Smith v. Bell

• Decision Date: 12 October 1914
• Citation: 217 F. 243
• Parties: SMITH v. BELL.
• Court: U.S. Court of Appeals — Eighth Circuit

217 F. 243

SMITH v. BELL.

United States Court of Appeals, Eighth Circuit.

October 12, 1914

Syllabus by the Court.

The citizenship and residence of the trustee in a mortgage to secure the payment of a claim owned by another, and not those of such owner, condition the jurisdiction by a national court of a suit to foreclose the mortgage, because the trustee is and the cestui que trust is not, an indispensable party to the suit.

A pleading that one failed to operate wells and furnish gas therefrom continuously discloses no breach of a covenant to sell the surplus such wells may produce.

H. B Martin and A. F. Moss, both of Tulsa, Okl., for appellant.

James A. Veasey and J. P. O'Meara, both of Tulsa, Okl., for appellee.

before SANBORN and CARLAND, Circuit Judges, and REED, District Judge.

SANBORN Circuit Judge.

The defendant below, P. F. Smith, complains of a decree of foreclosure of a mortgage he made to John A. Bell, Jr. because the court below struck out of his answer that part by which he sought to question the jurisdiction of the court and that part by which he sought to set up a counterclaim and set-off.

The complaint pleaded the mortgage and the notes it secured, and copies of them were attached to it. The mortgage and the notes ran to John A. Bell, Jr., trustee, and the mortgage provided that the defendant should keep the buildings and personal property described therein insured, with the loss payable to Bell or his successors in trust; that if default should be made in any of the conditions of the mortgage the whole sum intended to be secured by the mortgage should, at the option of Bell, or his successors in trust, or any other legal holder of the indebtedness, become due; and that any or either of them should then have full right and authority to take possession of the premises mortgaged and to foreclose the mortgage.

The plaintiff alleged in his complaint, and the defendant admitted in his answer, that the former was a resident and citizen of the state of Pennsylvania and that the latter was a resident and citizen of the state of Oklahoma; but the defendant alleged that the Standard Oil & Gas Company of Bartlesville, Okl., was the owner and holder of all the beneficial interest in the notes and mortgage and the real party in interest in the case, that that company was a citizen and resident of the state of Oklahoma, and that for that reason the court below had no jurisdiction of the suit. It was this portion of the answer that defendant first insists it was error for the court to strike out. But by the terms of the stipulation made by the defendant in the mortgage he expressly agreed that upon default in the conditions thereof either Bell, the trustee or his successor in the trust, might take possession of the property and foreclose the mortgage, and he is thereby estopped from denying the competency of the trustee so to do. The legal title to the mortgage was in the trustee. He was the indispensable party plaintiff in the suit, and while the owner of the notes, the beneficiary of the trust, may have been a proper party, it was not an indispensable one, and its citizenship was immaterial to the jurisdiction of ...