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instituted under a statute of the state of Nebraska permitting suit to be brought by any person, whether in actual possession or not, claiming title to real estate against any person who claims an adverse estate or interest therein, for the purpose of determining such estate or interest and for quieting title to such real estate. With the learning which characterizes all the opinions of that truly great jurist, Justice Field speaks of the growth of statutes permitting recovery of the possession of real estate, granting relief in equity where formerly no relief could have been had. He proceeds to demonstrate that the statute of Nebraska is certainly for the interests of the state, and declares that it is for the interests of the community that conflicting claims to property sitúated as was the particular property in that case should be settled so that it might be subject to use and improvement. “To meet cases of this character,” he says, "statutes like the one of Nebraska have been passed by several states, and they accomplish a most useful purpose; and there is no good reason why the right to relief against an admitted obstruction to the cultivation, use, and improvement of lands thus situated in the states should not be enforced by the federal courts when the controversy to which it may give rise is between citizens of different states." He reviews the earlier decisions of the Supreme Court, particularly Clark v. Smith, 13 Pet. 195, 10 L. Ed. 123; The Broderick Will Case, 21 Wall. 520, 22 L. Ed. 599; and quotes from Pomeroy's Equity Jurisprudence, § 1398.
The Legislature of the state of Montana has a right to say that in an action for the protection of water rights a plaintiff may make all persons who have diverted water from the same stream parties to such action, and that the courts of the state may in one judgment settle relative priorities and rights of all the parties to such action; and, having so provided, are not the federal courts by conforming to the state practice but applying their mode of proceeding to the enforcement of il remedy substantially consistent with the ordinary modes of procecding in chancery? Propriety and convenience are greatly promoted by pursuing the practice of the courts of the state, and if there be nothing in the character of the equities recognized by the state statute or the remedies prescribed which interfere with what legitimately pertains to the chancery practice, the federal courts will deal with controversies instituted under a state statute, so as to give effect to state legislation and state policy. Clark v. Smith, 13 Pet. 195, 10 L. Ed. 123. It is manifestly a good thing for the agricultural interests of the state that water rights be adjudicated. The settlement upon, and cultivation of, lands in Montana depend largely upon the water rights available for irrigation purposes. As the population of the state has increased, the values of water rights have become greater. To avoid tedious and expensive litigation, involving the usufruct of the water of a stream whence many settlers may claim rights, the statute cited was passed, and I believe bench and bar will agree that its use has been fully demonstrated. Under its procedure the courts have been enabled to hear and determine very many important water right suits, and to make final decrees fixing the rights of parties to the use of the waters of various streams in Montana. System and quiet enjoyment are thus
had, and property rights are being settled to the satisfaction of those concerned. Now, why may not this right to bring all parties in and administer full relief be administered by the Circuit Courts of the United States as well as by the courts of the state?
In the case of Broderick’s Will, 88 U. S. 503, 22 L. Ed. 599, Justice Bradley said:
“Whilst it is true that alterations in the jurisdiction of the state courts cannot affect the equitable jurisdiction of the Circuit Courts of the United States so long as the equitable rights themselves remain, yet an enlargement of equitable rights may be administered by the Circuit Courts, as well as by courts of the state. And this is probably a case in which an enlargement of equitable rights is effected, although presented in the form of a remedial proceeding. Indeed, much of equitable jurisidiction consists of better and more effective remedies for attaining the rights of parties.”
In Greely v. Lowe, 155 U. S. 58, 75, 15 Sup. Ct. 24, 39 L. Ed. 69, Justice Brown wrote:
“This court has held in a multitude of cases that where the laws of a particular state gave a remedy in equity, as, for instance, a bill by a party in or out of possession to quiet title to lands, such remedy would be enforced in the federal courts if it did not infringe upon the constitutional rights of the parties to a trial by jury. Clark v. Smith, 13 Pet. 195, 10 L. Ed. 123; Holland v. Challen, 110 U. S. 15, 3 Sup. Ct. 495, 28 L. Ed. 52; Reynolds v. Crawfordsville Bank, 112 U. S. 405, 5 Sup. Ct. 213, 28 L. Ed. 733; Chapman v. Brewer, 114 U. S. 158, 171, 5 Sup. Ct. 799, 29 L. Ed. 33; Cummings v. National Bank, 101 U. S. 153, 157, 25 L. Ed. 903; United States v. Landram, 118 U. S. 81, 6 Sup. Ct. 954, 30 L. Ed. 58; More v. Steinbach, 127 U. S. 70, 8 Sup. Ct. 1067, 32 L. Ed. 51. This suggestion is the more important in view of a statute of Florida which authorizes a court of equity in partition cases 'to ascertain and adjudicate the rights and interests of the parties,' which has apparently been held to authorize the court, in its discretion, to settle the question of title as incidental to the main controversy, or retain the bill, and refer it to a court of law. Street v. Benner, 20 Fla. 700; Keil v. West, 21 Fla. 508.”
