« PreviousContinue »
granting of the injunctions herein, shall present the same to him on or before the 1st day of November, 1913, by filing with him the evidence of their claims, or such other proof as they possess."
Thereafter Gallup brought suit in a state court of Arkansas to recover from the Railway Company the difference between the aggregate freight and passenger rates actually collected from him while the injunctions, temporary and permanent, were in force (that is, from September 3, 1908, to July 18, 1913), and the amount which would have been collected if the rates enjoined had been in effect. The Railway Company promptly filed, in the District Court, on leave granted what is called a "supplemental bill of complaint" to restrain Gallup from proceeding in the state court. Metcalf, another shipper, who had not brought suit, but who, it was alleged, was threatening to do so, was also made defendant as representative of the class; and claiming that the facts justified equitable interference on the ground of avoiding multiplicity of suits, an injunction was sought also against him and others similarly situated. The supplemental bill specifically alleged that by virtue of the decree of May 11, 1911, the Railway Company was released from all liability on the bonds or otherwise from any damage accruing from the injunctions.
Gallup and Metcalf each moved to dismiss the bill for want of equity. Gallup also answered, alleging, among other things, that the overcharges sought to be recovered were mainly those arising after the entry of the final decree in the District Court, and also that the aggregate of claims filed with the special master under the decree of July 18, 1913, greatly exceeded $1,000,000, the amount of the bonds. The District Court granted the prayer of the supplemental bill. Upon appeal by Gallup and Metcalf the Circuit Court of Appeals modified the decree "so as to restrain only such actions as are brought on one or
both of the bonds." From the decree as so modified, the Railway Company appealed to this court.
The Railway Company rests its claim to relief upon two grounds:
First: That the District Court assumed by the decree of July 18, 1913, jurisdiction to determine all claims arising out of overcharges, so that the commencement by Gallup of suit in the state court was an interference with its jurisdiction.
Second: That in view of the number and character of the claims of other shippers and travellers, equity should intervene to prevent multiplicity of suits.
It may be doubted whether, in view of the mandate, there was any power in the District Court to order reference to the master to determine the liability on the bonds; but on this question we are not required to express an opinion. For it is clear that even if such power existed it could extend only to such shippers and travellers as elected to file their claims with the master. The order referring the determination of claims for damages to a special master was declared to be "under Rule 15." 2
1 In In re Louisville, 231 U. S. 639, 645, and Louisville v. Cumberland Telephone & Telegraph Co., 231 U. S. 652, where it was held that the District Court had discretion to authorize further proceedings, the mandate ordered that the decree be "reversed with costs, without prejudice," and remanded "for further proceedings not inconsistent with the opinion of this court"; while in the instant case the mandate ordered that the decree be" reversed with costs" and remanded "with directions to dismiss the bill." See also St. Louis & San Francisco Railroad v. Barker, 210 Fed. Rep. 902; Ex parte Dubuque & Pacific Railroad, 1 Wall. 69; Durant v. Essex Co., 101 U. S. 555; Mackall v. Richards, 116 U. S. 45, 47; In re Washington & Georgetown R. Co., 140 U. S. 91, 97; In re Potts, 166 U. S. 263; Evens & Howard Fire Brick Co. v. United States, 236 U. S. 210.
2 Rule 15 is as follows: "In all cases in which an injunction has been granted, and a bond executed by the complainants, damages sustained by the party enjoined, in case the injunction is dissolved, may be assessed in the same proceeding, either by the court or by reference to a master,
That rule relates to damages recoverable on bonds given when a restraining order or temporary injunction is issued. Damages arising between May 11, 1911 (the date of the decree granting the permanent injunction) and July 18, 1913 (the date of the decree on mandate dismissing the bill) were not recoverable on the injunction bond. Houghton v. Meyer, 208 U. S. 149. If the remedy of shippers and carrier were limited to proceedings on the bond they would be denied all recovery for overcharges after May 11, 1911. Furthermore the decree of May 11, 1911, expressly released the Railway Company and sureties from further liability on the bonds. In so far as the order referred to the master "under Rule 15" the determination also of damages "alleged to have been sustained by reason of the granting" of the permanent injunction, it was clearly erroneous and affords no justification for enjoining suit in a state court to recover for overcharges made after the final decree. It is, indeed, contended by the Railway Company, that the effect of the decree entered by the District Court is to deprive shippers and travellers of all remedy under the bond.1 But Gallup makes no claim
and judgment entered in the same action against the sureties on the bond; provided, however, that unless the damages are thus assessed in the cause, or a judgment entered that the party enjoined is entitled to no damages by reason of the improper granting of the injunction, he may proceed on the bond in an action at law without any further order or leave of the court."
