Boston Safety & Deposit Co. v. City of Plattsmouth

SHIRAS, District Judge. From the record in this case it appears that on the 11th of March, 1888, the city of Plattsmouth, a municipal corporation created under the laws of the state of Nebraska, entered into a contract with one George B. Inman, Ms successors and assigns, for the erection of a system of waterworks to supply water for the use of the city of Plattsmouth and its inhabitants; the city agreeing on its part i.o pay for a certain number of hydrants, and to levy and collect a tax to provide the means for meeting such payment on its part. To carry out the contract for the erection of the waterworks, a corporation was created under the laws of the state of Nebraska known by 1 he name of the Plattsmouth Waterworks Company, and, to secure the money needed to construct the works, bonds in the sum of §125,000 were issued by the waterworks company, secured by a mortgage deed covering the property of the company, including all contracts in-payment of water rentals. By the terms of the mortgage the Boston Safety & Deposit Company, the complainant herein, was made trustee in such mortgage, with the right to act for the protection and enforcement of the rights of the bondholders, said company being a corporation created under the laws of the state of Massachusetts. In the bill filed in this case, it is averred, in substance, that the city of Plattsmouth has for some time past failed to make due payment of the water rentals to the water company as it had agreed to do, and that, by reason of such failure to make payment on part of the city, the water company had been rendered unable to meet its payments of interest on the bonds secured by the mortgage, it being also averred that the water company had failed to enforce such payments; and therefore the Boston Safety & Deposit Company, as the trustee for the bondholders, prays the aid of the court to enforce payment on part of the city. In effect, the purpose of the bill is to obtain the specific performance on part of the city of the obligations by it assumed in the contract between the city of Plattsmouth and George B. Inman and his assigns. The right of the complainant, as the trustee for the 882 bondholders, to obtain such relief, is based upon the fact that the .mortgage deed assigns to the complainant, as trustee, the contract entered into by the city of I'lattsmouth and Inman and his assigns. In other words, the complainant seeks to maintain this suit as the assignee of the contract in question, and, under the express provisions of the acts of congress of 1887-88, this court cannot take jurisdiction on behalf of complainant unless the jurisdiction would exist if no assignment had been made, and the suit was instituted in the name of the assignor. It is clear, beyond question, that this court could not take jurisdiction of a suit brought by the Plattsmouth Waterworks Company against the city of Plattsmouth, based upon the contract in question, for these companies are corporations created under the laws of the state of Nebraska, and therefore the requisite diversity of citizenship does not exist; and, if the jurisdiction does not exist in favor of the waterworks company, It does not exist in favor of its assignee, the present complainant. The motion to dismiss for want of jurisdiction is therefore granted on behalf of city of Plattsmouth.