« ΠροηγούμενηΣυνέχεια »
(268 U. S. 35)
which overruled the demurrer, but made no BALTIMORE & O. R. CO. V. CITY OF order respecting the injunction. Within 30 PARKERSBURG.
days thereafter an answer was filed by leave. (Argued March 19, 1925. Decided April 13, for 23 years. In 1921 activities were resum
Then the cause stood without further action 1925.)
ed leisurely. In 1923, upon demurrers and No. 305.
motions, the District Court for the Northern 1. Courts fm 382 (2)-No right of appeal to District of West Virginia (to which the case Supreme Court where diversity of citizenship had been transferred pursuant to section 290 is sole ground of federal jurisdiction.
of the Judicial Code [Comp. St. § 1267]) enUnder Judicial Code, § 128 (Comp. St. & tered a final decree for the plaintiff. The 1120), no right of appeal from Circuit Court of decree was reversed by the Circuit Court of Appeals to Supreme Court exists, where di- Appeals. City of Parkersburg v. Baltimore versity of citizenship is sole ground of federal & O. R. Co., 296 F. 74. The railroad appealed jurisdiction.
to this court. It also filed a petition for a 2. Courts Om314-Federal court held without writ of certiorari, consideration of which
jurisdiction, on ground of diverse citizenship, was postponed until the hearing on the apof suit to enjoin levy of tax against railroad. peal. Where Maryland corporation, purchaser at
(1) The decision in both lower courts was foreclosure sale of property and franchises of rendered on the merits. These we have no West Virginia railroad corporation, thereupon occasion to consider. There is no right of becoming West Virginia corporation as to such | appeal to this court, because the jurisdiction property, sued town in West Virginia to enjoin of the trial court was invoked solely on the levy of tax, federal court did not have jurisdiction on ground of diverse citizenship, since, if ground *of diversity of citizenship. Judicial suit was brought as West Virginia corporation, Code, & 128 (Comp. St. & 1120). The writ there was no diversity, and, if as Maryland cor- of certiorari is granted. But, as the bill does poration, West Virginia corporation was a nec
not show that the trial court had jurisdicessary party, and prevented complete diversity of citizenship.
tion of the controversy, the decree of the Cir
cuit Court of Appeals must be reversed with Appeal from, and Petition for Writ of Cer-directions to remand the cause to the District tiorari to, the United States Circuit Court of Court. Appeals for the Fourth Circuit.
 The claim asserted by the bill is this.
In 1855 the Northwestern Virginia Railroad Suit by the Baltimore & Ohio Railroad Company against the city of Parkersburg. Company, a corporation organized under the Decree for plaintiff was reversed by the Cir- laws of Virginia, acquired from the town of
Parkersburg, an exemption from, or cuit Court of Appeals (City of Parkersburg V. Baltimore & O. R. Co., 296 F. 74), and mutation of, municipal taxes on certain propplaintiff appeals and petitions for writ oferty within its limits. In 1863 the railroad certiorari, Writ of certiorari granted, de- and the municipality became domestic corcree reversed, and case remanded, with di- porations of West Virginia, upon the organirections.
zation of that state. In 1865 the property
and franchises of the railroad were purchas*Messrs. Frank W. Nesbitt, of Wheeling, ed by the Baltimore & Ohio at a foreclosure W. Va., and J. W Vandervort, of Parkers- sale. Pursuant to the statutes of West Virburg, W. Va., for appellant.
ginia then in force, the Baltimore & Ohio Messrs. R. B. McDougle and F. P. Moats, declared "that it would become a corporaboth of Parkersburg, W. Va., for appellee.
tion as to said property, by the name of the
Parkersburg Branch Railroad Company.” Mr. Justice BRANDEIS delivered the opin- bill was claimed as an incident of the prop
The immunity from taxation asserted in the ion of the Court.