The allegations of the supplemental bill are: "Complainant alleges that [by?] the final decree entered in the aforesaid cause on the 11th day of May, 1911, hereinbefore referred to, it was ordered that the bond for injunction filed by the complainant be released and the sureties thereon discharged from further liability, and it is advised and avers that the effect of said order was to relieve complainant of all liability under said bond and preclude any recovery of damages on said bond or by reason of or growing out of the injunctions ordered in the aforesaid cause.
"Complainant avers that upon the rendition of the final decree in said cause perpetuating and making the temporary injunction theretofore granted permanent said bonds ceased, by operation of law, to
under the bond. He sues on causes of action to recover overcharges arising under the Arkansas statutes. His right to sue, suspended by the injunctions improvidently granted, revived as soon as the permanent injunction was dissolved by the decree dismissing the bill. Although the injunctions enjoined all shippers and travellers, and therefore him, from instituting suits on account of alleged overcharges, Gallup did not in fact become a party to the suit in the District Court; and he could not, after the mandate directed dismissal of the bill, be compelled to submit to that court the adjudication of his claim.
The contention of the Railway Company that the "supplemental bill" should be sustained to prevent multiplicity of suits is also unfounded. Unless it is maintainable as an ancillary bill, the federal court was without jurisdiction as there was no diversity of citizenship. But it was not ancillary to any relief properly within the scope of the decree dismissing the original bill. As an independent bill it is also without equity. The only common issue between the Railway Company and the several shippers and travellers, (namely, whether the rates promulgated by the Railroad Commission were confiscatory), had been settled by the decision of this court. In no other respect have shippers and travellers a common interest. The claims of each present a separate controversy unconnected with that of any of the others. This is obviously true as to all issues of fact which will arise in considering their several claims. And the bill contains no allegation or even suggestion that a controverted question of law, common to all the claims, is involved, which will determine their right to recover or even that there is involved a question of law not fundamental in which they have a
have any effect, and complainant is not liable for any damage that may have accrued to any passenger or shipper on its line of railroad after the rendition of the final decree perpetuating and making the temporary injunction permanent."
common interest. It might be a convenience to the Railway Company to have these numerous claims of shippers determined by the master in the District Court; but such a course would certainly involve great inconvenience to many of the shippers. The bill cannot be maintained as one to prevent multiplicity of suits.
ILLINOIS SURETY COMPANY v. THE JOHN DAVIS COMPANY ET AL.
ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE
No. 235. Argued April 27, 1917.-Decided June 4, 1917.
The purpose of the Act of February 24, 1905, 33 Stat. 811, is to provide security for the claims of all persons who furnish labor or material on public works of the United States; the act, and bonds given under it, are to be construed liberally to effectuate this purpose; and the release of sureties through mere technicalities is not to be encouraged.
S, while conducting his business under supervision of a creditors' committee, entered into a contract with the United States for the doing of certain work, and gave bond with surety to secure claims for labor and materials under the Act of February 24, 1905, supra. After part performance of the contract, he and the creditors formed a corporation to take over his affairs, which, without the consent of the United States or the surety, received a transfer of all his business and assets, and thereafter under the management of S, as president, and the control of the creditors through the board of directors, continued for a time to perform the contract. Held: (1) That in view of § 3737, Rev. Stats., the transfer could not effect an assignment of the contract but amounted at most to a subletting.
(2) That as the responsibility of the contractor under the contract
and the actual management of the business were not changed, nor