STRANG v. RICHMOND, P. & C. R. CO. et al., 101 F. 511

SIMONTON, Circuit Judge (after stating the facts as above). Before entering upon the merits of this appeal, it may not be unprofitable to comment upon what seems a want of due form in the pleading in this case. To the original bill.the defendant railroad company filed a general demurrer, and on the same day, at the same time, filed an answer. The demurrer admitted all the facts well pleaded in the bill. The answer denied in toto and in detail every allegation of fact in the bill. This cannot be said to be in due form. Mr.

Justice Story in his Equity Pleading (section 454), says: “The want of due form constitutes a just objection to the proceedings in every court of justice, for to reject all form would be destructive of the law as a science, and would introduce great uncertainty and perplexity in the administration of justice. Every irregularity of this sort is fraught with inconvenience, and generally tends to delays and doubts. And it has been well remarked that infinite mischief has been produced by the facility of courts of justice in overlooking errors of form.

It encourages carelessness and places ignorance too much on a footing with knowledge amongst those who practice the drawing of pleadings.” To the amended bill there is also a general demurrer, and at the same time an answer. Besides the general denial in the answer, there is a saving of the objection also taken by demurrer. This reservation in the answer is proper. Fost. Fed. Prac. § 110. But it removes the necessity for, and may supersede, the demurrer. A defendant may demur, plead, and answer to the same bill (Eq.

Rule 82), but in such case he must demur to a part oí a bill, plead to another, and answer another. Each of these modes of defense must relate to a separate and distinct part of the bill. Story, Eq. 1*1. g 487. If there is a demurrer to a part of a bill or to the whole, and an answer to the same part of the bill or to the whole, the demurrer is overruled. Beach, Mod. Eq. Prac. § 241. It is true that equity rule Xo. 87 provides that no demurrer or plea shall be held bad and overruled upon argument because the answer may extend to some part of the same matter as may be covered by such demurrer or plea.

But this will not protect a demurrer which goes to the whole bill, and is accompanied by an answer covering all the allegations of the bill. Crescent City Live Stock Landing & Slaughter-House Co. v. Butchers’ Union Live Stock Landing & Slaughter-House Co. (C. C.) 12 Fed. 225. Judge Blatchford, in Adams v. Howard (C. C.) 9 Fed. 847, says that, when there is both a demurrer and an answer to the same bill, covering the same matter, the defendant can be put to his election which of the two modes of defense he will rely upon.

If he select the demurrer, and it be decided against him, he would probably lose the right to answer over, permitted in rule 34. Whatever doubt may exist in some cases, there can be no doubt in this case that when the demurrer admits all the facts, and the answer denies categorically all the facts pleaded, the best rule is that laid down in Daniell, Ch. Prac. (Perkins’ Ed.) p. 792, that the answer overrules the demurrer. Xor can this answer be treated as a motion to dismiss the bill for want of equity.

Such a motion, common as it is in states which have adopted Code pleading, and perhaps in other states, has no place in proper equity practice. Betts v. Lewis, 19 How. 72, 15 L. Ed. 576; La Vega v. Lapsley, 1 Woods, 429, Fed. Cas. No. 8,123. We will treat this case as if made on bill and answer. The answer insists on the objection that on plaintiff’s own showing this court has no jurisdiction of this case. The objection is well taken in an answer. Indeed, when this is brought to the attention of the court, it must itself suo motu examine and decide upon it. Act 1875 (18 Stat. 470); Williams v. Nottawa Tp., 104 U.

S. 209, 26 L. Ed. 719; Turner v. Trust Co., 106 U. S. 555, 1 Sup. Ct. 519, 27 L. Ed. 273; Farmington v. Pillsbury, 114 U. S. 144, 5 Sup. Ct. 807, 29 L. Ed. 114. The bill sets out an unexecuted contract alleged to have been made with the defendant railroad company, and its breach by the defendant in refusing to allow the plaintiff to proceed in its execution. The contract was secured by no lien; nor is there any trust involved. It is, therefore, a cause of action for unascertained damages to be sued at common law. The whole case depends on the existence, validity, effect, and breach of the contract.

