tional question is not waived by taking an appeal also to the circuit court of appeals.

[Nos. 141, 496.]


2 A complainant in an equity suit may gener Argued March 24, 25, 1898.
ally dismiss his bill at any time before the
hearing; but leave to dismiss a bill is not
granted where, beyond the annoyance of a
second litigation upon the subject-matter,
such action would be manifestly prejudicial
to the defendant.

3. Legal prejudice to defendant to authorize a
denial of a motion by plaintiff to discontinue
must be other than the mere prospect of
future litigation.

4. The decision of a motion for leave to discontinue will not be reviewed in this court except for abuse of the discretion of the court, or an obvious violation of a fundamental rule of a court of equity.

5. Leave to discontinue a suit in equity to restrain bringing suits for rent, alleging an election to terminate the lease by virtue of its provisions and that the lease was ultra vires, and offering to do what is equitable and right for the property demised, and asking the court to decree the compensation or relief to be made, is properly denied after the lease has been held void in another case, and after an injunction has been granted against recovering rent and testimony has been taken on the issues involved in the suit, when defend

ant opposes such discontinuance and asks leave to file a cross bill to avail itself of the tenders made in the original bill. 6. A cross bill for affirmative relief is properly allowed to be filed by defendant for the return of property delivered under an illegal lease and to determine the liability of the complainant, where he has alleged an election to terminate the lease, and also alleged its in

validity and offered to do what the court

should decree to be just.

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Decided May 31,

APPEAL from a judgment of the Circuit Court of the United States for the Eastern District of Pennsylvania and also on certiorari to the United States Circuit Court of Appeals for the Third Circuit to review a judg ment of the Circuit Court in favor of the Central Transportation Company against the Pullman's Palace Car Company, for the sum of $4,235,044, for the value of certain property which was leased by the Central Transportation Company to the Palace Car Company by an ultra vires lease, and which was to be returned or paid for by the latter company. Reversed, and case remitted to the United States Circuit Court for the Eastern District of Pennsylvania with directions to enter a judgment for the Central Transportation Company in accordance with the opinion.

See same case, 139 U. S. 24 [35: 55], also same case below, 39 U. S. App. 307, 76 Fed. Rep. 401, 22 C. C. A. 246.

Statement by Mr. Justice Peckham:

The record in this case shows that in 1870 the Central Transportation Company, hereafter called the Central Company, was a corporation which had been in 1862 incorporated under the general manufacturing laws of the state of Pennsylvania. It was engaged in the business of operating railway sleeping cars and of hiring them to railroad companies under written contracts by which the cars were to be used by the railroad companies for the purpose of furnishing sleeping conveniences to travelers. The corporation at 8. The right to recover property delivered un- this time had contracts with a number of difder an illegal contract rests upon a disaffirm- ferent railroad companies in the east, princiance of the contract, and is permitted only to pally, but not exclusively, with what is do justice to the party who has thus deliv-known as the Pennsylvania Railroad system,

7. The right to a recovery of property transferred under an illegal contract is founded upon the implied promise to return or make compensation for it.

ered it.

9. The market value of the stock of a corporation is not a proper measure of the value of its property transferred by an ultra vires lease, and which must be returned or paid


and it had been engaged in its business with those companies for some time prior to 1870. In the year last named the Pullman's Palace Car Company, hereafter called the Pullman Company, was a corporation which had been 10. The value of contracts with third parties, incorporated under the laws of the state of or of patents owned by a company when it Illinois. It was doing the same general kind transfers its property under an ultra vires of business in the west that the Central Comlease, and which have expired when the obli-pany was doing in the east. For reasons not gation to restore the property or make com- material to detail, the two companies entered pensation therefor is enforced, cannot be con- into an agreement of lease, which was exesidered in determining the value of such prop-cuted February 17, 1870.

ents and contracts for the time they were

erty, when payment for the use of such pat By its terms the Central Company leased used was included in the rent paid, and they to the Pullman Company its entire plant and had become valueless at the time of their personal property, together with its contracts expiration.

