United States v. Northern Pac. R.

HOOK, Circuit Judge, after stating the case as above, delivered the opinion of the court. There is no act of Congress specially applicable to suits such as the one now under review, which designates the tribunal in which they shall be instituted. The case, therefore, falls within the general grant of jurisdiction to the Circuit Courts found in Judiciary Act Aug. 13, 1888, c. 866, § 1, 25 Stat. 433 [U. S. Comp. St. 1901, p. 508], and is subject to the limitations therein expressed. It is provided in that section that: “No civil suit shall be brought * * * against any person by any original process or proceeding in any other district than that whereof he is an inhabitant.” The exception to this provision in respect of suits between citizens of different states does not apply to suits in which the United States is plaintiff or petitioner. The contention of the Western Union, which was asserted in the Circuit Court and is still asserted here, is that, being a corporation organized under the laws of New York, it is an inhabitant of that state, and is not suable in the District of Minnesota without its consent. The fact that a corporation does business in a state other than that of its incorporation does not make it an inhabitant of that state for purposes of jurisdiction. It remains an inhabitant of the state under the laws of which it was organized. Shaw v. Quincy Mining Co., 145 U. S. 444, 12 Sup. Ct. 935, 36 L. Ed. 768; Southern Pacific v. Denton, 146 U. S. 202, 13 Sup. Ct. 44, 36 L. Ed. 942; In re Hohorst, 150 U. S. 653, 14 Sup. Ct. 221, 37 L. Ed. 1211; In re Keasbey & Mattison Company, 160 U. S. 221, 16 Sup. Ct. 273, 40 L. Ed. 402; Rust v. Waterworks Co., 70 Fed. 129, 17 C. C. A. 16; Ellsworth Trust Co. v. Parramore, 108 Fed. 906, 48 C. C. A. 132. In United States v. Southern Pacific et al. (C. C.) 49 Fed. 297, which was á case very similar to the one at bar, a contrary view was announced. The pleas and motions of the Southern Pacific, a Kentucky corporation, and the Western Union, a New York corporation, were overruled; it being held that they were inhabitants of the state of California where the suit was instituted. But the doctrine which we have applied is now firmly established. It follows, therefore, that the plea of the Western Union should have been sustained, it should have been dismissed from the suit, and all proceedings thereafter should have been as though it were no longer a party defendant. In this view of the situation, considering that the plea was sustained, as it should have been, had the Circuit Court, sitting as a court <?f equity, [719] jurisdiction to proceed further, or should the cause have been dismissed without prejudice to other proceedings? If the government had merely sought to enforce the performance of a duty imposed upon the Northern Pacific by its charter or by statute, the remedy would have been at law, by an ordinary action in mandamus, and not by a suit in equity. To such an action the Western Union would not have been a proper party, nor would it have been bound by any judgment obtained against the Northern Pacific. The jurisdictiop of the Circuit Court as a court of equity arose solely from the fact that the contracts and arrangements with the Western Union and its possession and partial ownership of the telegraph lines and instrumentalities along the lines of railroad interposed an obstacle to the adequacy and efficiency of the remedy at law. The judicial ascertainment and removal of the entanglements arising from the joint ownership of the telegraph properties and the contractual relations between the defendants were peculiarly within the province of a court of equity. An action at law would have been wholly inadequate to secure the measure of relief sought by the government. But, jurisdiction in equity once secured, the court could, conformably with familiar principles, proceed to a decree that would settle all matters in dispute between the parties pertaining to the subject-matter of the litigation. United States v. Union Pacific Railway, 160 U. S. 1, 50, 16 Sup. Ct. 190, 40 L. Ed. 319. The averments of the original and amended bills and the prayers for relief clearly show that an important and essential purpose of the suit was the removal of the obstacles'to the enforcement of the legal rights of the government; and in that particular feature of the case dwelt the elements of equitable jurisdiction. A decree was sought by the government annulling and canceling the contracts and arrangements between the Northern Pacific and the telegraph companies and the judicial ascertainment and adjudication of the rights of the government and of the defendants’ claims of an exclusive right of way or of control or interest of any kind in the telegraph lines and property along the railroad. It is manifest, therefore, that the Western Union was an indispensable party to the suit and that relief so vitally affecting its interests could not be awarded in its absence. And as its codefendant, the Northwestern Telegraph Company, was merely a nominal party, the substance of its rights, if, indeed, it possessed any at all, being owned and controlled by the Western Union, it is also apparent that, with the departure of the latter from the case as a necessary consequence to the sustaining of its plea to the jurisdiction, the right to entertain the proceeding of the government as a suit in equity would thereupon cease. Upon a dismissal of the Western Union there would be present in court no defendant which asserted those impeding claims and interests the existence of which alone justified an appeal to a court of equity. The Western Union was not properly suable in the district of Minnesota without its consent. It seasonably presented its objection, and its plea should have been sustained. Its presence as a party to the suit was indispensable to the maintenance thereof in equity and to the granting of the relief asked by the government. The bill should, therefore, have been dismissed upon that ground, and not upon the merits. Shields v. Barrow, 17 How. 130, 15 L. Ed. 158; Barney v. Baltimore City, 6 Wall. 280, 284, 18 L. Ed. 825; Bank v. Railroad, 11 Wall. [720] 624, 20 L. Ed. 82; Ribon v. Railroad Companies, 16 Wall. 446, 450, 21 L. Ed. 367; Gregory v. Stetson, 133 U. S. 579, 10 Sup. Ct. 422, 33 L. Ed. 792. These conclusions render it unnecessary to consider whether the act of August 7, 1888, applies to the Northern Pacific, or- whether that company has failed to comply with its requirements, or with the requirements of the act of July 2, 1864, by which the Northern Pacific Railroad Company was incorporated. . The decree of the Circuit Court is reversed, and the cause remanded, with directions to sustain the plea of the Western Union Telegraph Company and to dismiss the complainant’s bill, without prejudice to any future proceeding.