In Grether v. Wright, 75 Fed. 742, 23 C. C. A. 498, after a careful review of the decisions of the Supreme Court, Judge Taft said:
“We think this review of the cases justifies the conclusion that the main purpose of section 723 Rev. St. [U. S. Comp. St. 1901, p. 583] was to emphasize the necessity for preserving to litigants in courts of the United States the right to trial by jury secured by the seventh amendment in suits at common law, and that, where a state statute grants to litigants in its courts an equitable remedy which does not impinge on their right to a trial by jury at common law, courts of the United States, sitting in the state as courts of equity, may grant the same statutory relief as that afforded in the state tribunals. such cases, where the right of jury trial is not interfered with, the equitable remedy afforded by the statute of the state is usually so much more complete than the old remedies that the language of section 723 interposes no obstacle to equitable jurisdiction in the federal courts."
In Southern Pine Co. v. Hall, 105 Fed. 84, 44 C. C. A. 363, Judge Shelby, speaking for the Court of Appeals of the Fifth Circuit, said:
“An examination of the cases will show that the jurisdiction in equity in the United States courts to enforce statutes enlarging equitable remedies depends on the question whether or not the enforcement of the statue deprives a party of the constitutional rigbt of trial by jury. Section 723 of the Revised Statutes of the United States, and the law as administered without regard to this statute, forbid equity to take jurisdiction where there is a plain and adequate remedy at law. If the record in this case showed that the de
fendant was in actual possession of the lands, so that an action of ejectment could have been brought against her for the lands, then it would appear that there was an adequate remedy at law, and jurisdiction in equity would not exist in the United States courts, although the statute conferred such jurisdiction on the Mississippi state courts. Whitehead v. Shattuck, 138 0. S. 146, 147, 11 Sup. Ct. 276, 34 L. Ed. 873. The result of the decision of the Supreme Court is that a state statute which enlarges equitable rights will be enforced and administered in the United States courts in all cases where its enforcement and administration do not conflict with the right of the parties to a jury trial. Clark v. Smith, 13 Pet. 195, 10 L. Ed. 123; In re Broderick's Will, 21 Wall. 503, 22 L. Ed. 599; Hipp v. Babin. 19 How. 271, 15 L. Ed. 633; Thompson v. Railroad Co., 6 Wall. 134, 18 L. Ed. 765; Insurance Co. v. Bailey, 13 Wall. 616, 20 L. Ed. 501; Grand Chute v. Winegar, 15 Wall. 373, 21 L. Ed. 174; Buzard v. Houston, 119 U. S. 347, 7 Sup. Ct. 249, 30 L. Ed. 451. See, also, Harding v. Guice, 25 C. C. A. 352, 80 Fed. 162: Green v. Turner (C. C.) 98 Fed. 756. To review and quote from these cases would serve no useful purpose. That work has already been done by Judge Taft, speaking for the United States Circuit Court of Appeals for the Sixth Circuit, in Grether v. Wright, 23 C. C. A. 498, 75 Fed. 742."
Reference was made by me during the argument to a recent ruling I had made in the case of the United States against the Conrad Investment Company. The point there decided, however, has little relevancy to the questions here involved. That was a bill in equity filed by the United States against the Conrad Investment Company to restrain it from maintaining a dam, which it had erected upon the lands of the United States, and by means of which it was preventing the Indians upon one of the reservations of the United States from enjoying the use of waters, all of which were claimed by the United States as necessary for the irrigation of lands within the reservation, and belonging to the complainant. The defendant moved the court to order the complainant to make certain persons, strangers to the original suit, parties defendant. The defendant made no sufficient showing that its rights would be affected by making such persons defendants, but argued that they should be brought in, in order that there might be a complete adjudication of the alleged rights, not only as between the original parties, but between the United States and other persons who were settlers claiming right of use of waters of the stream which had been dammed by the defendant company. It was reasonably clear that the persons defendant asked to have made parties were not necessary or proper. The matter in litigation between the United States and the Conrad Investment Company did not seem to be one which in any way necessarily concerned persons other than the original parties; hence, relying upon the doctrine of Union Mill Mining Co. v. Dangberg (C. C.) 81 Fed. 87, I held the complainant had a right to bring only such parties before the court as interfered with its rights. The principle of the case is that, where no relief is sought against persons who are not connected in interest with the subject-matter of the suit, they should not be made parties to the litigation. The rule, however, that a complainant cannot be compelled to amend his bill and bring in new parties, who are not indispensable or necessary or even proper parties to the action, as disclosed by the bill of complaint, rests upon reasons very different from those which underlie the practice which allows parties, who are before the court by action of complainant, and
who are already within its jurisdiction, and who have an interest in the subject of the litigation, to assert rights, as against complainant and one another, provided the subject-matter concerning which affirmative relief is sought is directly connected with that involved in the principal action, and is germane thereto. In the one case complainant only asks relief against those whom he makes parties defendant, while in the other he is asking relief against those whom he has chosen to make parties, and they, in turn, when brought into court, ask affirmative relief against complainant and all parties to the suit who may be interfering with their alleged rights.
