85
(0#c1iU Oourt,N.D. Georgia. Jilly 6,1891.)
1.
AOTIONrToBET ASIDE
A bill to to reconvey to plaintift land which formerly longed to him is not demurraDle for want of equity from the mere fact that it ,shows that plainUff<conve}'ed the ll\Ud to C;. wllo ,then conveyed to defend. ants, where pll\intifY 8116ks rehef on the ground tbat defend,ants seoretly employed and paid C. to purchase the land, knowing at the time tha't' he wall plaintiff's agent to sell, and that pll\inti1!, relied on him for informal;ioliand advice as to the vwue of the land. , 'l'he billwleged thattbe land was of great value for the phosphate therein; tbali defendants stated to C. tll,at they did not want to buy the land for phosphate purposes, Which statement C. repEjil;ted to plaintiff; and that defendants knew this, statement was not true, but theIr object in making it was to deceive plaintiff as to the ,true value of the land." He/il, that these allegations are sufticienl;, as against 1\ demurrer, to show that defendl\Uts knew of C.'s atatements to plaintift, and caus8cHhem: to be made. ' " , REPRESEN'TATION8. ' '
OIl, EQUXTY...,.DImUltRERo
9.
i
8.
.· There is no lack .show:n on plainti1r's part when the bill 811eges that those transactions did· not come to his knowledge until October, and the suit is , brought in November. , , Faiiure to allege tender of the purcha!le moneybeloresuit is noUatal to such bill. where it dlleswlege thaI; tender was not made becausspla1nUff believed iii would be uns:vaillng, and that he is. readytq'Tepay the money w:il;h lnl;eresl; upon I;he exe-; cul;ion of a deed to him bY defendants. The bill is nol; demurrablE! for non-joinder of tbe agent, C" who is a resident of a differenl; ,disl;rict from' defendants. Rev. St.. § 787, provides that non-joinder of parties who are nol; inhabitanl;s of nor found within the district shall not constil;utemal;ter of abatement, though the judgment rendered shl\ll not conclude them, and Equity' Rule 47 authorizes the court to proceed without parties, otherwise necessary, who cannot bejoilled becau8e I;hey are out of the jurisdiction of the court.. 011 ANOTHER DISTRICT.
SAME-DJLIGBNOE
BRIJ1GING SQlT. ,
,
4. SAME-',['BNi>E_ExouslNG FAILURB.
I.
InEquity. On demurrer. Bill by Charles' H. Gross against the George W. Scott Manufacturing Company and the De So1o Phosphate Mining Company to compel a reconveyance of land. Bisby & Rinehart, for complainant. Candler, 'flwm8on k Candler, for respondents. NEWMAN, J. 'The case made by the bill is substantially as follows: Charles H. Gross, complainant, is a citizen of the state oCPennsylvania. The George W. Scott Manufacturing Company and the De Soto Phosphate Mining Company, defendants, are corporations organized and eX.. istingunder the laws of the state of-Georgia, and citizens of that state. That complainant was in October, 1889, the owner of certain lands on Peace river, in the state of Florida. That one John Cross, a resident of the state of Florida, had been continuously for several years prior thereto, and was' at that time, complainant's agent to protect and make sales of said lands ; under a general contrllct, he received 10 per cent. of the proceeds of the sales, when other terms were not specia.llyagteed upon ;8.nd thatcomplainaht relied: upon said Cross in these respects. That about the 7th day of October. 1889, CrOS!'
86
nl!:l'ORl'JSR,
vol. 48.
