M:'BEE17. MARIETTA &: N·. G. RY. CO.
MoBsE et al.
t7. MARIETTA
& N. G. Ry. Co. et al.
(Circuit Court. E. D. Tennessee, N. p. December 10, 1891.) 1. JURISDIOTION ·oFFEDERAL COURTS-DISTRICTS-NoN-RIlSIDENT DEFENDANT.
Act Aug. 18, ]888, § ], declates,among other things, that no civil suit shall be brought before the federal circ)lit or district courts against any person by orilPnal process in any other district than that whereof he is an inhabitant; but sectIon I) provides that nothing in this aot shall be construed to repeal or affect any jurisdiction or right mentioned in Act March 8, 18i5, § 8, ThiB section provides that in any suit toenfoi-ce any legal or equitable lien on, or claim tq, or to remove any lien or cloud upon, property situated iii the district where the suit is brought, defendants who are not inh.lbitants thereof may be made parties, and brought into court by the methods there prescribed. Held, that this latter section applies to an original bill, brought for the purpose of enforcing various liens upon part of a railroad lying in "he against the lien of a general mortgage, which is about to be foreclosed in the same court by a suit ancillary to another suitln a different district and state; and such original bill may be maintained, although some of the defendlUlts are non-residents of the district.
2.
BAlIE.,...,CJTlZENSHIP OF PABTlES-SUPPLFMENTARY PROCEEDING.
While such bill is an original bill within the meaning of that term as used in. eqUity pleadlDg, yet'the SUit, in its· essence, is supplementary to the ancillary foreclosure suit. whioh it Seeks to OppOell, snd bence the court's jurisdiction is unaffeoted by the fact tbat when tbeparties are arranged according to their interests intlle:spit, $ome wllo are residents of the same state will be found on opposite sides of the co?troversy.
In Equity. Bill by V. E. Mol3ee and others against the Marietta &; North Georgia. Railway Company, the Central Trust Company of New York, and others, setting. up certain liens upon a railroad, and opposing the. forecloBu·re of a mortgage thereon, as injurious to their rights. On motion to dismiss the bill. Denied. Wa8hbum . Templeton, & ShieU18, J. W. OaldweU, and W. T. Welcker,}orplaintifls. . . Henry B. P(}mpki'll8and G. N.TUlman, for defendants. KEY,J'. The Central Trust Company of New York, 13th January, 18,91, filed its bill in, this court against the Marietta & North Railway Company, tha.t it had lately filed its bill in the circuit United States for the northern district of Georgia for the court of a mortgage executed by saiq. ;railway company January 1, 1887, to secure its bonds to the.amountof.$3,821,OOO upon its entire property, and frllnchise8; interest upon the bonds to be lines of paid. semi-IUlm;1811y. The, bill shows that the prolJerty covered by the mortgage extends from Ml\rietta,Ga., to Knoxville, Tenn.; that the is a corporation created by the laws of Georgia and railway North eatolina. Themain line pf;road is 205 mUes long, of which 951 mile!! ,JleJn Georgia and roUes How or by what authority,the railway company came into TeIille!c'see the bill does not disCllose.Th0biUallegesthat the defendunt has made default in the payment MittHnterest, and is. iIisolvent; .asks to have this bill cillilrytQ' 81litin Geotgiato'liavea receiver appointed.; the mortgage .and the moneY,I1.risipg applied to the .pay the -boPAJ.:,·o'n,the complainants Mc;Bee, al. filed