Van Bibber v. Hilton et al., 81 Cal. 585, 24 Pac. 308, was an action to restrain defendants from diverting the waters of a stream which flowed through the lands of both parties. Defendants by cross-complaints asked affirmative relief against plaintiff.
plaintiff. The court stated the question in this language:
“Did the defendants in what are called the first and second cross-complaints seek affirmative relief thereby, affecting the property to which the action relates ? The action relates to the waters of the stream, the right to the use of which the plaintiff claimed as a riparian proprietor, and the defendants in that capacity and as prior appropriators. * * The right to the same water, the same property right, was involved in the action as brought as in the cross-complaints; and therefore a cross-complaint was the proper pleading, as we think, in which to set up the facts and claim the affirmative relief. There were then causes of action stated in the cross-complaints proper to such pleadings," etc.
Ayres v. Carver, 17 How. 591, 15 L. Ed. 179, is relied upon by defendants' counsel. But I do not regard the doctrine of that case as directly applicable to a case like that now before us. The court there treated the claims of certain codefendants cross-complainants, who were citizens of the same state, as forming no portion of the issue of the original suit. Justice Nelson said.
"As it respects the cross-bill, it may be proper to observe that the matterg sought to be brought into the controversy between the complainants in that and their codefendants do not seem to have any connection with the matters in controversy with the complainant in the original bill. Nor is it perceived that he has any interest or concern in that controversy. These two complainants in the cross-bill set up a title to the lands in dispute, which, they insist, is paramount to that of their codefendants, and seek to obtain a decree to that effect, and to have the possession delivered to them. This is a litigation exclusively between these parties, and with which the complainant in the original bill should not be embarrassed or the record incumbered. The same matter has been set up in their answer to the original bill, against the equitable title claimed by the complainant, presenting the only issue in which he is interested, and upon which the questions between them can be heard and determined."
The case turned upon the point that there was perceived no interest by complainant in the controversy between defendants. By implication, if there had been any perceptible interest, the cross-bill would have been sustained. But, as I have shown, in controversies over the right to use the waters of a stream, where complainant makes a number of persons parties, as he has a right to do, it becomes a very decided concern of his, and of codefendants as betwen themselves and him, as to how the rights of cross-complainants may be settled, inasmuch as
the relief afforded them by definitely establishing their rights of user may so affect the use of the waters of the stream that complainant will have no enjoyment of any portion of it at all; his claim being subordinated, perhaps, to rights decreed to other parties. It would needlessly extend the length of this opinion to cite further authorities upon the general doctrine enunciated by those to which I have referred. They are enough to demonstrate as a principle that this court, having jurisdiction of the suit by reason of diversity of citizenship, may administer the substantial right conferred by the statute of the state, and accord the remedy which may be prescribed thereby.
The several defendants, who have answered only, urge that, the jurisdiction of this court being limited to controversies between citizens of different states, and the jurisdiction in this case being based upon the diversity of citizenship between complainant and defendants, the court will not retain the cross-bills, which seeks to obtain a decree determining the relative rights of the parties to the waters of the stream out of which complainant claims its rights, if diversity of citizenship is lacking between cross-complainants and other codefendants. The weight of authority is against the contention.
In First Nat. Bank of Salem v. Salem Capital Flour Mills Co., and others (C. C.) 31 Fed. 580, it was contended that a cross-bill could not be maintained on account of the citizenship of the parties thereto, because the cross-bill made a case between several parties, all of whom were British subjects. That was a suit in equity to enforce the lien of a mortgage. The action was brought by the First National Bank of Salem against the Salem Capital Flour Mills Company, Stuart, Mcdonald, and Kelly, to enforce the lien of a mortgage given to the bank by the flour mills company on certain property in Oregon. Plaintiff was a citizen of Oregon. The defendant company, Stuart, and McDonald were British subjects, and the defendant Kelly was a citizen of Rhode Island. Stuart held a mortgage on the same property, and there was included in Stuart's mortgage certain other property besides, not included in plaintiff's mortgage. The complaint alleged that the defendants McDonald and Kelly pretended to have an interest in the property by reason of certain judgments which had been obtained in the courts of the state of Oregon, and which were in litigation by suits which had been instituted in the state courts, but thereafter removed to the Circuit Court of the United States for the District of Oregon. The defendant Stuart filed a cross-bill against plaintiff and his codefendants in the original bill. He alleged that the City of Salem Company was an Oregon corporation, and had borrowed certain moneys from him, evidenced by promissory notes and mortgage, and that the mortgage covered the property included in the mortgage to the plaintiff, except a certain tract, which was intended to have been included therein, and which was mortgaged to the defendant by the Salem Capital Flour Mills Company, successor in interest of the City of Salem Company. In the cross-bill it further was alleged that the defendants Kelly and McDonald pretended to have an interest in the mortgaged property by reason of certain judgments in their favor, and that they (Kelly and McDonald) claimed that defendants' mortgages were void