Southern Pac. Ry. Co. v. United Stated

GILBERT, Circuit Judge (after stating the facts as above). The question principally discussed in the briefs and argument of counsel is that of the jurisdiction of the Circuit Court to entertain the bill; the appellant contending that the appellee had a complete and adequate remedy at law. In the bill, jurisdiction in equity is invoked on the grounds of discovery, accounting, the establishment of a trust, and the enforcement of a lien. The bill fails to show, however, that there is a trust or a lien involved. Notwithstanding the allegations of the bill, it is apparent that the appellant is not in the possession of a trust fund realized from the sale of government lands which may be identified and pursued by the appellee and subjected to the payment of the price fixed by Congress as the compensation to be paid therefor. It is apparent also, that no lien exists in favor of the appellee .enforceable against property held by the appellant. The jurisdiction in equity must be sustained, if at all, upon the ground of the discovery and accounting prayed for. The bill set forth two exhibits where■in were described the tracts of land which were alleged to have been restored to the United States by the forfeiture act of July 6, 1886, and which lands were alleged to have been sold to bona fide purchasers, and it set forth the names of the purchasers. The discovery which it sought was the enumeration of the sales and contracts of sale made by the appellant of each of the' tracts of land described in said exhibits, the name of the purchaser of each tract, the dates of the sales or the contracts of sale, the form and character of the instruments in writing, the price of each tract, and the date and amount of each payment of principal and interest thereon. The appellant answered the bill .so far as the discovery was concerned, and disclosed fully all the information so sought. At the same time,. it demurred to [741] the remainder of the bill for want of equity, and it now contends that the suit for discovery came to an end upon the filing of a sworn answer to the discovery which was sought. It is doubtful whether, in view of the demurrer, the bill was sustainable in equity on the ground that it involved an accounting. ' The account does not seem to be so complicated as to require a resort to equity. In view of the rulings of the Supreme Court in Southern Pacific v. United States, 200 U. S. 341, 351, 26 Sup. Ct. 296, 50 L. Ed. 507, and United States v. Bitter Root Co., 200 U. S. 451, 478, 26 Sup. Ct. 318, 50 L. Ed. 550, we should feel compelled to reverse the decree and direct the dismissal of the bill were it not for the following considerations: The case is not of the class of those of which equity cannot take jurisdiction. Where the subject of the suit is embraced under any of the heads of equitable jurisdiction, the court will take cognizance of it, notwithstanding there may be a remedy at law, unless the defendant raises the .objection by demurrer or claims the advantage of it in his answer. Southern Pacific v. United States, supra. In the present case the appellant did by demurrer and answer object to tlie jurisdiction. But, if the Circuit Court erroneously overruled the objection, the question arises whether the appellant was injured thereby. An appellate court will not reverse the decision of a trial court for error unless the error has prejudiced the party who complains of it or has deprived him of a substantial right. Lancaster v. Collins, 115 U. S. 222, 6 Sup. Ct. 33, 29 L. Ed. 373; Stuart v. Gay, 127 U. S. 518, 526, 8 Sup. Ct. 1279, 32 L. Ed. 191. The sole ground upon which equitable jurisdiction is denied when there is an adequate remedy at law is that tlie party defendant is thereby deprived of his right to a trial by jury which is guaranteed by the seventh amendment. In Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. 713, 35 L. Ed. 358, it was said: “Tlie Constitution in its seventh amendment declares that ‘in suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial hy jury shall be preserved.’ In the federal courts this right cannot be dispensed with, except by the assent of the parties entitled to it, nor can it be impaired hy any blending with a claim properly cognizable at law, of a demand for equitable relief in aid of the legal action or during its penden-cy. Such aid in the federal courts must be sought in separate proceedings, to the end that the right to a trial by a jury in the legal action may be preserved intact.” The appellant was not, by the ruling of the court below, deprived of a jury trial in this case. There was no issue which could have been submitted to a jury. The decree was rendered upon the bill, the answer, and the admissions of the appellant. There were no questions before the court except questions of law. It is evident that there were, and could be, no controverted questions of fact. It is clear from the authorities that the defendant, in a case such as that which is here presented, may consent to the jurisdiction in equity, and thereby waive his right to a jury trial. We see no substantial reason why, after the defendant has answered admitting, as in this case, the facts on which the complainant’s cause depends, leaving only questions of law to be determined by the court, it should not be held that he thereby waives [742] his right to a jury trial. That was what was done in the present case, and we cannot see that the trial court committed reversible error in rendering the appropriate judgment upon the pleadings. Substantial justice has been done between the parties. It would be an unnecessary burden upon them to require that’ the decree be reversed, the bill dismissed, and new issues framed in an action at law, in which there could be no issue for a jury, and that the cause be prosecuted to a judgment which could in no respect be different from that which was rendered in the present case. Error is assigned to the decree in that it requires the appellant to pay for all the lands described in Exhibit A; whereas, it is claimed that the price of 1,920 acres thereof should have been deducted, for the reason that those lands-were the subject of the suit between the United States and the Southern Pacific Company, finally decided in 146 U. S. 570, 13 Sup. Ct. 152, 36 L. Ed. 1091, in which suit the United States did not pray for a judgment or a decree for the value of the lands, nor for a money judgment other than the costs of suit, and that by that final decree all rights of the United States in and to said lands were finally adjudicated and set at rest more than 10 years before the present suit was brought, and