came to Philadelphia. where complainant resided, and stated that the to buy lands fromqomplainant, Scott Manufa<;tu,ring Company and offered $2.50 per acre for the same. Complainant inquired if there were on lImds" but Cross represented that the Scott Manufacturing Company desired the lands for other purposes. Complainant, having been accustomed and obliged t6rely upon hig agent for information in said lands, acted thereon, and, on the, faith ofhis;representatibns, contracted to sell the saIne at $2.50 Cross" direction, complainant .made him a perac:re. Thereupon, deed to the lands, received his check for the purchase price, and paid Cross 10 per cent. of the amount as The inquiry plainant made· of. Cross was material and important, and upon the existence or non-existence inslilid lands of phosphates depended in a large degree their value. That prior to this sale 'phosphates had been discovered on lands ori Peace river 'of a very ,valuable cha,racter, which was well known to Cross and to defendants. Complainant did not know until six months. after the sale that the lands contained any phosphates,and cOn:iplainant aver$'said.lands were rich in phosphates, and were worth from $25 to $100 per acre at the time of the sale, and some of the land worth over $100 per acre. That the George W. Scott facturing Company, through its president, GeorgeW.Scott, and other officers, had before the said sale employed Cross to purchase said lands of complainant under contracttopay him for his services and expenses while attending t/)thesame;and that said company did pay Cross' expenseS, from Flox:ida to PhilaQelphia, and compensation 1P money, while engaged in negotiating the purchase. That said company knew that complainant's agent'to sell the. land, and that complainant relied upon him as such, and for information concerning the value of the lands. Complainant did not know until October, 1890; of this arrangeOross .and: defendant..'l;'hat the Scott Compliny engaged the ;Eie,ryJqes of Oross ,fof the.ipurpose and with tb intent of influencing him to act in its interest, and to disregard his duties: to complainant, and such was its effect. On the 12th day of October, 1889, Cross made the Scott Manufacturing Qw;upanya deed to' certain lands, embracing a part of the land conveyed by complainant to Cross, and on the 18th day iii to said company to' certain lands, including the remainder .oftbe 11l,nd conveyed by defen,dant to Cross, and on. 21st the Scott :Manufacturing Company conveyed tQ the De Soto Phosphate CompallY part of the land conveyed by an,t:toOross, (which is described, but is immaterial here.) The two de.fendant corporations are cOqlposed, substantially, of the. same members and other officers are substantially and stockholders. The company had been for a year before 1889 i miIJ,ing phosphates opPeace river and vicinity. The Scott Manufl;l.cturing Company had for some years manufacturing fertilizers in Atlanta, Ga. That the tw,ocompanies are, in interest, the,same, though sepuJ;ate corporatiop'ljl;j Tpatthe phosphate company knew that .Cross complainant's agent, as stated, when the S,cott COJD:pany employed
GROSS V. GEORGE W. SCOTT MANUF'a CO.
37
him, and knew of the fraud on complainant, and acquired its interest with a knowledge of such fraud. Long before October, 1889, defend· ants'officers and agents had been examining lands on Peace river, and purchasing phosphate lands for their purposes, or to sell. Before Cross' visit to Philadelphia, the president of the manufacturing company, or some other officer, gave. Cross a description of complainant's land which the company wished to purchase, and secretly employed Cross to purchase the same as low as he could. The defendants and Cross knew before they bought the land that they contained phosphates, and that their actual market value was many times greater than the amount paid thereWhen Cross was employed by defendants, as stated, their officers and agents represented to Cross that they wanted the land to control the use oLthe river, and for other purposes, and did not want them for phosphates; which statements were false in fact, and made to deceive complainant, and conceal from him the value of the land; and com plainant was deceived, and, relying upon Cross, made no further inquiry. That the legal title of said land is still in the defendants. That com· plainant is ready and' willing to pay the defendant the George W. Scott Manufacturing Company the amount paid complainant for the lands, with interest thereon, with the execution and delivery of the deed to complainant, and complainant would have made tender thereof to said company before filing this bill but for the belief and conviction that such tender would not have been accepted. Complainant tenders in the bill to the defendants the fUll, amount of purchase money received for the land from Cross, with legal interest thereon, and offers to pay the Same in any manner or time that the court may decree, upon reconveyance of the land unincumbered, in the same or in as good condition as when conveyed to defendants. Discovery is waived except as to 14 interrogatories which were propounded to the defendants. The prayer is for an order and decree that the defendants convey, by good and sufficient deeds ()f conveyance, the lands described, and for an account of all the and phosphate ores, if any, Utkeh from said and for damages, if any, to the 4md, and for such other andJurther relief as to the court may seem just to make. There is also for injunction; which has not been insisted upon. The demurrer isupoD grounds: First, that there is no equity in the bill; second, that John Cross is a necessary party to the bill. The first ground of the demurrer, that there is no equity in the bill, is subdivided in the argument, and in the brief filed by counsel, and urged, upon four grounds:. "First, because it appears from the bill that complainant dealt with and conveyed the land to Cross, and did not deal with or convey to d£1ft'ndants. Nor is it alleged that defendant companies. or either of them. knew of any of the representations Cross made to complainant." The whole case made by complainant in this bill is grounded Up00 the facts that the defendants secretly employed Cross as their agent, and paid hilI). as such, to purchase the land, knowing at the time that he was theage,ntJorcolllplainantto sell the land, and tbat complainantre. lied on him for information and advice as.to the value of the mndand
88 tlle,pl'lce Qf laud to
. FEDEllAL REPORTER,
/lame.
