Submitted January 24, 1912. Decided February 19, 1912.
Errors assigned as to finding of citizenship of a party dismissed from the suit at instance of appellant are not here for review except as to the force and effect to be given to a decree pro confesso against other defendants before dismissal of the bill. Under the Foraker Act of April 12, 1900, 31 Stat. 85, c. 191, jurisdiction of the District Court of the United States was that of the District and Circuit Courts of the United States; the additional jurisdiction conferred by the act of March 2, 1901, 31 Stat. 953, c. 812, did not extend the jurisdiction so as to embrace all controversies in which any litigant on either side is a citizen of the United States or a subject of a foreign country. The District Court of the United States for Porto Rico has not jurisdiction of a cause in which the sole plaintiff is a citizen of Porto Rico and any of the defendants are citizens of Porto Rico, notwithstanding one or more of the defendants may be citizens of the United States or of a foreign country. By the act of March 2, 1901, Congress did extend the jurisdiction of the United States District Court for Porto Rico by cutting down the necessary jurisdictional amount and dispensing with diversity of state citizenship, by substituting United States citizenship therefor. The final decree following a pro confesso order is only such a decree as would be authorized by the state of the pleadings when the order was entered. If a bill is fatally defective, showing that the court had no jurisdiction, it is error to allow a pro confesso; the order should be vacated, and the defaulting defendant allowed to defend. Where an amendment is allowed that changes the character of the bill and creates a jurisdiction not theretofore existing, the court should set aside a default and give time to defend. A decree nunc pro tunc presupposes a decree allowed or ordered, but not entered through inadvertence of the court, or a decree under advisement when the death of a party occurs. Mitchell v. Overman, 103 U.S. 62. No attempt at revision having been made at any time, there is no ground to enter a decree nunc pro tunc in this case on any known ground of equity procedure. Gray v. Brignardello, 1 Wall. 627. 3 Porto Rico Fed. Rep. 67, affirmed.
Mr. Frederick L. Cornwell and Mr. N.B.K. Pettingill, for appellant:
The court below had jurisdiction of the case and of the bank as a party thereto.
The defendant bank was, in law, a Spanish corporation. It did not cease to be Spanish because by the cession of Porto Rico its field of activity was no longer within Spanish territory. Society c. v. New Haven, 8 Wheat. 464, 483; Society c. v. Pawlet, 4 Pet. 480, 502.
Even if the bank was not a Spanish corporation, the presence of one party defendant, who was a citizen of the United States, was sufficient to give the court jurisdiction of the cause and of all proper parties thereto.
A corporation owes allegiance to the sovereignty which created it and must be considered a citizen or subject of that sovereign. Bank of Augusta v. Earle, 13 Pet. 519; Insurance Co. v. Francis, 11 Wall. 210; Shaw v. Quincy Mining Co., 145 U.S. 444; Jellenik v. Huron Copper Co., 177 U.S. 1.
The existence of the bank as a Spanish corporation could only be terminated by legal dissolution or by forfeiture by that sovereignty. Frost v. Frostburgh Coal Co., 24 How. 278.
One foreigner or citizen of the United States is a party sufficient to sustain jurisdiction.
This question has never come before this court for adjudication. The original construction given the statute by the court below was right. That result is logical.
It is consistent with the ordinary and simple meaning of the language used. If Congress had intended to restrict the jurisdiction to cases where all parties, either plaintiff or defendant, were within its provisions, it could very easily have made that meaning plain.
For definitions of the word "either" see Webster, as "one or another of any number". That definition is applied as its ordinary legal meaning. Lafoy v. Campbell, 42 N.J. Eq. 34; Messer v. Jones, 88 Me. 349, 356; Ft. Worth Co. v. Rosedale Co., 68 Tex. 169[ 68 Tex. 169]; Dew v. Barnes, 54 N.C. 149; Graham v. Graham, 23 W. Va. 36, 43; People v. Willis, 39 N.Y.S. 987, 989.
The word "parties" is used in its sense of ordinary legal acceptation analogous to its use in such phrases as "necessary parties," "indispensable parties," "parties litigant," etc. There is nothing to show that Congress intended to use the word in any technical or restricted sense. This court will take judicial notice of political conditions and the general purposes of legislation and so doing it is matter of history that the Federal court of Porto Rico was established, and its jurisdiction afterwards enlarged by this amendment, for the very purpose of securing full protection to the property rights of the American citizens and foreigners resident in Porto Rico.