FEDERA.L REPORTER,
vo1.48.i N
their bill against the complainant and defendant in the first-named bill and against 'a large number of firms and corporations, in which it is alleged that the portion of the railroad aforesaid which is within the limits of Tennessee was built by the Knoxville Sonthern Railroad Company, a corporation created by the laws of Tennessee; that complainants and most of defendants to the bill are lien creditors of said road; that the mortgage in favor of the bondholders aforesaid is void so far as the line of road in Tennessee is concerned, or, if not void, is subject to the prior liens of the creditors of the Knoxville Southern Railroad. They resist the relief songht by the trust company; oppose the filing of the trust company's bill as an allcilllFY proceeding to the bill in Georgia; say the ltnoxvilleSouthern Railro!id Company owns the line of road in Tennessee, its property, etc.; ask 'for the appointment of a receiver, for the,r;llle of that road, Jor the appli,cation of the proceeds to the debts of complainants and such other creditors as are parties or may become partiE\s,tothe cause. wsoprays for ,an injunction against;the tra1 Trust Company ,to prevent it from prosecuting ancillary suit in from having a recetyer appointe,d on the, of railroad in Tennessee. On the 22d day of January, 1891, an:order was made appointing a temporary receiver, which recites " , "These,causes came on to be anQ were heard together by .order of ,the Itisfurthetordllred that the bill ofV'. E. McBee et als.';,s·;KnoxitJille S()uthet11. Railroaa :Company et also be treated and regarded 'as 'an in8olvenlibill,' and thatall,creditorsofsaid Kn{)x\'ille Southern ,Railroad ComI1l1>"y ol'l,}fGeorge H. Eager, lis :contractor,beol'dered to file th,eir claims· in this court, duly proven. But those creditors ",ho, have. pfoce.!¥lings, a lienuPQn said property uuller the statutel\ ot the are pei'mitted' to prosecute saitI' suits to j tidgmellt, 'but nofu#he:!-"': This OJ;del' is granted without prejUdice to any pllrtyor corporatIon in ,interest' to plead, answer, ol"dEimur to said bill of V. E. McBee et alS';',.Ol' to any other appropriate proceedings in said cause." March H);O!S91, the'pentral TJ;ust Company)iled rin ahlendmEmt: its bill, in which It,avers "that, the defendant corporation was als9 fo!-"med qy the consolidation of the Marietta Railway Compimy corporation Uuly chartered under the laws of Gebrgia,an:d the Knoxville Southern RailrCla.d Company, chartered under: the'laws of 'the Central Trust Compll.lly,the Marietta & North Georgia Railwa)' Company', and the Knoxville Southtmi Railroad 'Company filed a demurrer fothe McBee bill, which was overruled by judge.'I,noverruling the demurrer he says:" ," "The bin is filed by mants of the Knoxville Souther'n Company, audIts ger,llral Scope'and purpose 'is to have enforced aU liens upon the property <if' the company, whicl1' isalJeged to be an insolvent corporatiottL The statutol'y liens 'by complainants and alleged toexist'in lfavor of .work allQ .labor done and materi,a.1 ,fur;tllshedare many ,oftM clilimed haya the liet)of the tha, which,theX;llntl'al Trust, (}ompanyof York filed ,its Rill fO,rce o,nJilnuary 13th, l89L 'fhepreserit complainants we,re nbt made ties to 'fhey thereforebting dwn suit to' the pri" ority of liens upon the Knoxville Southern Uailroaddeclai'ed, to:livoid·a,mul-
,8
M'BEE V. MARIETTA &: N. G. RY. CO.