11. The earnings of property transferred under an ultra vires lease cannot be included in the compensation to be paid the lessor in lieu of the property on disaffirmance of the contract. 12. The loss sustained by the lessor in an ultra vires lease on account of the breaking up of its business and the loss of contracts with

which it had with railroad companies for the use of its sleeping cars on their roads, and also the patents belonging to it. The lease was to run for ninety-nine years, which was the duration of the charter of the Central Company.

It was also agreed that the Central Comthird persons when the lease is repudiated pany would not engage in the business of manufacturing, using, or hiring sleeping cars cannot be recovered as part of its relief, ou recovering compensation for the property while the contract remained in force.

transferred and not restored.

In consideration of these various obliga

Пons, the Pullman Company agreed to pay | property, contracts, and rights of the said deannually the sum of $264,000 during the en- fendant, the Central Transportation Comtire term of ninety-nine years, in quarterly pany, and including a covenant on the part payments, the first quarter's payment to be of said defendant corporation not to transact made on the 1st of April, 1870. during the existence of said lease any of the [140] *From the time of the execution of the con- business for the transaction of which it was tract its terms were carried out, and no par-incorporated, was never legally valid beticular trouble occurred between the compa- tween the parties thereto, but was void for nies for about fifteen years. During this time the want of authority and corporate power and up to the 27th day of January, 1885, the on the part of the defendant to make the Pullman Company paid to the Central Com- said contract of lease, and because the same pany, as rent under the contract, the sum of was in violation of the charter conferring the $3,960,000, without any computation of in-corporate powers of said defendant, and of terest. About or just prior to January, 1885, the purpose of its incorporation, as by the said differences arose between the companies. charter, to which, for greater certainty, refThe Pullman Company claimed the right to erence is made, your orator is advised it will terminate the contract under the eighth appear; that the said contract of lease was clause thereof, or else to pay a much smaller never susceptible of being enforced in law by rent. The merits of the controversy are not your orator against said defendant, and canmaterial. not therefore be construed and held to conThe two companies not agreeing, and the tinue in force and obligatory upon your oraPullman Company refusing to pay the rent tor; and that your orator can be under no stipulated for in the lease, the Central Com- other legal obligation or equitable duty to pany brought successive actions to recover the defendant than to return such of the the instalments of rent accruing. In one of property assumed to be demised as is capathem the Pullman Company pleaded the ille-ble of being returned, and to make just comgality of the lease, as being ultra vires, the persation for such other of the said property charter of une Central Company. The plea as under the said contract of lease it ought prevailed in the trial court, and upon writ of to make compensation for, which it is will error the judgment upholding this defense ing and now offers to do." was, in March, 1891, sustained in this court. Central Transportation Company v. Pullman's Palace Car Company, 139 U. S. 24 [35: | 55].

In the prayer for reliet it was also asked"That the court may consider and decree whether said contract of lease was not made without authority of law on the part of the After the bringing of several actions for in- defendant and in excess of its corporate stalments of rents by the Central Company powers and in violation of its corporate duand before the question of ultra vires had ties, so as not to be enforceable against your been argued in this court, the Pullman Com-orator beyond the obligation of your orator pany on the 25th day of January, 1887, commenced this suit by the filing of its bill against the Central Company in the circuit court of the United States for the eastern district of Pennsylvania. The bill asked for an injunction to restrain the bringing of more suits for rent. It gave a general history of the transactions between the companies from the execution of the contract between them in February, 1870, down to the time of the filing of the bill, and it alleged the election of the Pullman Company to terminate the lease under the provisions of the eighth clause thereof, and the willingness of the company to pay what should be found by the court to be equitable and right to the Central Company on account of the property which had been transferred by that company to it, and to this end it prayed the aid of the court. The bill also contained the following allegation:

to make return of or just compensation for
the property *demised; and that an account{}}
may be taken between your crator and de
fendant, and that the amount may be ascer
tained that should be paid by your orator to
the defendant on any account whatever:

. and that an accounting may be had be tween your orator and defendant as to all the matters and things set out in this bill."

