Court Opinion

ID: 8745581
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:05:38.399481+00
Date Added: 2024-06-11T17:00:39.140096
License: Public Domain

SANBORN, Circuit Judge
(dissenting). I concur in the views expressed in the foregoing opinion, upon every question except that relating to the right of the complainants to maintain a suit in equity. It seems to me that they have that right, and for the following reasons :
This bill in equity is brought by 26 different parties, each of whom is the separate owner of certain specific bonds. . They allege in their bill the terms of the bonds, the vote to issue them, the construction of the railroad, the subsequent delivery of the bonds, and their purchase of their respective holdings. They aver that the indebtedness of the county upon each bond is $1,210; that the county has collected and now has in its treasurjr $3,059.16, which it has obtained by the lev}r and collection of taxes to pay these bonds, and that it has refused to pay over this fund, or to make any further levies of'taxes to satisfy the indebtedness evidenced by their obligations; and that they have sustained damages in the amount of $1,210 upon each bond by the acts of the defendant. They pray that the fund in the county treasury derived from the levy and collection of the taxes to pay their securities be paid over to them as their respective interests may appear; that the proper officers of the county be directed to make a levy annually of one mill on the dollar on the taxable property of the county to pay the bonds; and they ask for general relief. A glance at“the bond discloses the fact that it contains no promise to pay any sum certain at any certain time, and that the only agreement in it is, in effect, that it will pay to each bondholder his pro ráta share of such an amount as shall be raised annually by the 'levy of one mill upon a dollar upon the taxable property of the county. It is a .promise to raise and ¡Day over a share of a fund,—nothing more and nothing less. Bearing in mind the nature' of this obligation, let us consider the objections to the maintenance of this suit in equity. The contention that distinct demands or liabilities cannot be aggregated for the purpose of giving the circuit court jurisdiction (Clay v. Field, 138 U. S. 464, 480, 11 Sup. Ct. 419, 34 L. Ed. 1044; Hawley v. Fairbanks, 108 U. S. 543, 548, 2 Sup. Ct. 846, 27 L. Ed. 820; Ex parte Baltimore & O. R. Co., 106 U. S. 5, 1 Sup. Ct. 35, 27 L. Ed. 78; Wheless v. City of St. Louis, 180 U. S. 379, 21 Sup. Ct. 402, 45 L. Ed. 583) has no relevancy to this case, because the complainant first named in the bill owns .18 bonds, evidencing an indebtedness of $21,780; and there is no more reason to suppose that his claim to recover this amount in -this suit in equity was made in bad faith, than there is to' suppose that the claim of--Williams in the action *815Hi law to recover the entire! debt evidenced by his bonds was made in bad faith. Moreover, the amount in controversy in the equity suit is not the aggregate amount which the levy of one mill oil a dollar for the years 1898 and 1899 would produce and render applicable to the payment of these bonds. On the other hand, it is the entire debt which they evidence, because a decree in this suit that the issue of the bonds was unauthorized, and that the complainants are entitled to no levy to pay them, will necessarily render every part of them void, and will constitute a perpetual bar to any subsequent suit to collect any unpaid portion of them. The amount in controversy, therefore, between the complainant Blair alone and the defendant, was far more than sufficient to confer jurisdiction upon the court below.
Turning to the general question whether or not a court of equity has jurisdiction of the case made by this bill, there are three grounds which warrant the maintenance of this suit:
1. The owners of separate claims and rights of action against the same party may maintain a single suit against him '‘where a number of persons have separate and individual claims and rights of actiou against the same party, but all arise from some common cause, are governed by the same legal rule, and involve similar facts, and the whole matter might be settled in a single suit brought by all these persons uniting as coplaintiffs, or one of the persons suing on behalf of the others, or even by one person suing for himself alone.” 1 Pom. Eq. Jur. §§ 245, 255, 257, 268, 269, 273; Crews v. Burcham, 66 U. S. 352, 357, 17 L. Ed. 91 : Osborne v. Railroad Co. (C. C.) 43 Fed. 824, 828. There is no fatal misjoinder of causes of action in equity in any bill which presents a common point of litigation, the decision of which will affect the whole subject-matter, and will settle the rights of all the parties to the suit. Kelley v. Boettcher, 29 C. C. A. 14, 23, 85 Fed. 55, 64, 56 U. S. App. 363, 378; Hayden v. Thompson, 17 C. C. A. 592, 598, 71 Fed. 60, 67, 36 U. S. App. 361, 369; Chaffin v. Hull (C. C.) 39 Fed. 887; Brinkerhoff v. Brown, 6 Johns. Ch. 139; Fellows v. Fellows, 4 Cow. 682, 700; Prentice v. Forwarding Co., 7 C. C. A. 293, 296, 58 Fed. 437, 441, 19 U. S. App. 100, 108; Brown v. Safe Deposit Co., 128 U. S. 403, 412, 9 Sup. Ct. 127, 32 L. Ed. 468. There is a common point of litigation between the complainants and the defendant in this suit. Indeed, the only point of litigation is a common one. It involves the question whether or not the sole defense to these bonds is good,—whether or not their issue was authorized by the statutes of Nebraska. If this defense is good against one, it is good against all the complainants: and, if it is bad against one, it is bad against all. The complainants’ rights and causes of action arise from a common source,-—from the act of the county in issuing the bonds. .They involve similar facts. They are governed by the same legal rules, and a single decision in this single suit between them and the comity will determine all the rights of the parties in interest, and will settle -the entire matter in litigation. A decree in this suit that the issue of these bonds was unauthorized will bar all farther actions or, suits upon them, and a decree that *816they were lawfully issued will perpetually estop the defendant from defeating them. The case falls far within the familiar rule which has been quoted from Pomeroy.
