Coal Company v. Blatchford

APPEAL from the Circuit Court for the Western District of Pennsylvania. The case was this:

The eleventh section of the Judiciary Act enacts:

'That the Circuit Courts shall have original cognizance. . . of all suits of a civil nature, &c., where an alien is a party, or the suit is between a citizen of the State where the suit is brought and a citizen of another State.'

With this provision in force, R. M. Blatchford and J. B. Newman filed their bill for the foreclosure of a mortgage executed by the Susquehanna and Wyoming Valley Railroad and Coal Company to them as trustees, to secure the payment of the company's bonds and for the sale of the mortgaged property. The mortgage conferred upon the plaintiffs the usual rights and powers of mortgagees, and contained stipulations authorizing them to use different remedies in case default was made in the payments provided.

The bill stated that the defendant was a corporation created and organized under the laws of the State of Pennsylvania; that the plaintiff, Blatchford, was a citizen of the State of New York; that the plaintiff, Newman, was a citizen of the State of Pennsylvania, and that they as trustees sued solely for the use of Henry Beckett, an alien and a subject of the Queen of Great Britain, and Joseph Loyd, a citizen of New Jersey, both residing in New Jersey. The defendant demurred to the bill on the ground that the plaintiff Newman and the defendant corporation, being citizens of the same State, the court had not jurisdiction of the cause. The court overruled the demurrer, and an answer and replication having been filed, the case was heard on the pleadings; and a decree rendered for the plaintiffs. From this decree the appeal was taken; and the question presented for consideration here was whether the jurisdiction of the Federal court depended upon the citizenship of the trustees, who were the plaintiffs, or of the parties for whose benefit the suit was averred to have been brought.

Mr. Theodore Cuyler, in support of the jurisdiction:

The jurisdiction of the Circuit Courts, when it is founded upon the citizenship of the parties, rests upon that of the real and not of the nominal parties to the suit. This is decided in Browne v. Strode, where this court says that the courts of the United States have jurisdiction in a case between the citizens of the same State, if the plaintiffs are only nominal plaintiffs, for the use of an alien. By a law of the State of Mississippi sheriffs were required to give bond to the governor for the faithful performance of their duty. 'The fact that the governor and the party sued are citizens of the same State, will not,' say this court, in McNutt v. Bland, 'oust the jurisdiction of the Circuit Court of the United States, provided the party for whose use the suit is brought is a citizen of another State.' So again the court declares in Wormley v. Wormley, that the court will not suffer its jurisdiction in an equity cause to be ousted by the circumstances of the joinder or non-joinder of merely formal parties, who are not entitled to sue or liable to be sued in the United States courts. In Irvine v. Lowry, the doctrine of Brown v. Strode is strongly affirmed.

In this case nothing can be actually decreed in favor of Newman, the party referred to in the demurrer. Both he and Blatchford, his co-trustee, are, in the language of Judge Baldwin, in Irvine v. Lowry, 'the mere instruments or conduits through whom the legal right of the real plaintiff could be asserted.'

At all events, the objection should have been taken by plea in abatement. It is too late when coming on demurrer.

Mr. E. F. Hodges, for the appellant, contra.

Mr. Justice FIELD delivered the opinion of the court.