The Central Company answered the bill, denying many of the material allegations therein contained. It denied that the Pullman Company had ever elected to terminate the lease under the provisions of the eighth clause thereof, and it alleged that the lease was still in existence, and that it had the right to recover from the Pullman Company the amount of the rent named in the lease, and that no valid agreement had ever been made between the companies in any way altering the lease or reducing the amount of [141] *And your orator shows that in said lease the rent payable thereunder. It denied that it is recited that the said contract of lease is the lease was illegal, and it alleged that even made on the part of the defendant, the said if it were, the illegality did not justify the Central Transportation Company, under an complainant in applying for any equitable act of the general assembly of the common-relief whatever. Upon application on the wealth of Pennsylvania therein named, ap- part of the Pullman Company the court proved the 9th day of February, A. D. 1870, granted an injunction restraining the bringa copy whereof is hereto attached, marked ing of suits for the collection of rent acExhibit G, and referred to as part of this bill; cruing after July, 1886. but it declined to enbut your orator is advised, and therefore subjoin those already pending for rent accruing mits it to the court, that the said lease being before that date.

a grant, assignment, and transfer of all the After considerable proof had been taken

upon the issues involved in this suit and af- foundation of any action* or application for[144] ter the decision of the other case in this any relief whatever between the parties court, in March, 1891, holding the lease ille- thereto. And this respondent submits that gal and void, the complainant herein, on the the rule which precludes the granting of re25th of April, 1891, applied to the court for lief by any court of either equity or law, leave to dismiss its bill at its own cost. This upon a contract void for contravention of application was opposed by the defendant, public policy, forbade this circuit court to alwho, on the same day, moved for leave to file low such affirmative relief upon this cross a cross bill, in which it said it would avail bill which asserts no claim of right not itself of the tenders of relief made by the founded directly upon the express undertakcomplainant in its bill, and that it would ings of this contract of lease, held void by pray such relief in its cross bill as might be this court itself and by the supreme court pertinent to the case made by the bill. In for the reasons aforesaid." The Pullman December, 1891, complainant's motion for Company therefore denied that it owed any leave to dismiss ite bill was denied, and the duty to the cross complainant which was endefendant's motion for leave to file a cross forceable at law or equity to return to the bill was granted. Thereupon the cross bill Central Company the property assigned unwas filed, in which the Central Company ac-der the lease or to account for any profits deknowledging, under the decision of this rived under and by reason of any property court, that the lease in question was void, delivered to it under the agreement. 143]*claimed to avail itself of the tenders made in complainant's bill upon the subject of the re-ings, and the case came before the circuit turn of its property and compensation for that which it was impossible to return, and claimed, among other things, that the Pullman Company should account for all the profits which it had derived since the making of the lease by the use of the property transferred to it under the agreement, and that the amount found due should be paid to the Central Company, and that the Pullman Company should be adjudged to be a trustee for the Central Company of all the contracts for transportation, whether original, new or renewals, held by the Pullman Company with railroad companies with which there were contracts of transportation with the Central Company at the time of the making of the lease in February, 1870, and that the Pullman Company should be adjudged to pay the Central Company all such sums as should be due to it by the Pullman Company as such trustee, and that defendant should in the future from time to time account for the sums which should be due by reason of future operations under those contracts. It also prayed for a discovery and an accounting by the Pullman Company of its use and disposition of the property turned over to it by the Central Company.

To this cross bill the Pullman Company filled three demurrers, the first being a general demurrer on the ground that the cross bill was filed contrary to the practice of the court, and also that it appeared that the court had no jurisdiction of the case; the second demurrer related to the portions of the cross bill praying that the cross defendant might be regarded as a trustee and decreed to account accordingly; the third demurrer related to that part of the cross bill which asked for an account of profits since the making of the lease and for future profits. The demurrers were overruled with leave to present the questions on final hearing, and the Pullman Company then answered the eros bill. Among other things it set up that the agreement in question was void, "and that being null and void between the parties hereto because of such character of the agreement, it cannot be made the lawful