to. be ixnmaterial, in view of the general the,othel'·facts,set up. Asto.the:positiori that defendants knew 'orCross' representations to compill-inllnt, the !illegation inthe,<bill is,that:defendantsstatedto. Cross "that they ',did not to buytb.elands aforesaid for,the phosphate that was then "that said Cross reon them, or, forphosphai.te peateq said ,etatementsand, repreeentations, in Bubstance,to complainant,"'·aud,' further, "that defendants knew they were not true, and that the principal objeot of defe:ndants in making such statements and rep.. reset;l.tlltions wnaw mislead and deceive your orator, and to conceal from hQnthe true vaJue of this said land." ,It would seem from this that the not only knew of the representations made by Cross to comthernto bemade., plainants, It is next insisted that..-:i9 noaUe/(atiotlof, fraud on the part of defendants In procuring title to them, or either of them, but thl\t t\1<i!y procured title to be made to Crosa.Where reJief is aakell on,the grolllldof fraud, the bill must state the casewith certainty and definiteness. It must allege speoific acts and lanA generid charge of fraud is insufficient, nor is it enough that fraud might be " . I think thissubdivisionl Of the ground of the demurrer has really been disposed t>f'in what has just been said, and need not be repeated here. The allegations seem. to be sufficiently specific and definite. All the acts complained of seem to be fully set out, and, as said before, the basis of the case made forielief is that the Scott Manufacturing Company employed Cross as its agent, knowing at the time that he waS the complainant's agent, and influenced h,im to disregard his duty to complainant. . . It is saId next that no diligence is shown by complainant to protect his rights. The statement in the bill on that subject is that"Orator avers that it did 110t come tobls knowledge until six months after the execution and delivert ot the deed [allUding to the deed made by complainant to Cross] that thlliand thereby cOllveyed contained any phosphate." And afterwards in thebi1l"That orator avers that he did not know until the. early part of October, 1890, that said John CroBshad received, or had agreed to receive, from said company, its officers or agents, any compensation for his services rendered in buying said land, or his expenses while attending thereto, or was otherwise in the employ of said company, its officers or agents, to perform service to it or them inconsistent with his duties as your orator's agent." The bill was filed November 3, 1890j so that, certainly, no lack of diligence is apparent. .. Further objection urged to the bill is that it does not allege tender of the purchase of land, The statement in the billori this subject is as follows: , . , "Your orator avers tbfl.the is ready and willing to pay to the defendant the Dlallufacturingcoml.snythe consideratlionmoney paid your orator for said interest thereon, upon the execution and delivery of a deed of
The· {I\ct;tharefore,that complainant conveyed
GROSSV. GEORGE W. SCOTT MANU:r'G CO.