that the doctrine which forbids the splitting of demands bars the recovery here sought as to those lands. It is pointed out that by the final decree in suit No. 184, referred to in the bill (Southern Pacific Co. v. United States, 168 U. S. 1, 18 Sup. Ct. 18, 42 L. Ed. 355), the complainant was authorized to bring an action to recover the value of the lands involved; whereas, in the decision in 146 U. S. 570, 13 Sup. Ct. 152, 36 L. Ed. 1091, no such authority was given. We find no merit in the contention. The suit in which those 1,920 acres were involved was brought to test the claim of the Southern Pacific Company to the lands in controversy and to restrain trespasses thereon by .that company and by' those claiming under it. No question of the rights of innocent purchasers was involved, and it does not appear that the purchasers of the 1,920 acres here under discussion were made parties to the suit. The only question involved and determined was the right of the railroad company and those claiming under it to the lands described in the bill. There was no praj^er for an accounting, and no accounting was had. The decree determined only that, by virtue of patents issued to the railroad companies, the defendants to the suit had no rights whatever. So far as the right and duty of the United States to recover the debt of the appellant for lands erroneously patented to it, which it sold to bona fide purchasers, are concerned, the 1,920 acres of land so referred to now stand in the same attitude as all the other lands involved in the present suit. But, aside from these considerations, a sufficient answer to the contention is found in the fact that the appellant interposed no plea in bar and made no objection in the court be-: low on the ground that there was a splitting of the cause of action. The defendant may, either expressly or impliedly, consent to the institution of sepa'rate actions on a single demand. Claflin & Kimball v. Mather Electric Co., 98 Fed. 699, 39 C. C. A. 241. And it is held that his consent "will be presumed unless he pleads the former action [743] m 1>ar or otherwise objects in the trial court. Fox v. Althorp, 40 Ohio St. 312; McDonald v. Tison, 91 Ga. 549, 20 S. E. 427; Gardner v. Patten (Com. Pl.) 15 N. Y. Supp. 321. It is contended that the court erred in charging interest against the appellant from March 2, 1896, the date of the approval of the last: adjustment act, instead of from January 27, 1902, the date when, by the decision in case No. 184, it was finally ascertained who were bona fide purchasers of the land. The bill in case No. 181 was filed in 1891. It was brought against the Southern Pacific Company and numerous persons, who, it was alleged, claimed to be bona fide purchasers for value. It alleged that the United States was the owner of the lands, and that they had been erroneously patented to the railroad company, and it prayed .that the patent be set aside, that the title of the United States be quieted, that an accounting be taken of the moneys received by the company from the sale of the lands, that, if it should be found that any of the defendants were bona fide purchasers for value, their title be protected by the decree, and that judgment be rendered against the company for the sum of $2.50 per acre for all of such lands. The company answered denying the right of' the United States to the lands, and thereby denying its right to recover any of the proceeds of such lands as had been sold to purchasers. Neither the decision of the Circuit Court nor that of the Supreme Court on appeal (168 U. S. 1, 18 Sup. 18, 42 L. Ed. 355) disposed of the whole case. All that was decided in either court was that the company had no interest in any of the lands involved in the suit. The question of the right of those who claimed to be bona fide purchasers having been left undetermined, the case was remanded for further adjudication. On January 7, 1898, the Circuit Court rendered a decree adjudicating the rights of those who claimed to be bona fide purchasers, but rendered no judgment against the company for the proceeds of lands sold to such purchasers. An appeal was taken by the United States, and on January 27, 1902, the decree of the Circuit Court was affirmed. Tt is not disputed that prior to March 2, 1896, the appellant had received from the purchasers the money for the recovery of which the present suit was brought. At that date it had in its possession money which ex aequo et bono belonged to the United States, and it has had the use of that money ever since. Its right to retain it bad been challenged in 1891 by the institution of the suit in case No. 184. The institution of that suit was a demand for the money. Kaufman v. Tredway, 195 U. S. 271, 25 Sup. Ct. 33, 49 L. Ed. 190. The present case is therefore unlike United States v. Sanborn, 135 U. S. 271, 10 Sup. Ct. 812, 34 L. Ed. 112, where the denial of interest was placed upon the ground that more than 10 years elapsed after the payment to the defendant before his right to retain the money was questioned by suit or otherwise. “Tlie institution of legal proceedings to collect a debt is a sufficient demand for its payment to start the running of interest thereon, from the time suit is begun, and this has been held to be true even though the suit is dismissed, if, in a subsequent suit, a recovery he had.” 22 Cyc. 3550, and cases [744] there cited; Kaufman v. Tredway, 195 U. S. 271, 25 Sup. Ct. 33, 49 L. Ed. 190. •‘The pendency of litigation between the parties to an existing debt concern-ling the same will not of itself suspend interest on such debt during such litigation where the money is not paid into court. It has been held that where there is a legal contest between persons other than the debtor, render-, Ing it doubtful to whom the debt should be paid, the debtor is not generally chargeable with interest during such contest, although if the fund in such' cases has been used by the debtor, and has earned interest, the court will allow interest thereon notwithstanding the pendency of the litigation.” 22 Cyc. 1558; Potter v. Gardner, 5 Pet. 718, 8 L. Ed. 285; Spring v. South Carolina Ins. Co., 6 Wheat. 268, 5 L. Ed. 614; Crescent Mining Co. v. Wasatch Mining Co., 151 U. S. 317, 323, 14 Sup. Ct. 348, 38 L. Ed. 177. In Spalding v. Mason, 161 U. S. 375, 396, 16 Sup. Ct. 592, 600 (40 L. Ed. 738) the court said: “It is no hardship for one who has had the use of money owing to another to be required to pay interest thereon from the time when the payment should have been made.” We find no error in the allowance of interest, and, finding no error for which the decree should be reversed, it is, accordingly, affirmed.