This suit was commenced in the Circuit erty acquired on foreclosure, and also as Court of the United States for the District and contracts made with the Parkersburg
having been conferred by ordinances adopted, of West Virginia in 1894. The plaintiff is Branch Railroad. The levy seems to have the Baltimore & Ohio Railroad, alleged to be been made upon property of that company. a Maryland corporation; the defendant is the city of Parkersburg, a West Virginia cor
It was a West Virginia corporation. The poration. The relief sought was to enjoin
1 Code of Virginia 1860, tit. 18, c. 61, $$ 28, 29; Conthe levying of taxes assessed upon certain stitution of West Virginia (1863) art. 11, $ 8; Baltirailroad property. The federal jurisdiction more & Ohio R. R. Co., Corporate History (1922)
See Chesapeake & Ohio Ry. Co. was invoked solely on the ground of diver- vol. 1, pp. 243, 247.
v. Miller, 114 U. S. 176, 182, 185, 5 S. Ct. 813, 29 L. sity of citizenship. A temporary injunction Ed. 121, and Acts of West Virginia--1891, c. 32, p. issued upon the filing of the bill. In 1895 57; 1889, c. 23, p. 81; 1887 (extra session) c. 73, p. the case was heard upon demurrer to the 218; 1883, c. 12, p. 13; 1882, c. 97, § 30, p. 277 ; 1881,
c. 17, $ 72, p. 237, and section 82, p. 240 ; 1877, c. 106, bill and upon a motion to dissolve the in
p. 138; 1872-73, c. 88, § 23, p. 228, and chapter 227, junction. In 1897 a decree was entered, 1 16, p. 724 ; 1865, c. 73, p. 62.
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(45 S.Ct.) bill sought to enforce its right. The capacity the Circuit Court of Appeals is to remand in which the Baltimore & Ohio sued to en- the case to the District Court for further force the right to immunity was not stated proceedings not inconsistent with this opinclearly in the bill. Apparently it sued ei-ion. •38
Reversed. ther in its capacity as *owner (sole stockholder) of the West Virginia corporation or
(268 U. S. 50) on the theory that, as to the property pur- NAMPA & MERIDIAN IRR. DIST. v. BOND, chased on foreclosure, it became itself the
Project Manager, et al. Parkersburg Branch Railroad Company. In neither view did the trial court have juris- (Argued March 6, 1925. Decided April 13, diction of the controversy.
1925.) If the plaintiff sued as the corporate own
No. 135. er of the property, that is, as the Parkersburg Branch Railroad Company, but un
1. Waters and water courses On 222-Neces. der the name of the Baltimore & Ohio, the
sary drainage expense held "operation and
maintenance" charge against water users. trial court was without jurisdiction as a federal court, because both the Branch Rail
Lands within irrigation district, receiving road and the defendant were West Virginia water from government irrigation project uncorporations, and hence the controversy was "operation and maintenance” charge per acre as
der contract which required them to pay same wholly between citizens of the same state. If similar project lands, held chargeable with the Baltimore & Ohio sued as the Maryland their pro rata share of cost of constructing a corporation, owner of all the stock in the drainage district to prevent injury to other Parkersburg Branch Railroad Company, the project lands from seepage due to operation trial court was without jurisdiction of the of system, nor was such charge an increase in controversy, because the latter corporation, construction charges which, under Reclamation an indispensable party plaintiff, was not Extension Act Aug. 13, 1914, § 4 (Comp. St. & joined. Compare Davenport v. Dows, 18 47130), could not be charged against water
users without consent of majority. Wall. 626, 21 L. Ed. 938. And it could not have been joined.
[Ed. Note.-For other definitions, see Words Niles-Bement-Pond Co. v. Iron Moulders Union, 254 U. S. 77, 41 s. and Phrases, First and Second Series, Opera
tion.] Ct. 39, 65 L. Ed. 145. For then one of the plaintiffs would have been a citizen of Vest 2. Waters and water courses Ow222—Lack of Virginia, there would no longer have been
direct and immediate benefit to irrigation
project lands held not to preclude assessment complete diversity of citizenship, and the
of pro rata cost of drainage. jurisdiction of the trial court would have been ousted.
