law of New Hampshire in favor of the public. The Circuit Court dismissed the bill, and the complainant has appealed to this court. 145 F. 53. In their answer, the defendants set up that this court was without jurisdiction, because the complainant's citizenship in New Jersey was collusively acquired for the purpose of giving jurisdiction to the federal courts; that the complainant was really a New Hampshire corporation, and so the diversity of citizenship alleged in the bill was based upon fraud. This question was little argued before us or before the Circuit Court. Considerable evidence was taken thereupon. In their supplementary brief the defendants seem disposed to waive their objection. Nevertheless we are bound to dispose of the jurisdictional question before we consider the merits of the case. If this objection of the defendants be well founded the Circuit Court was altogether without jurisdiction of the cause, although both parties had agreed to submit thereto. In 1883 certain persons organized a corporation under the laws of New Hampshire, styled the 'Percy Summer Club,' to which corporation most of the land in question was duly conveyed. In 1890 the members of the New Hampshire corporation, or some of them, organized the present complainant under the laws of New Jersey, and in the same year caused to be made to the complainant a conveyance of all the real estate belonging to the original New Hampshire corporation. Other land was subsequently acquired by the complainant from other persons. In 1895, when a compromise was proposed concerning the fishery in Christine Lake some members of the New Jersey corporation, and other persons acting with them, organized a second New Hampshire corporation under the same name.

This second New Hampshire corporation took by lease from the complainant the latter's real estate, but that lease was terminated in 1899. The corporate purposes of the three several corporations above-mentioned were the same. The defendants contend that the court will look beneath the citizenship of the complainant in New Jersey, as established by the legal fiction which follows incorporation, and will treat the complainant, not as the veritable owner of the property here in question, but as a person who has been given a legal title thereto with the sole purpose that the real party in interest, a citizen of New Hampshire, may obtain a trial of its controversy with the defendants, also citizens of New Hampshire, in the federal courts.

The defendants rest their contention upon Lehigh Mining &amp Mfg. Co. v. Kelly, 160 U.S. 327, 16 Sup.Ct. 307, 40 L.Ed. 444, which undoubtedly resembles the case at bar in some important respects. The differences between the two cases are considerable, however, and, in our judgment, they are material. The Lehigh Company was incorporated immediately before the commencement of the suit. The complainant before us was incorporated 10 years before this bill was brought. In the Lehigh Case, as stated by Mr. Justice Harlan, no purpose but that of gaining federal jurisdiction was suggested by the plaintiff's incorporation. In the case at bar most of the complainant's members were residents of New York or of places further south. Some of these men testified that the New Jersey incorporation was resorted to for the greater convenience of corporate meetings. In the Lehigh Case the Virginia corporation was held ready to accept a reconveyance from the plaintiff after the close of the litigation. In the case at bar the New Hampshire corporation of 1883 has been neglected for many years, and the rights under its charter may well have lapsed. Except as evidence of the intention of the members, the New Hampshire incorporation of 1895 does not concern us, being subsequent to that in New Jersey. In the Lehigh Case the plaintiff held no property except that conveyed to it by the Virginia corporation. In the case at bar the complainant has acquired land from parties other than the New Hampshire corporation. The complainant has spent considerable sums of money upon the property. On the whole while we may suspect that a desire to enter the federal courts was the chief cause of the New Jersey incorporation, yet the defendants have not shown that this was the sole cause of that incorporation so clearly as to justify us in treating it as a mere subterfuge. The Circuit Court, therefore, had jurisdiction of the case.

At the argument the defendants contended that the bill should be dismissed because the complainant had an adequate remedy at law. We do not find this objection anywhere stated in the pleadings, and we agree with the learned judge of the court below that the case was not without the jurisdiction of the Circuit Court by reason of a want of equity. We also agree with him that the controversy before us was not res judicata between the parties.

We come next to the merits of the case. Christine Lake is a natural lake said to contain about 140 acres, situated in the town of Stark county of Coos and state of New Hampshire.

There are several tiny streams flowing into it, and it delivers its waters through an unnavigable outlet into the Ammonoosuc river. The complainant claims title to the whole border of the lake by mesne conveyances under grants from the English crown made in 1773 and 1774. The complainant's paper title does not go back beyond 1834; but the earlier land records of Coos county were destroyed by fire in 1886, and we may fairly infer the loss of a deed or of a series of deeds which granted to the complainant the title and rights conveyed by the crown to the grantees of Stratford and of Percy.

The Stratford grant made by the crown to the 'grantees of Stratford' in 1773 was expressed to include 'all that tract or Parcell of Land situate lying and being within our said Province of New Hampshire containing by admeasurement 48603 acres, and is to contain something more than . . . miles square out of which an allowance is to be made for high Ways and unimprovable lands by Rocks Mountains and rivers 2600 acres free according to a plan and survey * * * butted & bounded as follows, viz.' (Then followed the boundaries expressed as in an ordinary deed.) 'To have and to hold the said tract of land as above expressed together with all privileges and appurtenances to them and to their respective heirs and assigns forever by the name of Stratford, upon the following conditions. ' The conditions are immaterial. The Percy grant of 1774 used similar language. Construed according to the common law of England, these grants passed to the grantees the fishery in Christine Lake. Bristow v. Cormican, 3 App.Cas. 641.

The first Constitution of New Hampshire, adopted in 1784, provided that:

'All the laws which have heretofore been adopted, used and approved, in the province, colony, or state of New Hampshire, and usually practiced on in the courts of law, shall remain and be in full force until altered and repealed by the Legislature; such parts thereof only excepted as are repugnant to the rights and liberties contained in this Constitution.'

In State v. Rollins, 8 N.H. 550, 561 (1837), the Supreme Court said:

'There seems to be no reason to doubt, therefore, that the body of the English common law, and the statutes in amendment of it, so far as they are applicable to the government instituted here, and to the condition of the people, were in force here, as a part of the law of the province, except where other provision was made by express statute, or by local usage.'

The defendants assert a local usage of free fishery in the ponds of New Hampshire, contrary to the common law of England. The latest decisions of the highest court of New Hampshire undoubtedly declare that this usage exists. If it does not exist, the common law is operative, and the complainant prevails. The existence or nonexistence of this local usage is the principal question in the case.

The complainant's argument is this: The grants made by the crown to the 'grantees of Stratford' in 1773, and to the 'grantees of Percy' in 1774, though these grants made no express reference to fishery, yet passed to the grantees the title both to the waters of Christine Lake and to the fishery therein. This was the construction put upon like grants by the common law which, in 1773 and 1774, was in force in England, which was then in force in the Province of New Hampshire, and has since been established as the common law of the state by virtue of its Constitution adopted in 1784.

This was the construction put by the courts of New Hampshire upon like grants until 1889, when the Supreme Court of the state overruled its former decisions and thus changed a well-established rule of property. Under these circumstances the federal courts are not bound by the latest decisions of the state courts in the construction of the grants under consideration, but, on the contrary, are bound to...