As the object of the amendment was to enlarge the jurisdiction, it should be liberally construed for that purpose.
In Valecilla v. Hermano, 2 Porto Rico Fed. Rep. 46, the District Court followed this court in Smith v. Lyon, 133 U.S. 316, construing the jurisdictional acts respecting diverse citizenship, enacted for the purpose of meeting conditions in the States the very opposite of those to meet which the Porto Rican statute under discussion was enacted.
But see distinction aptly expressed in Garrozi v. Dastas, 204 U.S. 73.
Therefore, whether or not the defendant bank was in such sense an alien institution as to aid in sustaining the jurisdiction, that jurisdiction properly and sufficiently attached because one of the parties defendant — and the only indispensable one — was a citizen of the United States.
The defendant bank is not an indispensable party. Brewster v. Wakefield, 22 How. 118, 128; Nalie v. Young, 160 U.S. 642; Jerome v. McCarter, 94 U.S. 736.
Whether, therefore, the bank was a prior or subsequent mortgagee as a matter of law, it was nothing more than a mortgagee, and could not have been, under the above authorities, an indispensable party.
Laches is not a defense to a suit for foreclosure of mortgage, that defense being confined to cases of a character where no statute of limitations is directly applicable and the jurisdiction is not concurrent. Story's Equity Juris. (13th ed.), § 1520; Rankin v. Scott, 12 Wheat. 177; Cross v. Allen, 141 U.S. 528; Met. N. Bank v. Dispatch Co., 149 U.S. 448; Boone v. Pierpont, 28 N.J. Eq. 7; Diefenthaler v. New York, 111 N.Y. 331; Fullwood v. Fullwood, 9 Ch. Div. 176; In re Baker, 20 Ch. Div. 230.
A court cannot relegate a litigant to another forum merely because, in its opinion, such course would be more expedient. McClellan v. Garland, 217 U.S. 268, 282.
Where a Federal court will be deprived of its jurisdiction based upon the character of the parties by the presence of some party not absolutely indispensable, a complainant will be allowed to dismiss as to any such party if a proper decree can be entered in his absence which does not affect his interest — which was exactly what complainant asked leave to do when forced to dismiss as to the bank. Vattier v. Hinde, 7 Pet. 252, 261; Horn v. Lockhart, 17 Wall. 570, 579; Tug c. Co. v. Brigel, 30 C. C.A. 415; Boatman's Bk. v. Fitzlen, 68 C. C.A. 288, 296.
This suit was begun before the one in the insular court, and by the filing of a foreclosure bill the mortgaged property is theoretically placed in custodia legis. Hence the court below and not the insular court "first took possession of the res." Farmers' L. T. Co. v. Lake St. E.R. Co., 177 U.S. 51.
A decree should have been granted against defendant Cuebas.
Under the provisions of equity rules 18 and 19, a complainant after an order pro confesso is entitled without the production of supporting proof to such a decree as is warranted by the allegations of his bill. Thompson v. Wooster, 114 U.S. 104; Ohio Cent. R. Co. v. Central Trust Co., 133 U.S. 83, 90.
The court's refusal of this request of complainant was not based upon any question of proof, but upon the supposed infirmities of the bill itself.
Upon the death of a party defendant during the progress of a cause the court may, upon request of complainant, enter its final decree nunc pro tunc as of a date prior to such death so as to avoid the necessity of proceedings for revivor. Mitchell v. Overman, 103 U.S. 62; New Orleans v. Gaines' Adm'r, 138 U.S. 595, 612; Campbell v. Misier, 4 Johns. Ch. 342.
No brief filed for appellees.
Mr. F. Kingbury Curtis and Mr. Henry A. Stickney, by leave of the court, filed a brief as amici curiae on behalf of Banco Territorial y Agricola:
Since the bank is not a party to the appeal, the questions raised by the first, second and third assignments of error are not before this court for determination. Marshall Field Co. v. Wolf Bro. Co., 120 F. 815; Wilson v. Kiesel, 164 U.S. 248; Boyd v. Stuttgart A.R.R., 84 F. 9; Ill. Trust Sav. Bank v. Kilbourne, 76 F. 883; Davis v. Trust Co., 152 U.S. 590; Grand Is. W.C.R. Co. v. Sweeney, 95 F. 396; 103 F. 342, 348.