24.5
tiplicity of suits, to save wa,ste and useless expense, and to have a single sale of the property. The bill may very properly be heard and considered with that of the Central Trust Company of New York, just as though complainants had intervened in the suit of the trust company for the purpose of asserting the priorities of the statutory lien claims. When the priority of liens are to be declared and adjusted, it is proper to bring all lien clai mants, so far liS possible, before the court having custody of theprol)erty and the authority to determine their relations and respective rights. This is the general ob· ject of the bill, and the general "nd special demurrer thereto are, in the opinion of the cour", not well taken." Afterwards the demurring parties answered the bill, but now the Central Trust Company comes and moves to dismiss the bill1. Because it is an original bill in equity, filed by persons claiming to be citizens of North Cll-rolina, against persons who are citizens of Tennessee, against citizens of the state of Georgia, against citizens of New York, and. against a citizen of Massachusetts. It isirue that section 1 act of August 13,,1888, as weUas that of March 3,1887, inregard to the jurisdiction of federal courts, provides that "no person shall be arrested in one districtfol' trial in another in any civil action before a circuit or district court, aod no civil suit 13hall be brought before either ()f said courts against any ,person by any original process or proceeding in any other district th8.nthat whereof he is an inhabitant." Section .5 of these acts, however,provides "that nothing in this act 'shall be held, deemed, or construed to repeal or affect any jurisdiction or. right ' mentioned in section 8 of the act of March 3, 1875," and that section :says "that when, in any suit commenced in any circuit court: of the United States to enforce any:.legal or equitable lien upon, or claim' to, or . remove any incumbrance,·}ien, or c1oudupon, real 'or personal property' within the district where,such suit is brought, one or moreiof the defendants therein shall not:be an inhabitant of or found·within said trict," such defendants may be made parties,and prescribes the method ·of bringing them into court. This suit is of the nature indicated in this -section, and such non-residents as have claims upon the property in lit-. igationare proper .parties to the suit. 2, 3. It is that to arrange the parties to the suit according to their interests in the subject-matter of controversy the result is that parties who are citizens of the same state are up6n both sides of the troversy. .Suppose we admit these facts as apparent from this bill, does' it follow that the bill should be dismissed? The complainant in the first to reach the entire proceeds bill, the Central Trust Coinpany, the property' in Tennessee for the satisfaction of its bonds., .and' plakes only one defendant to its bill, and that defendant, according to the bm, is not a citizen of Tennessee, and that defendant is not indebted to the ,clleditors of the KnoxvilleSouthem Railroad Company.. That company; . or any of its'debtors, are not mentioned in its bill, and, of course, are' not made' parties to it. The trust company prttyedtoconduct,its' suit aS'ancillary to its !fction in Georgia. Apparently there .is no dis· . pute or controversy the trust .company and the Marietta & North -Georgia Railway CompaQY. Both ,parties to the suit are interested in:
of
2'46
FEDERAL REPORTER,
vol. 48.
aV'oidingtbe\clatmsofthe creditors of the Knoxville SduthernRailroad ThC!se,,creditorssee that an effort is beipg mad,e the railroad on wblcb' they' claimed theirliens in the hands ofa receiver whose allegiallcebeionged to other parties and anotbet:. jurisdiction. Their debtor was not a party to the suit. They could ,not join the complainant, nor could they unite fortunes with the defendant. The prayer for ancillary jurisdiction was futile. Thejurisdiction of this court over the property within this state was as plenary as that of the court in Georgia over the property in that state. The suit of the Central Trust Company was an original,independent action or' bill in equity. Nothing is better settled than that a bill may be filed on the equity side of this court to regulate or restrain a judgment or suit at law in the same court. Such a proceeding is not an original suit, but ,ancillary and dependent and supplementary merely to the original suit; and such sbill may be main· tained without reference to the citizenship or residence of the parties. Logan v. Patrick. 