39 F. 719 -

HEWITT V. STOREY.

719

not met those denials with any. proof, or even made an issue thereon by replication, the bill must be dismissed for want of equity. A decree will be entered accordingly.

HEWITT V. STOREY et

al.

(Oircuit Oourt, S. D. California. September 23, 1889.)
CORPORATIONS-AcTIONS BY AND AGAINST.

Code Civil Proc. Cal. § 388, provides that "when two or more persons, associated in any business, transact such business under a common name, whether it comprises the names of such persons or not. the associates may be sued by such common name." Held, that a bill to enjoin interference by defend· ants with complainant's alleged right to divert water from a stream, against the "South Fork & Sunnyside Division of the Santa Ana River," which, it appears, is an association formed and existing pursuant to the laws of California, is sufficient, without making the owners and stockholders thereof parties.

In Equity. On bill and answer. RoweU & Rowe/], and John Albright, (A. W. Thompson and Brousseau & Hatch, of counsel,) for complain!\nt. Curtis & Otis and Byron Waters, (R. E. Houghton, of counsel,) for defendants. Ross, J. Certain of the defendants to this suit having by amended answers objected to the amended bill of complaint that it is defective for want of parties, the cause was, on motion of complainant, set down {(no argument on those objections, pursuant to equity rule 52, and the objections, having been argued by the respective parties, are now to be determined. The purpose of the suit on complainant's part is to establish as against the defendants his alleged right to 333i inches of the water of the Santa Ana river, measured under a 4-inch pressure, diverted at a certain specified point by means of a certain ditch, called the "Berry Roberts Ditch," and to obtain an injunction enjoining defendants from interfering therewith, To the original as well as the amended bill a large number of persons are made defendants, as also certain corporations, among them the North Fork Water Company, and a certain association, styled the" South Fork & Sunnyside Division of the Santa Ana River," which is sued as, and alleged to be, an association formed and existing pursuant to H:e laws of the state of California, and "composed of some or all of the aforesaid defendants and other persons unknown to your orator," and transacting business under that name in San Bernardino county, in which county the water in dispute is situated. The bill, as amended, alleges thatQn and after March 10, 1869, certain named persons, under and by virtue of the laws of the state of California, acquired by appropriation 500 inches of the water of the Santa Ana river, measured under a 4-inch pressure, which they diverted at a certain

720

FEDERAL REPORTEn,

vol. 39.

named point by means of a certain ditch, known as the "Berry Roberts Ditch," and that the complainant subsequently acquired from those appropriators 333t inches of said water, measured under a like pressure, with the right to divert the same at the same point through the same ditch. The bill, as amended, further alleges that at the time of the construction of the Berry Roberts ditch, and of the appropriation under which the complainant claims, the defendant corporation, the North Fork 'Vater Company, or its predecessors in interest or grantors, and the defendant association, the South Fork & Sunnyside Division of the Santa Ana Rh'er, or its predecessors in interest or grantors, were the owners of two certain other ditches commencing in said river and conveying water theretrom, and were the only persons who had acquired any right to the use of the water of the Santa Ana river prior to the right of complainant and of those under whom he claims; that the rights of the said named defendants were acquired by them, or by their predecessors in interest, by prior appropriation, under and in pursuance of the same laws of the state of California, and extended only to the amount of 200 inches of water, measured under a 4-inch pressure, for each of the lastnamed ditches. It is further alleged in said amended bill that the Santa Ana river is an unnavigable stream of running water, flowing through sundry wild canons or ravines in the San Bernardino mountains, and emerging therefrom into the San Bernardino valley through the mouth of a i"teep ravine at or near its eastern boundary; that from time immemorial the waters of the said river have been, and are now, for many miles above and below the head of the Berry Roberts ditch, held and owned exclusively by right of appropriation, and used generally for the purpose of irrigation; that the land of the complainant lies in the said valley, and, in common with certain lands of the defendants, is incapable of cultivation without water; that at certain dry seasons of the year the said river contains at and between the head of the Berry Roberts ditch and the mouth of the ravine aforesaid little more than sufficient water to supply the above-mentioned prior appropriators and complainant with the quantity of water to which they are respectively entitled, but does at all times contain sufficient to supply the said prior appropriators and complainant to the extent of their respective rights. The amended ans,vers, referred to herein, among other things, deny that the North Fork Water Company and the South Fork & Sunnyside Division of the Santa Ana River are only entitled to 200 inches each of the water of the Santa Ana river, but, on the contrary, aver the said named company and assoeiation to be entitled to the entire flow of the water of the river, measured ata point about two miles above the head of the Berry Roberts ditch, and which water, it is averred, is owned by said company and association in equal proportions, and is in the aggregate greatly in excess of 1,000 inches, measured under a 4-inch pressure. And the said amended answers fu.rther aver that the amended bill is defective for want of proper parties defendant in this: that certain named per"ons and corporations, who now are, and at the time the original bill was filed were, owners and shareholders in the South Fork & Sunnyside

HEWITT 'V. STOREY.