Until these are established, there can be no recovery. The seventh amendment of the constitution of the United States preserves the right of trial by jury in suits at common law when the value in contro ver sv exceeds $20. And in Scott v. Neely, 140 U. S. 112, 11 Sup. Ct. 715, 35 L. Ed. 361, this has been held to prohibit federal courts from entertaining any such controversy in equity.

The proper remedy is the ascertainment of the existence, validity, and breach of the contract, and the amount of plaintiff’s damages, in a suit at law; and when this is don'e, and the claim established, resort might be had to the court of equity. “In all cases,” says the court, “when a court of equity interferes to aid a remedy át law, there must be-an acknowledged debt accompanied by a right to the. appropriation of the property of the debtor for its payment; or, to speak with greater accuracy, there must be, in addition to such established or acknowledged debt, an interest in the property, as a lien thereon created by a contract or by ¿orne distinct legal proceeding.” It is contended with great force that these bonds were specifically set apart under the contract for the payment of the work to be done by the plaintiff, and that hence the plaintiff has an equitable lien thereon.

For this is quoted Walker v. Brown, 165 U. S., at page 664, 17 Sup. Ct. 453, 41 L. Ed. 865. In that case one Brown had delivered to a member of the firm of Lloyd & Co. $15,000, in bonds, to be used as security by them in purchases. They did incur a debt with Walker & Co. Brown, by letter to Walker & Co., stated to them that any indebtedness by Lloyd & Co. to them should be paid before the return to him of the bonds, or the value thereof.' Here was a distinct appropriation of specified bonds for a specific purpose, accompanied by the delivery of the bonds thereupon. The supreme court held that theré was a lien.

But in the case at bar there is no such delivery or appropriation. On the contrary, the allegation is that upon completion of the work it is to be paid for in bonds, or in cash representing the proceeds of the bonds, not exceeding $1,800,000; the issue of bonds was $2,300,000; the bonds in the meantime remaining in the possession of and under the control of the railroad company,'and it having the option to pay in cash. Nor will the alleged insolvency of the defendant company aid the bill. In Hollins v. Iron Co., 150 U. S. 371, 14 Sup. Ct. 127, 37 L.

Ed. 1113, the bill alleged a simple contract debt, the insolvency of the company, and that all the company’s property was in the hands of a trustee under a deed charged to be fraudulent. The court says: “The plaintiffs were simple contract creditors of the company. Their claim had not been reduced to judgment, and they had no express lien by mortgage, trust deed, or otherwise.

It is the settled law of this court that such creditors cannot come into equity to obtain the seizure of the property of the debtor, and its application to the satisfaction of -their claims; and this notwithstanding a statute of the state may authorize such a proceeding in a court of the state. The line of dem'arkation between equitable and legal remedies in the federal courts cannot be obliterated. See, to the same effect, Cattle Co. v. Frank, 148 U. S. 603, 13 Sup. Ct. 691, 37 L. Ed. 577; Taylor v. Bowker, 111 U. S. 115, 4 Sup. Ct. 397, 28 L. Ed. 368. In Tube-Works Co. v. Ballou, 146 U. S. 517, 13 Sup.

Ct. 165, 36 L. Ed. 1070, the bill alleged a debt and that the corporation ■ had no assets or funds to pay the plaintiff, and asked the court for process against a delinquent stockholder. The court says: ‘The bill does not allege any judgment in New York, or any effort to obtain one; nor does it aver that it is impossible to obtain one. It merely alleges that the corporation has no funds or assets wherewith to pay the claim of plaintiff.

