Texas Co. v. Central Fuel Oil Co.

• Decision Date: 13 February 1912
• Docket Number: 3,652.
• Citation: 194 F. 1
• Parties: TEXAS CO. v. CENTRAL FUEL OIL CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

194 F. 1

TEXAS CO. v. CENTRAL FUEL OIL CO. et al.

No. 3,652.

United States Court of Appeals, Eighth Circuit.

February 13, 1912

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A. L. Beaty (Jas. L. Autry and F. B. Dillard, on the brief), for appellant.

Louis Marshall and George S. Ramsey (James A. Veasey, on the brief), for appellees other than Dana H. Kelsey and Hugh Pitzer.

William J. Gregg, U.S. Atty., for appellees Dana H. Kelsey and Hugh Pitzer.

Before SANBORN and HOOK, Circuit Judges, and TRIEBER, District Judge.

TRIEBER District Judge (after stating the facts as above).

If the sole object of the bill of complaint is to obtain a decree for specific performance of the contract for the delivery of the oil, the proceeding would be one in personam, and such an action, in the absence of a statute conferring jurisdiction in rem, would not be local, but transitory, and could be maintained in any court having jurisdiction of the person of the defendant. Penn v. Baltimore, 1 Ves.Sr. 444; Massie v. Watts, 6 Cranch, 148, 3 L.Ed. 181; Orton v. Smith, 18 How. 263, 15 L.Ed. 393; Hart v. Sansom, 110 U.S. 151, 154, 3 Sup.Ct. 596, 28 L.Ed. 101; Pennoyer v. Neff, 95 U.S. 714, 723, 25 L.Ed. 565; Phelps v. McDonald, 99 U.S. 298, 25 L.Ed. 473; Cole v. Cunningham, 133 U.S. 107, 118, 10 Sup.Ct. 269, 33 L.Ed. 538; Arndt v. Griggs, 134 U.S. 316, 320, 10 Sup.Ct. 557, 33 L.Ed. 918; Western Union Tel. Co. v. Pittsburgh, etc., R.R. Co. (C.C.) 137 F. 435.

But by the provisions of article 7 of the mortgage to the Bankers' Trust Company complainant is entitled to a lien on all the premises mortgaged, subject to that of the trust company, not only for any moneys it might pay to protect the property against defaults under the mortgage or by releasing any judgment or attachment liens, but also in case of any default by the Central Company in the performance of any of the obligations of the Company under the contract with the Texas Company. This, in effect, gives the Texas Company a second mortgage upon all that property with the right to enforce that mortgage in a court of equity. That such a lien may be enforced, under section 8 of the judiciary act of March 3, 1875, in the Circuit Court of the United States for the district in which the property is situated regardless of the residence of the parties, provided the proper diversity of citizenship exists, is well settled.

Greeley v. Lowe, 155 U.S. 58, 15 Sup.Ct. 24, 39 L.Ed. 69; Dick v. Foraker, 155 U.S. 404, 15 Sup.Ct. 124, 39 L.Ed. 201. For these reasons, the court below erred in sustaining the special pleas of the defendants Bankers' Trust Company and Indian Territory Illuminating Oil Company.

As to the defendants Sagamore Oil & Gas Company, Waukesha Oil Company, Stevens Point Oil Company, and Sachem Oil Company, by filing general demurrers to the sufficiency of the bill, they waived their privilege of not being subject to this action in a national court in the state of Oklahoma even had it existed. Western Loan Company v. Boston C.M. Co., 210 U.S. 368, 28 Sup.Ct. 720, 52 L.Ed. 1101. In that case the defendant filed its demurrer to the complaint, alleging, first, that the court had no jurisdiction of the subject of the action; second, that the court had no jurisdiction of the person of the defendant; third, that said complainant did not state facts sufficient to constitute a cause of action against the defendant; fourth, that the complaint was uncertain; fifth, that the complaint was unintelligible. Neither the plaintiff nor the defendants were at the time of the institution of the suit citizens or residents of the state of Montana (the suit having been instituted in the United States Circuit Court for the District of Montana), but it was held that as diversity of citizenship existed so that the suit was cognizable in some national court, the objections to the jurisdiction of the particular court in which the suit was brought might be waived by appearing and pleading to the merits, and interposing a demurrer going to the merits as well as to the jurisdiction of that particular court amounted to such a waiver. Other cases to the same point are In re Moore, 209 U.S. 490, 28 Sup.Ct. 585, 52 L.Ed. 904; Ingersoll v. Coram, 211 U.S. 335, 29 Sup.Ct. 92, 53 L.Ed. 208; Shanberg v. Fidelity & Casualty Co., 158 F. 1, 85 C.C.A. 343, 19 L.R.A. (N.S.) 1206; McPhee & McGinnity Co. v. Union Pacific R.R. Co., 158 F. 5, 87 C.C.A. 619; Logan & Bryan v. Postal Telegraph Co. (C.C.) 157 F. 570.