5 Cranch{288j Dunn v. Olarke,8 Pet. 1; Olarke v. Mathewson, 12 Pet. 164;.Flreeman v. Howe, 24 How. 450-460j John81Yfl. , v. Oh:riatJian, 125 U. S. 642 t 8'Sup. Ct. Rep. 989; 1135. Nor is this all that may be done. cc So, too; in many instances, where the jurisdiction originally depends on the citizenship of the parties, if the proceedings happen to affect the interests of other persons not original parties, the latter 'rnay often be brought before the court, and made parties, spective; of their citizenship. This rule arises from the necessity of the case and to prevent fai1ure of justicej for since, when a court has once obtained jurisdiction of:a cause, it cannot suffer any' other court to disturb, its proceedings or interfere with property in its custody, a party if he could not be heard in the eourt whel'e the judgment was rendered, 'orin wbichthe property ishelJ, would be without redress." amwel1v.(hnid,ao.,4 Bissd.95j.HMyell,Fed. Dec. 249. In Minneaota R. ao.v. St. PaulR. 0,.,2 Wall. 609, it is held a bill in equity isneceilsary to have a construction of the orders, decrees, and acts of a United States ' court, the bill ,is properly filed in such court, as distinguished from any state courtj and that it may be entertained in such national court, even though the parties would not, for·\vant of proper citizenship, be entitled to proceed'by ()riginal bill of any kind in a court of.the United States. Mr. JusticeMILtElt, in delivering the opinion Of theco.Ql't, said: "In of in the of the receiver' ofthe court. If in the bandsofa receiv,er of the circuit ftourt, beplitiner than thatany.Utlgation for it,Spossession mnst take p)acein that court, without regard to the'dtlzt'nshipof' the parties... · The question la. Dot whether the prOCeeding is:aupplemental andanciHary, or is independent,and original, in the 'sense of the roiesof eqUity pleading, but whether it and prjs 60tlrl'1y new andorigl., oa1 in the sense JD whicq ,this court haB: sapqtioned wllb .reference to the , wlUch ,divides tbe jririsdil,iii?il' of the courtsfrt1m tbat of. the, Slate ,to tbe courts.' No one, for io'stance, would hesitate to say English chancery practice, ibiU to enjoin l,\Judgment atlaw is an origInal bill in the cbancery'sens&ol tlie;word,.yet'1:his coilrtblis' decided many times
M'BEE f1. MARIETTA &
G. 'RY; CO.
247
that when a bill is filedi n the circliit court to enjoin a; judgment of that court it is pot to be considered as ,an original bill, but a conUnnationof the proceeding,at law.'" ,
Krippendarj v. Hyde, llOU. 8 .· 276,4 Sup. Ctdliep.. ,27, supports by cogent reasoning the foregoing authorities. The cases referred to4ave reference to, judgments ,or suits at law assailed by proceedings upon the equity side 'of the court. Pacific Raif,. road v.Mi8souri Pac. By. .co. is of a different character. One Ketchum bad brought a suit in the United States cirouit court of the eastern district of Missouri to foreclose a mortgage on a railroad, making the railroad (acitizen of Missouri) and others, defendants.' There was a decree of sale, a sale, and its confirma.tion. The corporation appealed to.the supreme court, and the case was affirmed, April, 1880. In June, 1880, the corporation filed a bill in the circuit court above mentioned against another Missouri corporation, a citizen of Missouri, and other citizens of Missouri, alleging fraud in fact in the foreclosure suit. This bill was filed to impeach a de9ree An, all; equity <:a\lse,.!lnd the parties on both sides were citizens of Missouri. Upon demurrer the court said: "Upon the.qllestioD of jUrisdiction there can ;be'nodoubt that the circuit court. as the court which made the Ketchum decree. and had jurisdiction of the Ketchum suit, as this court in Railroad V.' Ketch'Um. 101 U. S. 289", bald U'liaMbu jurisdiction toent't!rtain the present suit to Bet aside that decree 91'1 the grounds alleged in it they shall be as facts, arid jf there ,baH. be novalid,defense to the- suit, .altlwugh the ,plaintiff and some of the defendants are citizens of Missouri. Thisbill·'faIIBwithin recognized c. .. h,av.e. .g .. th I,S... C.o.t.l.rt., alld .. b. .. reCeD.,.tl Y 're'. ,vlew:ed. reaffirmed in KrlpPendorf,v:HlIde. 110'0'.8.276. 