For over ten years from January 21, 1891, the date of the filing of the original bill, litigation was carried on in the circuit court of the United States for the northern district of Georgia, and in appellate courts, in the foreclosure of a trust deed executed by the Alabama & Georgia Manufacturing Company. In the course of that litigation decrees were entered and reversed, sales were made and set aside, possession of property was transferred and retransferred, accountings had as to the proceeds of property in possession, and when it seemed that at last litigation was at an end, the foreclosure consummated, and the title established in the purchaser, we are told that it all amounted to nothing; that parties, lawyers, and courts have been spending their time and labor in simply beating the air, the title to the property conveyed by the trust deed being exactly where it was before the litigation commenced, and the party which had acquired possession by that litigation subject to an obligation to account as a mortgagee in possession.
Upon what is this contention based? The respondents say that the property conveyed by the trust deed was all in Alabama, although the deed recites that part of it was in Georgia; that it originally belonged to the Alabama company; that that company executed the trust deed, although the resolution incorporated in the trust deed purports to have been passed at a meeting of the directors, held at the office of the company in West Point, Georgia; that the Alabama company was not made a party to the foreclosure proceedings, and could not have been, because the plaintiff was a citizen of Alabama, and making the Alabama company a defendant would have ousted the court of jurisdiction; that the subsequent owner of the property, another Alabama company, was also not made a party to those proceedings, and that therefore they were res inter alios acta, and in no way binding upon either Alabama company. It is also insisted by the respondents that the socalled ancillary bill filed by the petitioner was not, in any sense of the term, an ancillary, but in fact an original bill, and that under Rev. Stat. § 720, U.S.C.omp. Stat. 1901, p. 581, the Federal court had no power to restrain the further proceedings in the state chancery court.
Prima facie, the United States circuit court had jurisdiction of the foreclosure bill. Diverse citizenship was alleged and admitted, and the relief sought was the foreclosure of a trust deed covering property partially in Georgia and partially in Alabama. The bill in the state court challenged the decree in the United States circuit court, denied its efficacy to transfer title, on the ground that the Alabama & Georgia Manufacturing Company (the grantor in the trust deed, and the original owner of the property) and the Huguley Manufacturing Company (a purchaser and subsequent owner) were both corporations of Alabama, and citizens of the same state with the plaintiff, whereby a case was presented of which the Federal courts could not take jurisdiction. The specific allegations were these:
'That a corporation known as the 'Alabama & Georgia Manufacturing Company,' alleged to be a corporation organized under the laws of Georgia only, and said Huguley Manufacturing Company, together with the said W. T. Huguley, were the sole defendants to said bill, said W. T. Huguley being made defendant as cotrustee, alleged to be interested adversely. The Alabama & Georgia Manufacturing Company, originally chartered and organized as a corporation under said act of the general assembly of the state of Alabama, never has been made a defendant thereto, and never appeared as a party to said cause, the president of said corporation, to wit, W. H. Huguley, himself likewise a citizen and resident of the county of Chambers, state of Alabama, never having been served with notice either of said alleged default of interest, as expressly required under the terms of the trust deed, or notice of said suit of foreclosure against said Alabama & Georgia Manufacturing Company. No attempt was made, by either direct or ancillary proceedings, to subject the property lying in the state of Alabama to this suit. A portion of the property was erroneously described in the said mortgage as lying within the county of Harris, in the state of Georgia, while the orators aver that all of said property was and is situated within the county of Chambers, in the state of Alabama.
'The property was not advertised in the state of Alabama, nor was any sale or pretense of sale conducted in said state.'