Brown v. Beacom , 98 C.C.A. 520 ( 1909 )

McDOWKBB, District Judge.

The appellants were the complainants below. The bill here was filed for the dissolution of an alleged partnership between Jno. W. Brown, Buena W. Brown, and the defendant, Beacom, and for an accounting. In part the bill reads as follows:

“To tlie Judges of ¡he Circuit Court of the Unitfi(l States for the Northern District of West Virginia:

“John W. Brown and Buena W. Brown, his wife, residents of the city of Clarksburg' and citizens of the state of West Virginia, bring this their bill against Johnson W. Beacom, a citizen of the state of New York, blit having ¡1 place of business in the state of West Virginia, in the Northern district thereof.

“The plaintiffs complain and say that heretofore, to wit, on the 12th day of January, 11)04, they entered into an agreement with said defendant, Bea-com, and one George K. De Golia, who was then and still is a citizen of the state of New York, which agreement was reduced to wilting, whereby it was agreed among other things, that the said I)e Golia, in consideration of the sum of fweniy-iive hundred dollars to he paid him by the plaintiffs, was to drill a well for the production of uutmal gas upon a tract of land containing about three hundred acres belonging in fee simple to the plaintiff Buena W. Brown, lying at or near the village of Wilsonlrarg, in the county of Harrison, state of West Virginia : that the defendant, Beacom, upon his part agreed to build, erect, and furnish upon said land, or upon a small parcel of laud near thereto, a building or buildings and ail necessary machinery, including boiler and engine, carbon plates, pipe, and liftings, packing houses, and all other necessary machinery and buildings for the equipment of a first-class carbon black manufactory plant rompiere, at Ids own expense and cost, which plant was to lie built of a sufficient size and to embrace sufficient land or space to produce fifty barrels of carbon black per day, and was to be finished and equipped at the beginning of operations to have at least a capacity of fifteen barrels of carbon per day, and was to be increased, as it became the interest of all parties 1o said agreement, to said full capacity of fifty barrels of carbon black per day, provided that a sufficient quantity of gas should he furnished the said Beacom by plaintiffs and said De Golia to warrant the increase per day, and said gas was at, all times to be furnished to the said Bea-com free of cost at, the plant or factory by the plaintiffs and said De Golia so long as it could he produced from said tract of land l>y reasonable drilling. It was further agreed that. t,lie title and ownership of the factory or plant was to remain in the said Beacom, and that he was to have the right to remove the same at any time, should gas not he produced in sufficient quantities to justify running said plant. It was further agreed that said De Golia should drill ¡1 well to completion with all due diligence until completed for the production of gas, and was to furnish at his own expense all four-inch pipe necessary for tubing said well, and all pipe necessary t.o equip or furnish four-inch lines for conveying gas from such well to said plant or factory, including fittings, gates, packers, regulators, and cost of laying line and tubing well, and it was further agreed that the cost of furnishing said-tubing and lines and laying the same, together with cost of fitting gates, packers, and regulators, was to be advanced'by said defendant, Beacom, and the title to such pipe, fittings, etc., was to remáin in him until be was fully reimbursed for the amount so expended out of' the proceeds derived from operating said plant or factoi*y. and the same was to be deducted from the share or portion of the proceeds of said plant belonging to said Be Golia.

“II. It was further agreed in said contract that of -the proceeds derived from said business, after all expenses were paid, including all materials for marketing the carbon black, labor, oil, stationery, etc.,, the plaintiff Buena W. Brown should have two-sixths (z/6) or one-third (%), defendant, Beacom, three-sixths (3/o) or one-half (%), and the said De Golia one-sixth (Vo), and it was further agreed that all sale bills, freight bills, correspondence, and books of account used in connection with the manufacture of said carbon black and all other business pertaining thereto should be,open to the inspection of all parties to said agreement, and that all parties thereto should be consulted and advised upon all matters of importance relating to said business. Copy of said agreement is herewith filed as ‘Exhibit A,’ and is prayed to be taken and read as part of this bill.

“III. Plaintiffs further say that plaintiff John W. Brown, on or about the 11th day of November, 1004, by deed of that date from one Harriet B. Stone, assignee or grantee of said De Golia, purchased the entire interest of said De Golia under said contract in said plant, and the plaintiffs and defendant, Beacom, are the sole and only parties now interested under said contract and in said plant, and plaintiffs are therefore entitled to -receive one-half of the receipts of said plant, after paying expenses, as aforesaid. Certified copy of said deed is herewith filed as ‘Exhibit B.’ ”

The theory of counsel for complainants is that John W. Brown became a partner by reason of his purchase of the De Golia interest and the consent of Mrs, Brown and Beacom.

We have not considered this case on the merits. In the Judiciary act of 1875 (Act March 3, 1875, c. 137, § 1, 18 Stat. 470), as amended (Act Aug. 13, 1888, c. 866, § 1, 25 Stat. 433, U. S. Comp. St. 1901, p. 508, 4 Fed. Stat. Ann. p. 266), is the following;

“ * * * Nor shall any circuit or district court have cognizance of any suit, except .upon foreign bills of exchange, to recover the contents of any promissory note or other chose in action in favor of any assignee, or any subsequent holder if such instrument be payable to bearer and be not made by any corporation, unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer has been made.”

In the bill it is alleged that De Golia and Beacom are citizens of New York. John W. Brown is the reinóte assignee of De Golia of all the rights of which he is alleged to be possessed. Not only is John W. Brown a party complainant, but his interests and alleged right to relief are as entirely antagonistic to the interests of Beacom as are those of Mrs. Brown. While the clause of the statute above quoted is confusingly worded, we are of opinion that under the construction which has been put upon it (see Mexican R. Co. v. Davidson, 157 U. S. 201, 15 Sup. Ct. 563, 39 L. Ed. 672), there is in the case before us room for discussion only as to the meaning of the term “chose in action” as used in the statute. This language is comprehensive, and seems broad enough to cover the right of John W. Brown under any aspect of this case. If he is a partner, his.right of action arises ex contractu. If he is not a partner, and if his right is only to receive payment for drilling the well out of the profits earned by Beacom, still his right of action, if any, arises from an alleged breach of contract. The decisions seem to establish that such a right of action is a “chose in action” within the meaning- of the statute. See Bradley v. Rhines, 3 Wall. 393, 19 L. Ed. 467; Plant v. R. Co., 152 U. S. 71, 14 Sup. Ct. 483, 38 L. Ed. 358; New Orleans v. Benjamin, 153 U. S. 411, 14 Sup. Ct. 905, 38 L. Ed. 764; R. Co. v. Davidson, 157 U. S. 201, 15 Sup. Ct. 563, 39 L. Ed. 672; Glass v. Concordia, 176 U. S. 207, 20 Sup. Ct. 346, 44 L. Ed. 436 ; North American Co. v. Morrison, 178 U. S. 262, 20 Sup. Ct. 869, 44 L. Ed. 1061. The trial court would have had no jurisdiction of a bill by De Golia and Mrs. Brown against Beacom, and hence had no jurisdiction of the suit by Airs. Brown and De Golia’s assignee against Beacom.

It follows that the cause must be remanded, with directions to the court below to dismiss for want of jurisdiction, with authority to make such order as to the costs below as shall seem to said court to be just. The costs in this court are adjudged against the appellants. Railroad Co. v. Swan, 111 U. S. 379, 388, 4 Sup. Ct. 510, 28 L. Ed. 462.

Reversed.