721

Division of the Santa Ana River, are not made parties defendant to said amended bill, and that certain other named persons, who were made parties defendant to the original bill, and who were owners and shareholders in said South Fork & Sunnyside Division of the Santa Ana River, have died since said original bill was filed, and that their legal representatives, who now are owners and shareholders in said South l!'ork & Sunnyside Division of the Santa Ana River, are not made parties defendant to the amended bill. This statement embraces such portions of the pleadings as are necessary to be stated for the determination of the point now made. The question is whether all of the owners and shareholders in the South Fork & Sunnyside Division of the Santa Ana River-which is alleged in the bill and admitted by the answers to be an association formed and existing pursuant to the laws of California, and transacting business under that name in the county of San Bernardino, where it has its place of business-are necessary parties to the suit. The circumstance that some of the persons made defendants are allel!;ed to be shareholders in the association does not affect the question. The complainant, by his bill, does not seek to avail himself of the rule that applies where the parties are too numerous to be brought before the court or where the question is one of common or general interest of many persons. The allegation that certain of the defendants are shareholders in the association may be disregarded if it be true, as contended by complainant, that all of the shareholders are suable by the common name under which it is alleged and admitted they associated themselves and are doing business. In controversies concerning the title to real property the federal court always administers the law as if it was sitting as a local court of the state. Olcott v. Bynmn, 17 Wall. 57; Slaughter v. Glenn, 98 U. S. 244. The nature of the property in controversy here is such as to make the same by section 388 of the Code of Civil Procedure of rule applicable. California it is provided that" when two or more persons, aSf!1Ociated in any business, transact such business under a common name, whether it comprises the names of such persons or not, the associates may be sued by such common name, the summons in such cases being served on one or more of the associates; and the judgment in the action shall bind the joint property of all the associates in the same manner as if all had been named defendants and had been sued upon their joint liability." In this case the association in question was sued by its common name, the South Fork & Sunnyside Division of the Santa Ana River, and as such appeared and answered, putting in issue the averments of the bill respecting its alleged interference with the complainant's rightR, and respecting tile quantity of the water of the Santa Ana river to which it is entitled. It is the acts of the association, as such, of which the complainant, among other things, complains, and it is the rights of the association, as such, that are, among other things, put in issue by the pleadings. A decree favorable to the association would inure to the benefit of all of its members, and one adverse to it would, in my judgment, bind all of them. 01Jjections disallowed. v.39:b'.no.14-46

722

FEDERAL REPOR1ER"vol.

39.

SNYDER

v.

etux.

(Circuit Court, N. D. illinoi8. July 22,1889.)
FRAUDULENT CONVEYANCES-CONSIDERATION.

The wife of the manager of a corporation borrowed $600 from a stockholder, and bought ,half of the capital stock. This Wll.S all the money ever put into the business by her or her husband., From the earnings of the business, conducted entirely by the husband, 'real estate was bought, and title taken in the wife's name. Held, that the land, being acquired entirely by the labor of the husband, was liable for his debts existing at that time.

In Equity. Creditor's bill. G. F. Westover, for complainant. Bisbee, Ahrens & Decker, for defendants.
BLODGETT, J., (orally.) This is a creditor's bill by which the complainant seeks to reeover the amount of a judgment rendered in favor of the firm of which the complainant is the surviving partner against the firm of Lawrence & Martin on property, the title'to which stands in the name of the defendant Carrie E. Martin, the wife of the defendant Morris T. Martin. It appears from the proof in the case that the defendant Carrie E. Martin holds the title to the real estate in question, and that all the said real estate was t)aid for with money earned in the business of the Phcenix Grain & Stock Exchange, a "bucket-shop" concern in this city, of which the defendant Morris T. Martin was the manager. Mrs. Martin never invested any money in this corporation. She became a subscriber to one-half the capital stock of the company at the time it was formed. She borrowed, as the proof shows, from one of the stockholders the sum of $600, which was all the money that was ever put into the business, as far as the Martins were concerned. From the earnings of this business-the business which was conducted by Martin as its manager-the $600-note was paid and the real estate in question was bought and paid for, the title simply being taken in the name of Mrs. Martin. The defendant Morris T. Martin being in debt to the complainant at this time, I do not think he could secrete his earnings in the name of his wife to the delay or in fraud of his creditors. This is property that has not been earned or acquired by any effort or instrumentality of Mrs. Martin, nor is it the outcome of any investment by her; but it has been accumulated solely by the shrewd conduct and business ability of Morris Martin himself. There will be a decree in favor of the com· plainant.