4 Sup. Ct. Rep. 27·. ' On the question' of jurisdiction the suit may be regarded 118ancillary to. the Ketchum suit, BO that the relief sought maybe granted bytbe court wbich made without regard to thecitlzenship of :l'hepres(ltJt so far of the of an original;sliit as to ,be subject to the rules in rfilg,ard to the service o[prpcesB whic/,lllre laid dowDbyMr.· Justice MILLER in Pacific Railroad v.,MilJsouriPac. R1J.Oo·· 1 M9Cl'ary.647. The bill. orlgitllllbllI in the of the word, is acontin uation oltbe formeulJit on tbe queWon of the jutiildiction of the court." 111 U. S. 521, 522, 4 Sup. Ct. Rep. 583. ' If 8.iCOUl'1l of.eqooyhas thelinherentauth6rity to impeach and set .aside' its atatedinthis 'case,may'not the court, by like appropriate proceedings, preventthe renditioll ora wrongful decree2 When·the CentndTrust Company came into this court voluntarily for pnrpose· of :prosecritiilg, its suit·:andobtaining a'decree, it made itself thereby subject to any control the court may find it .equitable tciexerdiseover its suit:and ovedhe matters involved in it, to the extent that no wrong or injustice may be done to If the righteiand interests oi:third persons should bedome complicated with the litigation in regard to the subject.matter ,of the suit or any property in the custody, of the COUTt;! or any:abuse Qr misapplication ofHs prooeSs, . and nostllte or other ponrthas pow.er to gUiLrd or determinethoserightl! and, interests without 81 conflict 011:authority i especially if it be's federal the' national courti necessity'of ,the and to 'p'revent
248
a failure ofjustice, will give such third parties a hearing, irrespectiv at their Equity regards the substance, ratber than tbe form, of things. The rights and priorities of the parties to the property in tbe hanps of the receiver can be ascertained, declared, and enforced under the existinjZ bills as effectually as in any form of proceeding that might be adopted; and the, McBee bill may, without any strain upon the principles and definitions· announced by the supreme court, be ragarded;as aU'xiliary to and dependent upon the bill of the Central Trust Company. The' conclusion reached is that the motion to dismiss the McBee ,bill should be It follows also that the demurrer to and'tbe motion to dismiss the amended bill in the McBee Oase sbould both be overl'uled, and 80 ordered.
REND '11.
OIL
Co.
(C1IrCtitt Court, W. D. PetI/MI/Wama. November 18·.1Il9L) LPBlILIMIlIrART
of an oil or gas well through a part of a coal mine from whioh allthe coal'J;iasbeen extraotedexoept what is necessary for the pmps would not by its physical damage tothe mine, or its effect as an obstruction, threaten such an iDjur,. tc:f the ooal and the right to mino it as would warrant the issuanoe of prelhninary injunction:
KINEIl-SINKING OIL AND GAS WELLS.
.. BAlIfB·
. injunction will no,lsBue 14 !'eBtrain Interference with certain deep.lylng veins. where on the affidavits it appears doubtful whe'ther those veins extend under the tract. ' , ,' "
& SAldE-Al!TIDAVITIl.
A preUmineory injunctlou ,will not be IsBued upon numerous amdavits by miners, engineers, Ilnd, chemists tb.erewoUld be great danger of explosions in the mine fromtheelJcape of gas througb leak.sln 1\Mcaslnglikely to be caused by the falling of rockll 01' thell1lppinR' afthe earth· above. and from corrosion ,thereof by sulphur water. wl1enthese averments are contractiotedby numerous a:tndavitsequally enti1\ledto OJ'Eldlt; espec!allYBo In view, of the fact that speoial precautions are to be taken.in th!sinstance to prevent leaks, and the rurther fact that there is much douht as to the respective rijchts of and the owner of the fee.
In Equity. Bill by William·P.Rend against the Venture Oil pany to restrain'it from drilling a well througbhis coal ,mine. On motion for preliminary injunction. Overruled. D. T. WatBonjJ. S. F6l'gu8Dn, and John G. MacConnell, for tbemotion. D. K Patterson, W. F. McCook, and A. M. Todd, opposed. REED, J. The bill alleges that plaintiff, engaged in the business ing coal, is.tbe ow-ner ofall the coal underlying a tract oiland in Allegheny county, Pa;,.togl3ther with a perpetual right ofway,orright to use the under-ground entries for the removingofsaid coal, or any other coal for which said entrieS may be cOllv.enient, and tbe right to construct any shafts that migbt be necessary or useful for, air and drainage purposes b the mining of said coal; that he is the owner of aU the veins (j)f coal under said land, including the Pittsburgh vein, the Freeport vein"and the Kittanning