By the voluntary dismissal as against the bank, the complainant is precluded from questioning the decision of the court below to the effect that it had no jurisdiction in the cause while the bank was a party defendant. Hill v. Chicago Evanston R.R. Co., 140 U.S. 52 at p. 54.
The court below correctly decided that with the bank as a party defendant there was no jurisdiction in this cause.
The bank is not a party to this appeal. The appellant has elected to dismiss her bill, both as to it and the other Porto Rican defendant, Antongiorgi, for the express purpose of creating jurisdiction of a suit between complainant, a citizen of the Island of Porto Rico, and the remaining original defendant, Felipe Cuebas, a citizen of the United States. Her bill, as amended, contains no reference to the bank, or even of its existence. It was the bill, as thus amended, which was dismissed by the court. We mention this because two of the errors assigned and argued in the brief of counsel for appellant relate to the action of the court, first, in holding that the bank was in law a citizen of Porto Rico, and, second, in holding that, that being so, the jurisdiction of the court to maintain the suit, with citizens of Porto Rico, on both sides of the case, would be defeated. The action of the court in respect to the matter first mentioned is not here for review, and the other only in so far as it may become necessary to deal with it for the purpose of determining the force and effect to be given to the decree pro confesso against Felipe Cuebas.
It was not error in the situation of this case to deny a final decree against the succession of Felipe Cuebas upon the foundation of the pro confesso order made on a rule day five years theretofore. When that pro confesso was taken against Cuebas the suit was one of which the District Court had no cognizance. The sole complainant was a citizen of Porto Rico, and Cuebas was a citizen of the United States and therefore subject to be sued in that court by the complainant, if the citizenship of the other persons on the same side was such as not to defeat jurisdiction. But that was not the case. One of them, Francisco Antongiorgi, was alleged in the bill to be a citizen of the Island of Porto Rico. The other defendant, the bank, was averred to be a corporation organized under the laws of Spain and a citizen thereof. But later, as we have already stated, the bank's plea that it was a corporation under the laws of Porto Rico and a citizen of Porto Rico was sustained. The case was, then, one which, upon the face of the bill, showed that one of the defendants had a citizenship common with that of the complainant, and later it turned out that a second had a like citizenship.
It is not and cannot be claimed that the complainant's bill asserted any right, title or claim arising under the laws or Constitution of the United States. If, therefore, the District Court had jurisdiction, it must depend upon diversity of citizenship alone.
It is claimed that the fact that one of the three defendants was a citizen of the United States conferred jurisdiction, although the other two were Porto Ricans, with a citizenship identical with that of the complainant. That this would not have been so under the Foraker act of 1900 is conceded. That act gave to the District Court for Porto Rico the jurisdiction of the United States District Courts, and added to that the jurisdiction of cases cognizable in Circuit Courts of the United States. The contention is that this extraordinary stretch of jurisdiction is conferred by the third section of the act of March 2, 1901, c. 812, 31 Stat. 953. That section reads as follows:
"That the jurisdiction of the district court of the United States for Porto Rico in civil cases shall, in addition to that conferred by the Act of April twelfth, nineteen hundred, extend to and embrace controversies where the parties, or either of them, are citizens of the United States, or citizens or subjects of a foreign State or States, wherein the matter in dispute exceeds, exclusive of interest or costs, the sum or value of one thousand dollars."
Shortly stated, the construction placed upon this section is, that the word "parties" is not used collectively, meaning all of the litigants on the one side or the other, but is intended as if the word "litigants" had been used, and that the words "or either of them" means "any of them," and that the jurisdiction conferred embraces all controversies in which any litigant on either side is a citizen of the United States or a subject of a foreign country.