2. Equity has jurisdiction of suits to execute trusts and to administer and distribute trust funds. This is a suit for that purpose. The $3,059.16 which the defendant has collected and placed in the hands of its treasurer by means of the levy of the tax to pay these bonds required by the statute is charged by the law with a trust for the benefit of the complainants.- Neither the county nor the taxpayers nor any other party has any right to this money. The treasurer holds it in trust for the complainants, and any one or more of them 'has the right to institute and maintain a suit in equity, against this trustee and all the other holders of bonds who claim a share in it, to ascertain the respective rights of the claimants therein, to compel the execution of the trust and the distribution of the money. Insurance Co. v. Mead (S. D.) 82 N. W. 78, 82. This is. one of the objects of this suit, and this alone is sufficient to. sustain the jurisdiction of the court, and, having thus obtained jurisdiction, to warrant it in proceeding to determine the rights of these parties in the entire subject of this litigation.
3. The complainants are without any adequate remedy at law. The remedy at law which will preclude the- maintenance of a suit in equity must be “plain and adequate, or, in other words, as practical and efficient to the ends of justice and its prompt administration as the remedy in equity.” Boyce v. Grundy, 28 U. S. 210, 215, 7 L. Ed. 655; Oelricks v. Spain, 82 U. S. 211, 221, 223, 21 L. Ed. 43; Preteca v. Land Grant Co., 1 C. C. A. 607, 50 Fed. 674, 4 U. S. App. 326; Foltz v. Railroad Co., 8 C. C. A. 635, 641, 60 Fed. 316, 322, 19 U. S. App. 576, 587; Hayden v. Thompson, 17 C. C. A. 592, 594, 71 Fed. 61, 63, 36 U. S. App. 361, 367. There are 26 complainants in this suit. Would 26 actions at law be as efficient, as practical, and as prompt to attain the ends of justice, as this suit in equity? These bonds, as we have seen, contain no promise to pay any sum certain at any certain time. They are mere acknowledgments of indebtedness, and agreements to levy a tax and to distribute the proceeds pro rata among the bondholders. All the bondholders are necessary parties to the distribution by any court of the proceeds of any tax that may be levied, because no court can so determine the pro rata share of any bondholder that its decision will bind the other bondholders, and protect the county from excessive payments, unless the other bondholders are parties to the suit. They cannot be made parties to an action at law. Nor is there any way in which the amount for which a judgment at law in favor of any bondholder should be rendered can be definitely ascertained. The sum he is entitled to recover in an action at law is his pro rata share of the amount which a tax of one mill on a dollar on all the taxable property of the county would have produced in the years 1898 and 1899 if it had been levied and collected. It may be possible to determine what amount should have been levied, but how can the amount that would have been collected if the levy had been made in 1899 be found in an action *817at law? And how. can the pro rata share of a plaintiff be so adjudged that the decision will bind the other bondholders, and protect the county from excessive payments? These questions may present themselves for answer in 26 actions at law, followed by 26 proceedings by mandamus, -before the complainants will secure any relief, if they are forbidden access to a court of equity. Proceedings of that character will fall far short of this simple suit in equity in efficiency, practicability, and promptitude. All the bondholders are or may be made parties to this suit. A single decree here may adjudge the validity of the bonds, the number of bonds held by each claimant, the amount owing to each claimant thereon, and his percentage of the trust fund now in the hands of the treasurer of the county, and of the proceeds of any tax levies that may hereafter be made. Such a decree would bind all the parties interested in this litigation, and put an end to the controversy. The defendant would then undoubtedly proceed to levy the tax and pay the bonds according to their terms, and, if it did not, such a decree would be as ample a warrant for the .necessary proceedings by mandamus as any judgment at law can be. This suit in equity is a far more simple and effective way to attain the ends of justice in this matter than any actions at law can be. The bill is an application for the administration and distribution of a trust fund, and it presents a case where a number of persons have separate and individual claims and rights of action against the same party, which arise from a common source, which involve a common point of litigation, and which can all be settled by a single decision in „a single suit.
For these reasons, it appears to me that a court of equity has jurisdiction of this suit, that the judgment sustaining the' demurrer to the bill ought to be reversed, and that the suit should be sustained.