Tug River Coal & Salt Co. v. Brigel

• Decision Date: 11 April 1898
• Docket Number: 557.
• Citation: 86 F. 818
• Parties: TUG RIVER COAL & SALT CO. v. BRIGEL et al.
• Court: U.S. Court of Appeals — Sixth Circuit

86 F. 818

TUG RIVER COAL & SALT CO. v. BRIGEL et al.

No. 557.

United States Court of Appeals, Sixth Circuit.

April 11, 1898

Bill was filed in the circuit court to foreclose a mortgage and trust deed, executed by appellant in favor of appellees, as trustees, to secure payment of certain bonds issued and sold by appellant company, a corporation organized under the laws of Kentucky, and a citizen of that state. Complainant Brigel was a citizen of Ohio, and Murray a citizen of New York. The bill sought a sale of the property covered by the mortgage in bar of the equity of redemption. At the time of filing the original bill, there were creditors of the defendant, some holding claims for taxes paid, and others being judgment creditors with executions levied, and claiming junior liens thereby under the laws of Kentucky. A number of these creditors were made parties to the original bill, and it appeared from the record that the citizenship of one or more of them was of the same state with that of one of the complainants, and the citizenship of others was alleged to be unknown. The case having been brought before this court on appeal, the final decree was reversed for lack of necessary diverse citizenship to support the jurisdiction of the court, as the record then was. 31 U.S.App. 665, 14 C.C.A. 577, and 67 F. 625. When the case went back, the circuit court permitted an amendment of the bill, so as to dismiss the bill as to all parties except the appellees and appellant, so as to make the suit one of foreclosure only between the trustees as complainants, and the mortgagor company as defendant. A sale in bar of the equity of redemption was specially prayed for in both original and amended bills. Between the date of filing the original bill and the amendment thus allowed, Murray, one of the trustees, changed his citizenship from New York to Kentucky, and this fact was set up in a plea to the amended bill, raising objection thereby to the jurisdiction of the court. This plea, having been set down for hearing, was overruled by the court, and the defendant answered the amended bill. The case was then heard again upon a master's report as to debts, liens, and priorities various creditors having intervened by petition. Sale was made under orders of the court, and from the final decree confirming the sale the case is again brought to this court by appeal. The opinion of the court disposing of the plea is published in 73 F. 13.

W. G Hutcheson and Thomas F. Hargis, for appellant.

Walter A. De Camp and Thomas W. Bullitt, for appellees.

Before LURTON, Circuit Judge, and SEVERENS and CLARK, District Judges.

CLARK District Judge, after stating the case, .

The question of jurisdiction raised must first be considered and determined. It is well settled that, if the necessary diverse citizenship exists at the time of commencement of the suit no subsequent change of citizenship, although voluntary, will defeat the jurisdiction which once vested. Morgan's Heirs v. Morgan, 2 Wheat. 290; Mollan v. Torrance, 9 Wheat. 537; Clarke v. Mathewson, 12 Pet. 164; Anderson v. Watt, 138 U.S. 694, 11 Sup.Ct. 449. And where the jurisdiction of the circuit court has fully attached against the tenant in possession in an action of ejectment, substitution of the landlord as defendant will not affect the jurisdiction, although he may be a citizen of the same state with plaintiff. Hardenbergh v. Ray, 151 U.S. 112, 14 Sup.Ct. 305. The primarily interested and indispensable parties to the original bill were the appellees and appellant. There can be no doubt that there was jurisdiction over the bill so far as the trustees as complainants and the mortgagor company as defendant were concerned; and, if all other parties had been omitted, the jurisdiction would have been too clear to admit of question. The presence of the other parties, and the relief sought against them, constituted an impediment to the exercise of the jurisdiction otherwise rightfully attaching. It is well settled now that these subsequent lienholders were not indispensably necessary parties to the original bill. The dismissal as to them enabled the court to retain the jurisdiction which rightly belonged to it, and merely removed an impediment to the exercise of that jurisdiction.