That lands within irrigation district, receivSo far as appears, the Branch Railroad ing water under contract from government ir
rigation project, were not directly and immewas neither merged in, nor consolidated with, diately benefited by drain constructed to prothe Baltimore & Ohio. Nor was there a com- | tect other project lands from damage from pulsory domestication of the latter in West seepage, held, under state law, not to preclude Virginia. Martin's Administrator V. Balti- assessment of pro rata cost of such drain more & Ohio R. R. Co., 151 U. S. 673, 14 s. against project lands within district. Ct. 533, 38 L, Ed. 311. We have, therefore, no occasion to consider the questions involved
Appeal from the United States Circuit in St. Louis & San Francisco v. James, 161 Court of Appeals for the Ninth Circuit. U. S. 545, 16 S. Ct. 621, 40 L. Ed. 802; Louis
Suit for injunction by the Nampa & Meridiville, New Albany & Chicago Ry. Co. v. Louis- an Irrigation District against J. B. Bond, ville Trust Co., 174 U. S. 552, 19 S. Ct. 817, Project Manager of the Boise Project of the 43 L. Ed. 1081; Southern Ry. Co. v. Allison, United States Reclamation Service, wherein 190 U. S. 326, 337, 23 S. Ct. 713, 47 L. Ed. the Payette-Boise Water Users' Association, 1078; Missouri Pacific Ry. Co. v. Castle, Limited, intervened. From a judgment of 224 U. S. 541, 32 S. Ct. 606, 56 L. Ed. 875. the Circuit Court of Appeals (288 F. 541), Compare Memphis & Charleston R. R. Co. v. affirming a judgment of the District Court Alabama, 107 U. S. 581, 2 S. Ct. 432, 27 L. (283 F. 569), dismissing petition, plaintiff apEd. 518; Patch v. Wabash R. R. Co., 207
peals. Decree affirmed. U. S. 277, 28 S. Ct. 80, 52 L. Ed. 204, 12 Ann. Cas. 518.
It would seem that the District Court *Messrs. H. E. McElroy, of Boise, Idaho, must, upon the remand of the case to it, en- Will R. King, of Portland, Or., and Fre
mont Wood, of Boise, Idaho, for appellant. ter a decree of dismissal. But, *as the ques- Mr. W. W. Dyar, of Washington, D. C., for tion whether the trial court had jurisdiction appellee Bond. does not appear to have been considered by Mr. J. B. Eldridge, of Boise, Idaho, for either of the lower courts and was not dis- appellee Payette-Boise Water Users' Ass'n, cussed by the parties here, our direction to Limited.
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Mr. Justice SUTHERLAND delivered the , an operating expense, and that the project opinion of the Court.
lands in the district were liable for their Appellant is an irrigation district organ- proportionate part. ized as a public corporation under the laws The contract with the district, among othof Idaho. In 1915, its supply of water be- er things, provides: ing insufficient to irrigate the lands of all
“The project lands in the district shall pay its members, it entered into a contract with the same operation and maintenance charge the United States, at that time engaged in per acre as announced by the Secretary of the the construction of the Boise irrigation proj- Interior for similar lands of the Boise Project. ect, for water to irrigate the unsupplied lands and for the construction of a drainage
We agree with the courts below that the system *within the district. The district un charge in question fairly comes within this dertook to represent these lands in their re
provision. lations to the government and collect from
Section 4 of the Reclamation Extension their owners and pay over to the government Act, supra, prevents an increase in the conconstruction installments and operation and struction charges to be imposed upon the maintenance charges. The drainage system water users without the consent of a majority was constructed in accordance with the con- of them after the amount thereof has been tract and the cost thereof, after deducting fixed. But this is far from saying that, aftthe amount chargeable to the old water right er the completion of the irrigation system in non-project lands within the district, was accordance with the original plan in respect paid by the United States as a construction of which the construction charges were fixed, expense and, with other costs of construction, should the need arise to remedy conditions was charged ratably against all the project brought about by the use of the system, the lands, being 40,000 acres within and 100,000 government must bear the expense if a maacres outside the district. After the con- jority of the water users withhold their construction cost, including this drainage, had
sent. Expenditures necessary to construct been fixed by the government, it became nec
an irrigation system and put it in condition essary to drain project lands outside the dis
to furnish and properly to distribute a suptrict because they were being ruined for ag-ply of water are chargeable to construction ; ricultural uses by the steadily rising ground but, when the irrigation system is completed, level of seepage water due directly to the expenditures made to maintain it as an effioperation of the irrigation system. Thereup cient going concern, and to operate it on the Secretary of the Interior authorized effectively to the end for which it was dethe construction of a drainage system for signed are, at least generally, maintenance these lands, the cost to be charged to opera- and operating expenses. The expenditure in tion and maintenance, and to be borne rata- question was not for extensions to new lands, bly by all the water users upon project lands or for changes in or additions to the system both within and without the district.