When it is sought by equitable process to reach equitable interests of a debtor, the bill, unless otherwise provided by statute, must set forth a judgment in the jurisdiction in which the suit in equity is brought, the issuing of an execution thereon, and its return unsatisfied, -or must make allegation showing that it is impossible to obtain such a judgment in any court within such jurisdiction.’ ” Apart from this, the hill alleges a contract between the complainant and the defendant company to construct, furnish, and build a complete roadbed between some point in Virginia and another in North Carolina, together with necessary depots, etc.; the work to be paid for in certain bonds or in cash representing the proceeds of said bonds.

It sets out certain terms in said contract, and alleges the breach of the contract. The bill prays, among other things, that the railroad company be required to fulfill its contract. Now, the contract on the part-of the plaintiff was to construct, furnish, and build a complete roadbed. That on the part of the defendant was to pay for such completed roadbed in bonds, or cash, the proceeds of bonds. The plaintiff was not entitled to anything unless the roadbed was completed. He charges-that he could not perform his contract unless the defendant fulfilled-its contract in affording him the facility of doing so.

The bill in pur-, pose and substance is for the specific performance of a contract to build the road. If the court could undertake to order the defendant on its part to fulfill all the parts of its contract, it must order the plaintiff on his part to fulfill his contract; that is, to build the road. A contract to be specifically performed must be mutual. , Fry, Spec. Perf. § 266. So the bill called upon the Court to compel one party to build the railroad, and the other party to pay for it. This the court cannot do. A contract to build a railroad will not be enforced in equity. Railway Co. v. Marshall, 136 U.

S. 407, 10 Sup. Ct. 846, 34 L. Ed. 385; Ross v. Railway Co., 4 Woolw. 26, Fed. Cas. No. 12,080. This case is strikingly like the case at bar. The decision is by Mr. Justice Miller. It is a collation and discussion of many cases on the subject. In many particulars it meets the argument of appellant in this case, and distinctly decides that a contract to build a railroad cannot be enforced in equity. An executory contract will not be specifically enforced unless the remedy is mutual, and the performance of a comparatively inconsiderable part of a contract does not take it out of the class of executory contracts.

Unless the court can decree specific performance of the whole of a contract, it will not interfere to enforce any part of it. 1 The counsel for the appellant, admittingthat the court cannot decree specific performance of a contract to build a railroad, seeks, however, an injunction against the railroad company from any use of its bonds.

That is to say, he asks the court to tie the hands of the railroad company and to impound all of its bonds, because he insists that they are applicable to a provision of a contract on his part, not yet performed,which he may not perform, and which this court cannot compel, him to perform. He thus seeks to use the process of the court to compel by indirection the specific performance of the contract, which he could not ask the court, to do directly. The language of the court of appeals of Maryland in Canton Co. v. Northern Cent.

Ry Co., 21 Md. 399, is not inapplicable to this case: “As the hill stands, we are clearly of the opinion that it does not show' such a contract as a court, of equity can enforce hy decree, and, failing in that, it follows that an injunction which was intended to aid the general relief sought hy the bill was improperly granted.” The bill cautiously refrains from stating whether the contract was verbal or written, and the parts of the same set forth are vague to a degree. The court bejow was imjjressed'with this.

The uncertainty of the termini of the road between Eidgeway, a point on the Ealeigh & Gaston Eailroad and Hermitage road, Virginia, on the line of the Eichmond, Fredericksburg & Potomac Eailroad, a distance of about 103 miles; the uncertainty of the route through Eichmond, Petersburg, and Manchester; the indefinite statement as to the depots and station houses; the character of the bridges; the time within which the work is to be completed; a total absence of any particulars as to the character of the work, the inspection of its progress, time and mode of payment, — all these are left in a condition of vagueness and uncertainty.

Were the court to undertake its supervision, all its resources and time would be exhausted thereby. In our opinion, the bill on its face fails to state a case for the intervention of a court of equity. The conclusion reached by the court below is approved, but it should have dismissed the bill without prejudice. The cause is remanded to the circuit court with instructions to modify its decree in this respect, and to enter a decree dismissing the bill without prejudice.