conveyance thereof to your 0l1a1or, and avers that he would have made a tender thereof to said company .OOfore filing this bill but for the belief and conviction that such tendllt woqld not have been accepted. And your orator hereby tenders tothe.defendants the full amount of purchase money, aforesaid, recei ved for said lands from tht' said Cross, with legal interest thereon, and hereby offers to pay the same in such a mallner and at such times as this honorable court may decree, upon the reconveyance thereof to your orator, unincumbered, and in the same or as good condition as. when they were conveyed to the defendants, and to. abide by such other conditions as this honorable court may deem just and eqUitable." It would seem that complainant offers to do equity, and to repay the purchase money of the land with interest. If complainant should, on the final hearing, appear to be entitled to the decree, this matter can be fully controlled, and full justice done to defendllnts, in this respect, in the decree and judgment of the court. I do not understand the rule to be that tender back of the purchase money in a case like this is lutely essential for maintaining either a bill in equity or proceeding at law. It iSB matter that is controlled very largely by the circumstances of the case; and 1 would be unwilling in this case to tum the complainant ,out of court for lack of a· former· tender, when all the rights he may have in that respect can be fully protected, and his claim for a payment allowed in ample measure. . The second ground' for demurrer, that John Cross is a necessary party to the bill, seems to be controlled by the statute, the equity rule, and the decisions on the subject. The bill states that John Cross, at the time of the transaction referred to in the bill, resided in the state of Florida, and it is to be presumed that he still resides there. Section 737, Rev. St. U. S. is as follows: "When there are several defendants in any suit at law or in equity, and one or more of them are neither inhabitants of nor found within the district in which the suit is brougllt, and do not voluntarily appear, the court may entertain jurisdiction, and proceed to the trial and adjUdication of the suit bethe parties who are properly before it; tbejudgment or decree rendered therein shall not conclude or .prejudice other parties not regUlarly served witb procesl!l nor voluntarily appradng to answer; and non-joinder of parties who are not inhabitants of nor foun,t within the district, as aforesaid, shall not constitute matter of. abatement or objection to the suit." Equity Rule 471s as follows: ..In all cases where .jt .lIball appear to. the court .that persons, who might otherwise be deemed necessary or proper parties to suit, cannot be made parties by reason of their being out of the jurisdiction of the court, or in.capable otherwise of being made parties; or because· their joinder \vould oust the jurisdiction of the court as to the parties before the court, the court may, in their discretion, proceed in the, cause without making such persons parties; and. in such case the decree shall be without prejUdice to the rights of the absent " There are three o}ass!lsof parties to a bill in equity: Ji1irst, merely formal, altho:ugh proper, pa.1'tiesj 88con.d,' those having an interest in the controversy, arid whose intei:'eBtand absence from the bill being called to the attention of the court,' it will require to· be made parties before de-
40
FEDERAL REPORTER,
ciding the,case, if within its jurisdiction,· hut if· not within its jurisdiction, the court'will administer such relief asmsy be in its power between the'phfties before it;· third, parties, without whom the court wpt not proceed with the case at' all. Shields v. Barrow, 17 How. 13Gi ljarney V,. Baltimore Oity, 6 Wall..284. The prayer pfthe bill in this case, as has boon stated, is for a recon· veyance by defendants to complainant of the land in controversy, and for an aC<lount'of'phosphates, if any,takenfrbm, or damages to, land. Now, can the right of complainal:lt'to have this decree be de::': termined withQut Cross as party? According to the bill, the deed made by complainaotto Cross, and by Cross to defendant, was merely formal, and for con\(enience in getting the title into defendants. While itseelIls he would be l!o' pJ.'oper party. thei court is not prepared to say that his presence is indispensable to grahting the relief prayed for. It appears acted :only as an intermediary between complainant and defendant, and that the real substantial issue is between the present partie/lto the bill. Conforming to the statute and equity rule above quoted, au:dto the decisions of thtLsupreme court on the subject, this is a case in which the c6urt should' proceed with the parties before it,and the demurrer on this last groundoannot be sustained. Fos. Feel. Pr.§ 50. See, also, Oonolly v. Wells, 33 Fed. Rep. 205, in which the decisions of the supreme court on the subject are collated. The demurrer in this (laSe will be overruled.
,CHAMBERLAIN ". BITTERSOHN.
(OCrcuit Oourt, D., South. CaroUna. 'November 4,1891.) WRITS-SERVIC» 'OF PROCESS;.,-llIFlI'1CCT Oll AMENDMENT.
" on appearance motion. to set asIde the complamt for frQtn the Slll!lmons,.the aUo",s the summons to ,be amended so as 'to state that 00: default of answer pla\ntlff apply to the court," whereas be'fore it.reaa, "wHl take judgment against y6U, "the order allowing the amendment is defendant, and the original service will not be set aside because the copy served did not conform to the summons as amended.
·
At La.W. .On motion to set aside service of the summons· . ·,Mitchell &- Smith, for plaintiff. ;Northrop & Memminger, for'defendant.
SIMONTON, J. In this case the having been served with copysummobsand complaint, employed an attorney. Becoming satisfied for some reason, he changed his attorney, and employed the gentleman whQmnde thislIlotion. When the present attorneys under(lIl,Se"tpey entered a special appearance for the purpose of a mothe complaint "for in that it does not.conio;J;W-, .t9 This motion was heard· on. 21 st of OctQ>bel1j ,and