made necessary by faulty original construc Appellant contended that this expendi- tion in violation of contractual or statutory ture was not properly chargeable to opera- obligations (Twin Falls Co. v. Caldwell [C. tion and maintenance, but was an additional charge for construction, which appellant
C. A.] 272 F. 356, 369; Id., *266 U. S. 85, 45 could not be required to collect and pay over
S. Ct. 22, 69 L. Ed. —), but was for the under section 4 of the Reclamation Exten- purpose of overcoming injurious consequencsion Act of August 13, 1914, c. 247, 38 Stat. es arising from the normal and ordinary op686, 687 (Comp. St. § 4713a), which provides eration of the completed plant which, so far that no increase in construction charges shall as appears, was itself well constructed. The be made after the same have been fixed, ex
fact that the need of drainage for the discept by agreement between the Secretary of trict lands, already existing or foreseen, had the Interior and a majority of the water been supplied, and the cost thereof charged right applicants and entrymen to be affected to all the water users as a part of the origithereby. It was insisted, further, that ap
nal construction, by no means compels the pellant would be precluded by state law from conclusion that an expenditure of the same collecting the charges from owners of non- character, the necessity for which subseproject lands, because they were not benefit. quently developed as an incident of operaed. The government having threatened that, tion, is not a proper operating charge. The unless the charges were paid, it would shut off same kind of work under one set of facts
may be chargeable to construction and under the sup*ply of water from the project lands a different set facts may be chargeable to within the district, appellant brought this maintenance and operation. See Schmidt v. suit to enjoin such action. The federal Dis- Louisville, C. & L. Ry. Co., 119 Ky. 287, 301, trict Court dismissed the bill (283 F. 569), 302, 84 S. W. 314. For example, headgates and its decree was affirmed by the Circuit originally placed are charged properly to conCourt of Appeals (288 F. 541). Both courts struction ; but it does not follow that, if an held that the cost was a proper charge as original headgate be swept away, its replace
(45 S.Ct.) ment, though requiring exactly the same kind, 2. Courts On 310–Owner of half interest in of materials and work, may not be charged mine necessary party to other owner's suit
to cancel lease. to operation and maintenance.