The construction contended for is out of accord with that placed upon the act in Vallecillo v. Bertran, 2 P.R. Fed. Rep. 46, a construction constantly adhered to by the court below since 1906. It is also a construction out of harmony with a long line of decisions of this court construing the jurisdictional clauses in the various statutes dealing with the question of jurisdiction dependent upon diversity of citizenship. The first of the decisions referred to involved the meaning of the clause in the Judiciary Act of 1789, conferring jurisdiction over controversies "where an alien is a party, or the suit is between a citizen of a State where the suit is brought and a citizen of another State." The question arose in Strawbridge v. Curtiss, 3 Cranch, 267, whether it was essential to jurisdiction that all of the parties on one side should have a citizenship different from that of all of the parties on the other. In that case the complainants were citizens of Massachusetts and some of the defendants were citizens of the same State. But one of the defendants was a citizen of Vermont, and this fact was claimed to give jurisdiction. To this, the court, by Chief Justice Marshall, said:
"The court understands these expressions to mean, that each distinct interest should be represented by persons, all of whom are entitled to sue, or may be sued, in the federal courts. That is, that where the interest is joint, each of the persons concerned in that interest must be competent to sue, or liable to be sued, in those courts."
This construction of that clause and of like words in later statutes, concerning jurisdiction dependent upon diversity of citizenship has been followed in many cases, among them being Coal Co. v. Blatchford, 11 Wall. 172, and Smith v. Lyon, 133 U.S. 315. In the case first referred to Mr. Justice Field stated the matter in words quite as applicable here, by saying: "If there are several co-plaintiffs, the intention of the act is that each plaintiff must be competent to sue, and if there are several co-defendants each defendant must be liable to be sued, or the jurisdiction cannot be sustained."
In view of these decisions we should be slow to conclude that Congress intended any other rule as to the arrangement of the parties where diversity of citizenship is the basis of jurisdiction than that laid down in construing like statutes upon the same subject. The contention that from the evident intention of Congress to enlarge the jurisdiction of the court we should infer an intent to confer jurisdiction to the extent claimed is without merit. Congress, in very plain words, did extend the jurisdiction, first, by cutting down the necessary jurisdictional amount to one thousand dollars, and second, by dispensing with diversity of state citizenship. United States citizenship is substituted for diverse state citizenship.
We, therefore, conclude that the court had no jurisdiction of this cause when the pro confesso order was entered against Felipe Cuebas.
The final decree following a pro confesso order is only such a decree as would be authorized by the state of the pleadings when the order was entered. Frow v. De La Vega, 15 Wall. 552; Daniel's Chancery Pl. Pr., pp. 525-528, 5th ed., and notes; Simmonds v. Palles, 2 Jones and La Touche's 489; Hardwick v. Bassett, 25 Mich. 149; McDonald v. Mobile Life Ins. Co., 56 Ala. 468. If the bill was fatally defective upon its face, showing that the court had no jurisdiction, it was error to allow a pro confesso, and upon the court's attention being called to it, it should have vacated the order and allowed the defaulting defendant to defend. Nelson v. Eaton, 66 F. 376; Blythe v. Hinckley, 84 F. 228, 244; Eldred v. Am. Palace Car Co., 103 F. 209.
That the bill was subsequently amended so as to confer jurisdiction against Cuebas as sole defendant, by dismissing the bill against the other two defendants and striking out the prayer of the bill that any and every claim, interest, or incumbrance be forever barred and cut off, did not justify a decree based upon the order pro confesso made prior thereto. Upon such amendment being made, so completely changing the character of the bill, creating a jurisdiction which had not theretofore existed, the court should have set aside the default and given time to defend.
But the allowance of a final decree nunc pro tunc would have been still more inadmissible. Cuebas had been then dead for, apparently, some years. There had been no revivor. If there had been his representatives would doubtless have moved to vacate the pro confesso decree upon the ground suggested, and it would have been error to have denied that motion. The motion to enter a decree as of a day before his death would, if allowed, have been fruitless, for it would bear a date antecedent to the acquirement of jurisdiction, and therefore erroneous, if of any validity.
But no decree nunc pro tunc was admissible. Such a decree presupposes a decree allowed, or ordered, but not entered, through inadvertence of the court; or a decree in a cause which is under advisement when the death of a party occurs. Mitchell v. Overman, 103 U.S. 62. There is no claim that a final decree in pursuance of the allegations of the bill had ever been directed and through inadvertence of either court or counsel omitted from entry. There was, therefore, no authority for a decree nunc pro tunc upon any known ground of equity procedure. Gray v. Brignardello, 1 Wall. 627.
No effort to revive the cause against the succession of Cuebas was at any time made. The complainant stood upon her right to a final decree nunc pro tunc. When this was denied she still made no effort to revive the cause, though Cuebas had been dead a long time. It was not error in such circumstances to dismiss the bill.