The opinion of the court was delivered by: Juergens, District Judge.
Plaintiffs filed suit demanding proceeds from the sale of
oil produced from lands to which they claim oil and gas
rights. The original defendant filed an interpleader action
because of disputed claims to the proceeds between the
plaintiffs and other parties.
The original defendant has tendered $100,156.04 to the Clerk
of this Court, alleging possession but not legal ownership
thereof, and asks the Court to determine the party or parties
The interpleader action prays the determination of ownership
not only as to the funds paid into court but also ownership to
proceeds from the sale of oil and gas to be produced from the
disputed lands in the future.
Counterclaimants have been brought into the action and have
filed claims to the funds presently in the court and funds
which may accrue in the future.
The interpleaded funds are proceeds of oil produced and
marketed by plaintiffs from land lying outside the Eastern
District of Illinois in Bond County, Illinois.
On the eve of trial the counterdefendants, Walter E. Kline,
Stella P. Kline, R.E. Hayes, W.T. Frederking, and A.P.
Wagemann, filed their motion to dismiss for the following
1. That the Court lacks jurisdiction of the
persons and subject matter in this action because
the principal question involved is a local action
to try title of land lying outside the
territorial limits and jurisdiction of this
2. That there is not proper diversity of
citizenship between the parties.
3. That there is an action awaiting trial in
the Circuit Court of Bond County, Illinois, which
involves substantially identical issues as this
An examination of the pleadings discloses that the action
awaiting trial in Bond County, Illinois, does not involve the
title to the land here in dispute nor the parties in this
action. Accordingly, the reason for dismissal set forth in
number 3 above is without merit.
The brief of counterdefendants, Walter E. Kline, Stella P.
Kline, R.E. Hayes, W.T. Frederking, and A.P. Wagemann, asserts
that this Court does in fact have jurisdiction over the
interpleader action, thereby apparently waiving the grounds in
support of their dismissal as set forth in paragraph numbered
2 above. Notwithstanding this apparent waiver, the Court finds
that diversity of citizenship exists.
Whatever may be the extent of the jurisdiction of the lower
federal courts over the subject matter of a suit with respect
to persons and property, it is, in the absence of express
authority by act of congress, confined to the territorial
limits of the district within which the court sits.
Accordingly, although a lower federal court may in the
exercise of its equity powers, and acting in personam, control
the acts of persons over whom it has acquired jurisdiction,
outside of its territorial jurisdiction, as for instance by
compelling a conveyance of lands in another state by a decree
in personam against the party who holds the title, it has no
jurisdiction to transfer the title to such lands by a sale and
conveyance made through its master or commissioner. 35 C.J.S.
Federal Courts § 16, p. 811.
Here there can be no question as to the federal court's
jurisdiction in the interpleader action or as to this Court's
actual possession of the property with respect to which it is
called upon to adjudicate title, namely, the proceeds of the
royalty payments deposited in the registry. The Court's
jurisdiction is not affected by the circumstance that the
funds in the registry possess the legal character of proceeds
derived from the sale of interests in realty or by the fact
that title to ...