In Conolly v. Taylor, 2 Pet. 556, bill was filed in the circuit court of the United States for the district of Kentucky by aliens and a citizen of Pennsylvania against citizens of Kentucky and a citizen of Ohio, on whom process was served in Ohio. As between the citizen of Pennsylvania and of Ohio, neither of them being a citizen of the state in which the suit was brought, the court could exercise no jurisdiction, though its jurisdiction as between the alien plaintiffs and the defendants could not be questioned. Before the cause was heard, the name of the citizen plaintiff was struck out of the bill, and the question was whether the original defect was cured by this change, and whether the court could proceed to a final decree with the parties then left in the case. The defendant contended by way of argument that, if an alien becomes a citizen pending the suit, jurisdiction is not devested by this circumstance, and so, if one citizen sued another citizen of the same state, jurisdiction could not be given to the court by the citizen who brought the suit removing and becoming a citizen of a different state; and in reply to this contention Mr. Chief Justice Marshall, delivering the judgment of the court, said:

'This is true, but the court does not understand the principle to be applicable to the case at bar. ' 'Where there is no change of party, a jurisdiction depending on the condition of the party is governed by that condition as it was at the commencement of the suit. The court, in the first case, had complete original jurisdiction; in the last it had no jurisdiction, either in form or substance. But, if an alien should sue a citizen, and should omit to state the character of the parties in the bill, though the court could not exercise its jurisdiction while this defect in the bill remained, yet it might as is every day's practice, be corrected at any time before the hearing, and the court would not hesitate to decree in the cause. So in this case. The substantial parties plaintiffs-- those for whose benefit the decree is sought--are aliens, and the court has original jurisdiction between them and all the defendants. But they prevented the exercise of this jurisdiction by uniting with themselves a person between whom and one of the defendants the court cannot take jurisdiction. Strike out his name as a complainant, and the impediment is removed to the exercise of that original jurisdiction which the court possessed between the alien plaintiffs and all the citizen defendants. We can perceive no objection, founded in convenience or in law, to this course.'

The principle declared in this case was reaffirmed and applied in Vattier v. Hinde, 7 Pet. 252, in which the bill had been dismissed as to a defendant and the jurisdictional defect cured. In this case Mr. Chief Justice Marshall said:

'It is impossible to draw a distinction, so far as respects jurisdiction, between striking out the name of a plaintiff and of a defendant. The citizen of Ohio may have been a more necessary party in the cause than the citizen of Pennsylvania. Had it been otherwise, the same principle which sustained the one alteration would have sustained the other.'

See, also, Carneal v. Banks, 10 Wheat. 181.

Bill was filed in the circuit court for the Southern district of Alabama by citizens of Texas against defendants, all of whom were citizens of Alabama, except two of the defendants, who were also citizens of Texas. Objection was taken in the circuit court to its jurisdiction on account of the residence of these two defendants in the same state with the complainants, and the court, in its final decree, directed the bill to be dismissed as to these two defendants, as not being essential parties to the suit by the complainants. The supreme court of the United States, in disposing of this objection, said:

'The objection to the jurisdiction of the court that two of the defendants were residents of Texas, the same state with the complainants, was met and obviated by the dismissal of the suit as to them. They were not indispensable parties; that is, their interests were not so interwoven and bound up with those of the complainants or other parties that no decree could be made without necessarily affecting them. And it was only the presence of parties thus situated which was essential to the jurisdiction of the court. The rights of the parties, other than the defendants who were citizens of Texas, could be, and were, adequately and fully determined without prejudice to the interests of those defendants. And the question always is, or should be, when objection is taken to the jurisdiction of the court by reason of the citizenship of some of the parties, whether to a decree authorized by the case presented they are indispensable parties, for, if their interests are severable, and a decree without prejudice to their rights can be made, the jurisdiction of the court should be retained, and the suit dismissed as to them. ' Horn v. Lockhart, 17 Wall. 570.

It is very clear, therefore, that the circuit court properly allowed the amendment, and that the amendment, when made, related to the commencement of the suit, for otherwise the amendment would be ineffectual to remove the impediment, and would, as was justly observed by the learned circuit judge, be without meaning. This must be so, for it is well settled in these and other cases that jurisdiction depends upon the state of things at the time the suit is brought.

In Anderson v. Watt, 138 U.S. 707, ...