 Appellant says the lands within the Owner of a one-half interest in mine is district are not benefited by the drainage in necessary party to other owner's suit against question, and if a direct and immediate ben- lessee to cancel lease on the ground of fraud,
for efit be meant, that is quite true. But it is court has jurisdiction because of diversity of
purpose of determining whether federal not necessary that each expenditure for citizenship. maintenance or operation considered by it
3. Courts en 308-Suit by owner of half inself shall directly benefit every water user,
terest in mine, to cancel lease against lessee in order that he may be called upon to pay
and owner of other half interest, held not his proportionate part of the cost. If the
within jurisdiction of federal court because expenditure of to-day does not especially of diversity of citizenship. benefit him, that of yesterday has done so, or Suit by owner of half interest in mine that of to-morrow will do so. The irrigation against lessee and owner of other half interest system is a unit, to be, and intended to be, to cancel lease on ground of fraud held not operated and maintained by the use of a com- within jurisdiction of federal court on ground mon fund, to which all the lands under the of diversity of citizenship, where lessee was
corporation of state of which owner of other system are required to contribute ratably, half interest was resident, since defendant without regard to benefits specifically and owner belongs on same side of controversy as directly received from each detail to which plaintiff owner, and must be so considered in the fund is from time to time devoted. determining whether diversity of citizenship
This conclusion, we think, fairly accords gives federal court jurisdiction. with the principle established by the Su*55
Appeal from the District Court of the preme Court of the state in *Colburn v. Wil- United States for the Southern District of son, 24 Idaho, 94, 104, 132 P. 579, and we New York. see no merit in the contention that under the
Bill by John Alden Lee against the Lehigh state law a ratable part of the cost of this Valley Coal Company and another. Decree drainage cannot be assessed by the district of dismissal, and complainant appeals. Afupon the project lands within its limits be- firmed. cause they are not benefited thereby. The
Messrs. H. M. Hitchings and Frank Wol. cost of draining the district project lands was
cott, both of New York City, for appellant. met by a charge imposed in part and propor
Mr. Charles W. Pierson, of New York City, tionately upon the lands in the project out
for appellees. side the district. If now, when the latter need like protection, the district lands are called
Mr. Justice HOLMES delivered the opinupon to assume an equivalent obligation, it ion of the Court. requires no stretch of the realities to see, fol- This is a bill brought against the Lehigh lowing from such an equitable adjustment, a | Valley Coal Company, lessee of a coal mine, benefit on the whole shared by both classes by John Alden Lee who owns one-half of of lands alike. But in any event, since we the mine in his own right and as trustee for find that the expenditure in question proper his brother. Kate P. Dixon owns the other ly is chargeable to operation and mainte. half. The bill seeks a construction of the nance, appellant is liable under the express lease and of an agreement made on behalf terms of its contract.
of the plaintiff's interest on January 21, 1913; Decree affirmed.
a declaration that certain parts of the agreement are a fraud upon the plaintiff and Kate P. Dixon; an account to the plaintiff and Kate P. Dixon from the Coal Company,
and that the lease may be declared to be and (267 U. S. 542) LEE v. LEHIGH VALLEY COAL CO. et al. to have been since January 21, 1913, in *full
force and effect. The Coal Company is a (Argued and Submitted Jan. 22, 1925.
corporation of Pennsylvania, the plaintiff cided April 13, 1925.)
Lee a citizen and resident of New York, and No. 222.
Kate P. Dixon is a citizen and resident of
Pennsylvania. She is made a defendant, the 1. Removal of causes 314Suit may be re
bill alleges, because of her refusal to be moved to federal court at instance of defend- made a plaintiff “and because to make her ant, if codefendant is not necessary party.
such party plaintiff would oust the Court of Suit may be removed from state court to jurisdiction.” The bill was dismissed for federal court at instance of a defendant, if want of jurisdiction by the District Court, codefendant, made party by plaintiff, is not a we presume on the ground that so far as apnecessary party.
peared the arrangement of the parties was
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merely a contrivance for the purpose of, ers, petitioners, to review a judgment of the founding a jurisdiction that otherwise would Circuit Court of Appeals (290 F. 160), reversnot exist. Dawson v. Columbia Avenue Sav- | ing an order of the District Court (283 F. ing Fund, Safe Deposit, Title & Trust Co., 351), respecting claims of the United States 197 U. S. 178, 181, 25 S. Ct. 420, 49 L. Ed. and the City and County of San Francisco. 713.
