Howard v. Linnhaven Orchard Co. , 228 F. 523 ( 1913 )

WODVERTON, District Judge

(after stating the facts as above). It was submitted that plaintiffs’ right of action, whatever they had, was legal and not equitable. This upon the hypothesis that the true theory of the complaint is that the plaintiffs have rescinded their contracts, and that, having rescinded, they could only have their actions at law to recover back what they had paid on their contract prjce.

[1] According to the great weight of authority, a vendee is vested with a lien for the amount of the purchase price paid upon a contract for the purchase of real property. By an equitable conversion, the purchaser becomes the owner of¡ the land contracted for (equitable though his title may be), while the vendor retains the legal title, but in trust for the purchaser. Every advancement of purchase money increases the vendee’s..interest in the realty purchased, and there is no júst reason why the vendee’s right to a lien is not just as strong as that of the vendor. The principle upon which such a lien is founded is the same in either case. Elterman v. Hyman, 192 N. Y. 113, 84 N. E. 937, 127 Am. St. Rep. 862, 15 Ann. Cas. 819.

[2] While it is averred by the complaint that each of the purchasers has been damaged, and each has rescinded his or her contract, the complainants nevertheless claim ’an equitable lien, and pray that it be foreclosed and the property sold to satisfy their respective demands. There is no effort to have the court rescind the contracts. If such a purpose were in the mind of the pleader, he would certainly have asked for it in his prayer. This he has not done. Looking through the entire complaint, I am impressed that its true purpose and intendment is to recover back the purchase money for a breach of the contract and to impress tire property with a lien for the amount of the recovery.

In this view the case of Davis v. Rosenzweig Realty Operating Co., 192 N. Y. 128, 84 N. E. 943, 20 L. R. A. (N. S.) 175, 127 Am. St. Rep. 890, is without application.

[3] But if the case at bar is one for rescinding the contract, the cause is equitable nevertheless, and plaintiffs would not be relegated to an action at law, although they might not be entitled to a lien for the money paid. See case last cited.

[4] The cause, however, must be dismissed for want of jurisdiction in a federal court to entertain it. The demand of ño single one of the complainants equals $3,000, and, as the ground for invoking federal cognizance is diversity of citizenship, the amount in controversy becomes jurisdictional. The contracts of purchase entered into by complainants with the Linnhaven Orchard Company are several and distinct, and wholly independent one from the other. That is to say, each purchaser has contracted for a distinct tract or parcel of land, in which no 'other purchaser has an interest, and the terms of his contract relate to himself wholly, and are not interdependent in any particular upon any conditions of the contract of purchase of any other purchaser, so that each contract may be wholly performed and wholly executed by the parties to it without in any way affecting any other contract or any conditions imposed upon any other purchaser. True it is that the orchard company is the common vendor, and has contracted to sell by a common sdierne or project, to dispose of a large body of land, and the form of contracts is similar, and we may say largely identical; but this does not detract from the complete severa-bilily and wholly independent character of the contracts. The land contracted to be sold comprises all the interest the purchaser obtained or was to obtain in the larger tract, and the sale of other tracts from the larger tract was in no way made dependent upon the interest acquired by the individual purchasers under their contracts. So that, from any viewpoint, the severability of the individual contracts one .from the other is complete and independent, not in the least nor in any way interdependent.

Nor does the fact that some of these tracts have been mortgaged by the company, and some more than once, and that lands of the orchard company not contracted to be sold have also been mortgaged, with the mortgages in some instances overlapping some of the tracts under contract for sale, change or modify the severable character of the contracts themselves. Nor do such facts afford ground for uniting the causes of action in the sense that the amounts involved may be aggregated for conferring jurisdiction on a federal court. It may be convenient to unite ail the causes of action for the purpose of marshaling the assets. But this does not signify, as each individual suing.singly and separately may bring in necessary and proper parties for properly and adequately marshaling all the assets essential to determining the rights and interests pertaining to their individual purchases and the priorities relating thereto, or they might intervene in suits instituted for the foreclosure of these mortgages, for the purpose of setting forth their interests and having appropriate assets marshaled accordingly. The general rule applicable is stated by Mr. Hughes (Hughes, Fed. Procedure, 233) thus :

“Where there is more than one plaintiff, if the interests of the plaintiffs are joint, and not several, the entire amount will be taken into consideration in determining the jurisdiction; but if their interests are several, and they have merely joined for convenience in bringing the suit, then the amounts due to the different plaintiffs cannot be joined for the purpose of conferring jurisdiction.”

It is so stated by Mr. Justice Bradley in Clay v. Field, 138 U. S. 464, 479, 11 Sup. Ct. 419, 425 [34 L. Ed. 1044]. After alluding to several cases from the Supreme Court, he says:

“The general principle observed in all is that if several persons be joined in a suit in equity or admiralty, and have a common and undivided interest, though separable as between themselves, the amount of their joint claim or liability will be the test of jurisdiction; but where their interests are distinct, and they are joined for the sake of convenience only, and because they form a class of parties whose rights or liabilities arose out of the same transaction, or have relation to a common fund or mass of property sought to be administered, such distinct demands or liabilities cannot bo aggregated together for the purpose of giving this court jurisdiction by appeal, but each must stand or fall by itself alone.”

This was a case where the question of jurisdiction arose on appeal, but the rule is the same where jurisdiction is sought in a federal court of original cognizance. Thus it was said in Walter v. Northeastern Railroad Co., 147 U. S. 370, 373, 13 Sup. Ct. 348, 349 [37 L. Ed. 206] :

“it is well settled in this court that when two or more plaintiffs, having several interests, unite for the convenience of litigation in a single suit, it can only be sustained in the court of original jurisdiction, or on appeal in this court, as to those whose claims exceed the jurisdictional amount; and that when two or more defendants are sued by the same plaintiff in one suit the test of jurisdiction is the joint or several character of the liability to the plaintiff.”

See, also, Wheless v. St. Louis et al., 180 U. S. 379, 21 Sup. Ct. 402, 45 L. Ed. 583.

The Walter Case was a suit by the railroad company to enjoin dis-* tinct assessments in several counties, and the Wheless Case a suit by lot owners to enjoin street assessments against distinct lots severally owned by the plaintiffs; and it was held in each instance that the several demands could not be aggregated for the purpose of giving the court jurisdiction. If such be the rule (and it is so adjudged) as it relates to a class “whose rights or liabilities arose out of the same transaction, or have relation to a common fund or mass of property sought to be administered,” how much more cogent would be its application where, as in the present case, the rights not only arose out of entirely separate and distinct transactions, but have no relation whatever to any common fund or mass of property to be administered.

The motion to dismiss must be allowed, and likewise the show cause order will be vacated.