But, aside from that fact, neither of these last-named defendants have appealed from the order of the court overruling their pleas. The question whether the special pleas to the jurisdiction were erroneously overruled is therefore not presented here. In O'Neill v. Wolcott Mining Co., 174 F. 527, 98 C.C.A. 309, 27 L.R.A. (N.S.) 200, this court, citing numerous authorities to sustain the conclusion reached, said:

'An appellee or defendant in error who takes no appeal or writ of error himself cannot, by assigning cross-errors or by brief or argument, confer jurisdiction upon a federal appellate court to consider, review, or decide rulings against him in the court below.'

The pleas of the defendants Pitzer and Kelsey to the jurisdiction were erroneously sustained. Their pleas are that they are officers of the United States, and the action against them is in effect a suit against the United States. Such officers are not exempt from the process of the court nor from its injunction in case they should undertake to do any act not authorized by law; nor is such an action one against the United States. The courts have jurisdiction to determine whether the acts of officers in any particular case are in pursuance of authority conferred on them by the acts of Congress or the head of a department.

Noble v. Union River Logging R.R. Co., 147 U.S. 172, 13 Sup.Ct. 271, 37 L.Ed. 123; Grisar v. McDowell, 6 Wall. 363, 18 L.Ed. 863; Butterworth v. United States ex rel., 112 U.S. 50, 5 Sup.Ct. 25, 28 L.Ed. 656; Ex parte Young, 209 U.S. 123, 28 Sup.Ct. 441, 52 L.Ed. 714, 13 L.R.A. (N.S.) 932; Garfield v. Goldsby, 211 U.S. 249, 29 Sup.Ct. 62, 53 L.Ed. 168; Western Union Telegraph Co. v. Andrews, 216 U.S. 165, 30 Sup.Ct. 286, 54 L.Ed. 430; Wadsworth v. Boysen, 148 F. 771, 78 C.C.A. 437.

So far as the allegations of the bill show, the duties of these defendants are only to secure and protect the rights of the Indian lessors by collecting the royalties due them. The question in issue in this cause, in so far as it affects these defendants, is not whether the court has the power to enjoin them from doing lawful acts, but whether they are proper parties in view of the interests of the Indians who are the owners of the lands leased, and for whose protection these officers are acting. Although they are not indispensable, nor even necessary, parties, they are proper parties, and the mere fact that they are employes or officers of the government does not exempt them from being made parties in an action of this nature. But, even if the special pleas of all the parties who filed them should have been sustained, it would not affect the power of the court to proceed with the cause so far as the other defendants are concerned. The rule of law is well settled that only the absence of indispensable parties will deprive a court of equity of the power to proceed against the other defendants. Proper parties, or even necessary parties, may be dispensed with, but the decree will not affect their rights. Payne v. Hook, 7 Wall. 425, 19 L.Ed. 260; Hotel Company v. Wade, 97 U.S. 21, 24 L.Ed. 917; Carrau v. O'Calligan, 125 F. 657, 60 C.C.A. 347, affirmed sub nom. Farrell v. O'Brien, 199 U.S. 89, 25 Sup.Ct. 727, 50 L.Ed. 101; Geer v. Mathieson Alkali Works, 190 U.S. 428, 23 Sup.Ct. 807, 47 L.Ed. 1122; Cella, Adler & Tilles v. Brown (C.C.) 136 F. 439, affirmed 144 F. 472, 75 C.C.A. 608; Rogers v. Penobscott Mining Co., 154 F. 606, 83 C.C.A. 380.

Neither of these defendants is an indispensable party to this proceeding and the subsidiary companies are not even necessary parties, for the Central Company, as the holder of the majority of their stock, has control of them, and a decree against it will grant all the relief complainant prays. Union Pacific Ry. Co. v. Chicago, etc., Ry. Co., 163 U.S. 564, 592, 16 Sup.Ct. 1173, 41 L.Ed. 265. Equity Rule 47 (29 S.Ct. xxxi) expressly provides for cases of this nature.

Did the court err in sustaining the demurrer to the bill? On behalf of the appellee, it is urged that there is no equity in the bill for several reasons. First, it is argued that complainant has a complete and adequate remedy at law by an action for damages for breach of the contract. It is true that a court of equity will not assume jurisdiction of a cause, and especially one for specific performance, if the complainant has a complete and adequate remedy at law. But to have this effect it is not sufficient that there be a remedy at law. It must be plain and adequate, and as certain, prompt, complete, and efficient to attain the ends of justice and its prompt administration as the remedy in equity.

Boyce v. Grundy, 3 Pet. 210, 7 L.Ed. 655; Watson v. Sutherland, 5 Wall. 74, 18 L.Ed. 580; Davis v. Wakelee, 156 U.S. 680, 15 Sup.Ct. 555, 39 L.Ed. 578; Walla Walla v. Walla Walla Water Works, 172 U.S. 1, 19 Sup.Ct. 77, 43 L.Ed. 341; Smith v. Bank, 89 F. 832, 32 C.C.A. 368; Castle Creek Water Co. v. Aspen, 146 F. 8, 76 C.C.A. 516; Farwell v. Colonial Trust Company, 147 F. 480, 78 C.C.A. 22.

The allegations in the bill which the demurrer admits to be true show clearly that the remedy at law is entirely inadequate to grant the...