Affirmed and remanded. [1-3] The plaintiff and appellant now ar
Mr. Louis V. Crowley, of San Francisco, gues that Kate P. Dixon is not a necessary Cal., for petitioners. party. When a defendant seeks to remove
The Attorney General and Messrs. James a suit from a State Court to the District M. Beck, Sol. Gen., of Washington, D. C., and Court, of course he is entitled to contend Merrill E. Otis, of St. Joseph, Mo., for rethat a party joined by the plaintiff is not a
spondents. necessary party and therefore does not make the removal impossible by defeating the ju- Mr. Justice MCREYNOLDS delivered the risdiction. Salem Trust Co. v Manufac- opinion of the Court. turers' Finance Co., 264 U. S. 182, 44 S. Ct. The bankrupt's estate consisted of personal 266, 68 L. Ed. 628, 31 A, L. R. 867. It is a property only, and there is no suggestion of different question whether the plaintiff can
a lien thereon to se*cure any of the claims repudiate the effect of his own joinder, can retain a party to the relief sought and yet from conversion of all the property is insufi.
now under consideration. The fund derived keep him on the wrong side in order to avoid cient fully to satisfy taxes due the United the effect of his own act. Without inquiring whether the plaintiff could have maintained States and the city and county of San Franthe suit alone had he so elected and had he cisco, and the allowed claims for preferred found it impossible to join Kate P. Dixon, wages. Which of these must be paid first is obviously she was a “necessary” even if not in favor of the wages, and the District Court
the question for decision. The referee ruled an indispensable party. Shields v. Barrow,
approved; but the Circuit Court of Appeals 17 How. 130, 139, 15 L. Ed. 158. It would
held to the contrary, and directed that priorbe hard upon the Coal Company to compel it to submit to an adjudication upon the ity should be given the taxes. lease, upon a fraud alleged to have been 563, c. 541 (Comp. St. § 9648), provides:
The Bankruptcy Act of 1898, 30 Stat. 544, committed against both owners, and to an account, in the absence of one of the lessors. "Sec. 64. Debts Which Have Priority.-a. The The joinder of both is much more than a
court shall order the trustee to pay all taxes mere form, As both are named they must legally due and owing by the bankrupt to the be arranged upon the side on which they be- ipality in advance of the payment of dividends
United States, state, county, district, or municlong. Menefee v. Frost (C. C.) 123 F. 633. to creditors, and upon filing the receipts of the Blacklock v. Small, 127 U. S. 96, 8 S. Ct. proper public officers for such payment he shall 1096, 32 L. Ed. 70.
be credited with the amount thereof, and in case Decree affirmed.
any question arises as to the amount or legality
termined by the court. (268 U. S. 1)
"b. The debts to have priority, except as OLIVER et al. v. UNITED STATES et al.
herein provided, and to be paid in full out of
bankrupt estates, and the order of payment in re WEST COAST RUBBER CORPORA. shall be (1) the actual and necessary cost of TION.,
preserving the estate subsequent to filing the
petition; (2) the filing fees paid by creditors (Submitted March 2, 1925. Decided April 13, in involuntary cases; (3) the cost of adminis1925.)
tration, including the fees and mileage payable
to witnesses as now or hereafter provided by No. 180.
the laws of the United States, and one reasonBankruptcy Om 346 — Claims for taxes entitled able attorney's fee, for the professional services to payment ahead of claims for wages, except actually rendered, irrespective of the number when subordinated by some relevant law.
of attorneys employed, to the petitioning credUnder Bankruptcy Act, $ 64a (Comp. St. involuntary cases while performing the duties
itors in involuntary cases, to the bankrupt in 8 9648), claims for taxes are entitled to payment herein prescribed, and to the bankrupt in volunahead of preferred claims for wages under section 64b (4), unless particular tax has been tary cases, as the court may allow; (4) wages
due to workmen, clerks, or servants which have subordinated to such claims by some relevant been earned within three months before the state or federal law.
date of the com*mencement of proceedings, not On Writ of Certiorari to the United States to exceed three hundred dollars to each claimCircuit Court of Appeals for the Ninth Cir- ant; and (5) debts owing to any person who by cuit.
the laws of the states or the United States is
entitled to priority.” In matter of the West Coast Rubber Corporation, bankrupt. On writ of certiorari by Guarantee Co. v. Title Guaranty Co., 224 A. J. Oliver, trustee in bankruptcy, and oth- U. S. 152, 159, 160, 32 S. Ct. 457, 459 (56 L.
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