Citizens Savings Bank v. Sexton, 264 U.S. 310 (1924)

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Citizens Savings Bank & Trust Company v. Sexton

No. 261

Argued February 25, 1924
Decided March 17, 1924
264 U.S. 310

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE EASTERN DISTRICT OF WASHINGTON

Syllabus

1. Where the parties to a note and mortgage are citizens of the same state, jurisdiction to collect the note by foreclose of the mortgage and deficiency judgment does not exist in the district court through diversity of citizenship if one of the defendants is a citizen of that state and the plaintiff, although of another state, acquired the obligations by assignment from the original obligee. Jud.Code § 24. P. 312.

2. While this restriction does not apply to a plaintiff who, although nominally the assignee, was really the payee, the evidence in the present case fails to sustain the allegation that the payee named in the note acted as the maker’s broker in securing the loan from the plaintiff, and that the plaintiff was at all times the beneficial owner of the paper. P. 313.

3. The rule that the restriction of Jud.Code § 24 does not prevent a suit by the assignee on a new and subsequent agreement is inapplicable where the suit is for foreclosure of a mortgage and the relief sought by a deficiency judgment, against a purchaser of the property who assumed its payment, is merely ancillary and incidental to the primary purpose of the bill. Id.

Affirmed.

Appeal from a decree of the district court dismissing, for want of jurisdiction, a suit on a promissory note and mortgage.