DONAU BREWING CO.
MANGELS v. DONAU' BREWING CO. et al. (Circuit Court, D. Washington, W. D. November 23, 1892.)
FEDERAL COURTS-JURISDICTION-DIVERSE CITIZENSHIP.
A mortgage bondholder sued for a foreclosure, in behalf of himself and all the other bondholders, and the latter, though not made parties, intervened, by leave of court, and prayed a foreclosure. The controversy consisted of a cluster of questions, involving the validity of the mortgage, and the right of the bondholders to foreclose it. Held, that all such bondholders were indispensable parties, and, in determining the jurisdiction 01 the court, they were all to be considered as parties plaintiff; and, it ha,,· ing appeared that one of them was a citizen of the same state with several of the defendants, the jurisdiction failed. Stewart v. Dunham, 5 Sup. Ct. Rep. llfl3, 11:) U. S. G1, distinguished.
In Equity. Bill by John Henry 1tfangels against the Donau Brewing Company and others to foreclose a mortgage given to secure the payment of certain bonds. "On demurrer to the amended bill. Demurrer sustained, and suit dismissed. Prichard, Stevens, Grosscup & Seymour, for complainant. J. M. Ashton and Crowley & Sullivan, for interveners. Galusha Parsons, for demurrant. HANFORD, District Judge. A citizen of California, being the owner of part· of a series of bonds, brings this suit in behalf of himself and all the other owners of said bonds, to foreclose a realestate mortgage given to a trustee to secure the same, alleging that default has been made by the mortgagor, and that the trustee has refused to commence foreclosure The mortgagor is a corporation organized under the laws of this state for carrying on the business of a brewer. Said trustee is a citizen of this state. The bonds issued are 120 in number, each for $500. The plaintiff holds but 20 of them, and in his bill avers that all of the series were sold and delivered, but that the names of some of the purchasers are unknown to him. The pleader seems to have been careful to so frame the bill as to not allege that all the purchasers of said bonds, not held by himself, are unknown to him, and to avoid saying anything as to the names, citizenship, or places of residence of the present holders of the other bonds. The mortgagor and trustee are made defendants; also several other corporations and individuals, who art' alleged to have or claim interests in the mortgaged property, the nature of which interests are unknown to the complainant. None of them arc alleged to be bondholders, and it is not alleged that any of the other bondholders have refused to be joined as plaintiffs, nor that those who are known to the plaintiff have been made parties to the suit, nor that it is impracticable to do so. The other bondholders have, however, by leave of the court, intervened, and they are now, independently of the plaintiff, in court, asking to have the mortgage foreclosed. Their petitions on file show that one of said interveners, holding the major part of said bonds as collateral security for a debt, is a foreign corporation, authorized to transact business in the state of California, and having an office there; and the other intervener, v.53F.no.5-33
by whom all the remainder of said bonds are now owned, is the tional Bank of' Oommeree'(!)fTMoma,'a, eitizenof this state, In so far as ita afj:ectlil·· question of .. The Washington National Bank, a defendant, having some interest in the case, th.e of. W:w.ch is <iiseloselllhas .demurred to the complainant's fl,mendeq bill, sev,eral'grounds therefor. On the argument many 'questions ,subordinate to the main question of juri.'ldic. tion were' discussed. but it is not necessary for me to decide or refer The only ground upo:p. it can be sl,lpposed that a United States circuit court can take ,jurisdiction of this case is to be found. in the the' case involves:a controversy between citi· zens of different states. Whether or not the facts appearing by the record jl;l,stify this assp.mption is the only questiQnrequiring a deci· sion. Inordel' ,1;0 decide $,at question I am required to arrange the parties ,on; .the controversy, according to their reo spective interests and contentions. When so arranged, it must ap· pear "that those on o:p.eside are all citizens of different states from those on the other,'" or the jurisdiction mustbQ denied. Removal Cases, 100 U.S. 468. Now I find the subject of the controversy in this case to be the mortgage. The controversy'may be stated to be a cluster of questions, as to the existence and validity of said m,ortgage, and right of the bondholders to 'foreclose it. All of said bond· holders are necessarily parties to the controversy. As beneficiaries under the mortgage their interests are joint, and a foreclosure cannot be decreed without, aIj. 'a(ljtidication affecting all of them. They are aJl, therefore, indispensable parties to the suit. 2 Jones, :!\Iortg. §§ 1367, 1368, 1383--1385;8ee, also, Gregory v. Stetson, 133 U. S. 579,' 10 Sup. Ct. Rep. 422, in which the supreme court of the United States, speaking by Mr. Justice Lamar, says:
"It is an elementary principle that a court cannot adjudicate directly upon a person's right without having him either actually or constructively be,
The position of the interveners as bondholders has the same bear· ingupon the question at issue, whether they appear in the case per· sonally or constructively, through an authorized representative. C hold that, as the plaintiff assumed to act in behalf of all the bondholders in bringing the suit, the other bondholders are to be regarded as quasi parties from its inception, (19 Amer. & Eng. Ene. Law, 750;) and the plaintiff stands as-their representative, instead of the trustee, . who, by his refusal to act, has, in effect, disclaimed authority. Whether this is so or not, the bondholders are all parties to the con· troversy, and they must be taken into account in considering whether or not there is in the case any controversy between citizens of different states; and they must aJl be placed upon the affirmative side. Arrayed against them are the mortgagor and all the other defend· ants in the case. We have, therefore, on one side of the controversy a citizen of California, a foreign corporation, and a citizen of the state of Washington; and upon the opposite side are citizens of the state of Washington and citizens of several other states. There being on
ii.EmV· 01' SPOKANE·.
one side a citiZen of this state, and on the opposite side 'several citizens of the same state, is not, according to the rule given by the supreme court, one in .which there is involved a controversy between citizens of different states, and the demurrer must be sustained for 'want of jurisdiction. Blacklock v. Small, 127 U. S. 104, 8 Sup. Ct. Rep. 10tl6. The case is distinguishable from Stewart v. Dunham, 115 U. S. 61, 5 Sup. Ct. Rep. 1163, by the important consideration that in this case the primary object of the suit is to obtain an adjudication which must necessarily affect directly the interests of the interveners; whereas in the case referred to, which was a creditors' bill, the action of the court upon the petitions of intervening creditors, who claimed no liens upon the assets of the defendant, was merely incidental and ancillary. The question whether the court has jurisdiction of the case must be determined in the light of all the facts shown by the record at the time of the hearing. I am therefore constrained to hold that, although the demurrant does not appear to have such an interest as to entitle him to complain of a defect of parties, nevertheless, as it now affirmatively appears that the court is without jurisdiction, the case cannot proceed in this court. Morris v. Gilmer, 129 U. 15. 325, 9 Sup. Ct. Rep. 289. Let there he a decree of dismissal.
CLA PP v. CITY OF SPOKANE et 01.
(Circuit Court, D. Washington, E. D. October 29, 1892.)
STREET RAILWAy-DAMAGE TO FRANCHISE BY CONSTRUCTION OF SEWER.
Tile location of a sewer in a city street must be reasonable, with respect to the rights of a street railway, the construction of which was authorized by a prior ordinance, and whose property might be damaged by the construction of such sewer; and such location, if made In a part of the street occupied by the railway, lilO as to compel it to suspend operations, and inIDct great damage upon it, is unreasonable, when other parts of the street are equally suitable fot' the sewer. But the city is not required to incur any additional expense by reason of having authorized the building of such road.
2. SAME-RIGHTS OF MORTGAGEE.
A mortga!;e upon a street railroad Is as much entitled to protection from unlawful Injury by such action on the part of a city as any other kind of property. An allegation by the mortgagee that such action will impair the value of his security to an amount exceeding $2,000 is sufficient to give jurisdiction to a federal circuit court.
CIRCUIT COURT-JURISDICTIONAL AMOUNT.
4. MUKICIPAL CORPORATIONS-'LoCATION OF SEWERS-VESTED RIGHTS.
The and General Statutes of the state of Washington provide that the people or cities may frame and establish a charter for the thereof, and aiso confer upon cities, in general terms, the powers of mWllclpal corporations, and grant certain powers and certain restrictions, in specific terms, but do not contain any specific grant of power to locate sewers. After the rights of the mortgagee of a street railroad had become vested, a city adopted a charter containing a specific provision tIiat the city should have power to locate sewers. Held, that such power existed only by virtue of the pro\ision of the general statute giving cities power to control their streets, pro\ide for the health and general welfare of their inhabitants, and that its exercise must be reasoll.'lble with