Testimony was taken under these plead-
court for final hearing, and that court held
that the cross complainant made out a case
for an accounting by the cross defendant for
the value of the property when received, to-
gether with its earnings since, less the
amount paid as rent. The court therefore
referred it to a master for the purpose of as-
certaining the facts, with directions to report
within the time named in the order of refer-
ence. Under this order testimony was taken
and the master reported in favor of the Cen-
tral Company, and the exceptions filed hav-
ing been overruled, judgment was entered in
favor of the Central Company for the sum of
$4,235,044, together with costs. From this
judgment the Pullman Company appealed
directly to this court. It also appealed to
the circuit court of appeals. The case was
there argued upon a motion to dismiss the
appeal, and the motion denied, and the fur-
ther argument was postponed until some dis-
position was made of the appeal taken di-
rectly to this court. 39 U. S. App. 307. A
motion has also been made to this court to
dismiss the appeal, and thereupon an applica-
tion was made to us for a writ of certiorari
to the circuit court of appeals for the third
circuit, and on account of the peculiar cir-
cumstances it was granted, and the record
has been returned to this court by virtue of
that writ.

Messrs. Edward S. Isham, Joseph H.
Choate, A. H. Wintersteen, and Robert T.
Lincoln for appellant.

Messrs. Frank P. Prichard and John
G. Johnson for appellee.

Mr. Justice Peckham delivered the opinion of the court:

The motion to dismiss the appeal in this case is now before the court.

Counsel for the Pullman Company took the appeal directly from the circuit court to this court on the theory that the case involved the construction or application of the Constitution of the United States, because of the holding of the court below that the cause of action alleged by the Central

Company in its cross bill was under the cir- | the impossibility of returning a large portion cumstances a proper subject of equitable cog- of the property which it had received; it annizance, and counsel claimed it was really nounced its willingness to make substantial nothing but a legal cause of action in regard performance of its contract contained in the to which the cross defendant was entitled to lease, and it asked the court to aid it therein a trial by jury under the Constitution of the by decreeing exactly what it should do for United States. There being room for doubt the purpose of carrying out equitably and in regard to the soundness of such conten- fairly its obligations incident to its termination, the counsel also took an appeal to the tion of the lease under the clause above mencircuit court of appeals, and we think that tioned. The other theory rested upon what by this action he did not waive any right of was a substantial allegation of the invalidity! 14 appeal which he would otherwise have had. of the lease as having been made without auWhichever route may be the correct one, thority of law, and therefore in violation of either directly from the circuit court or the corporate duties of the Central Company, through the circuit court of appeals, it is un- and on that account not enforceable against necessary to decide, because the case is now the Pullman Company beyond the obligation properly before us either by appeal or by the of the latter company to make return of just writ of certiorari; and we therefore proceed compensation for the property demised. Upto determine it upon the merits. on that theory the bill asked, not that the court should set aside or cancel the lease, but that it should aid the parties by decreeing just what relief should be given by the com

duty to make some compensation for the property it received and which it stated its willingness to make, and to that end, that an accounting might be had and the amount ascertained that should be paid to the Central Company in discharge of the obligations of the complainant in that behalf. Thus the Pullman Company came into a court of equity and in substance alleged that the lease had been terminated by it under the eighth clause, and it also alleged that the lease was void as ultra vires, and in either event it tendered such relief as the court might think was proper and fair under the circumstances.

The Pullman Company, complainant in the original suit, insists that it had the right to discontinue that suit at its own cost before any decree was obtained therein, and the re-plainant to the lessor in the execution of its fusal of the court below to grant an order of discontinuance upon its application is the first ground of objection to the decree herein. The general proposition is true that a com[146]plainant in an equity *suit may dismiss his bill at any time before the hearing, but to this general proposition there are some well recognized exceptions. Leave to dismiss a bill is not granted where, beyond the incidental annoyance of a second litigation upon the subject-matter, such action would be manifestly prejudicial to the defendant. The subject is treated of in City of Detroit v. Detroit City Railway Company, in an opinion by the circuit judge, and reported in 55 Fed. Rep. 569, where many of the authorities are collected, and the rule is stated substantially as above. The rule is also referred to in Chicago & Alton Railroad Company v. Union Rolling Mill Company, 109 U. S. 702 [27: 1081].

From these cases we gather that there must be some plain, legal prejudice to defendant to authorize a denial of the motion to discontinue; such prejudice must be other than the mere prospect of future litigation rendered possible by the discontinuance. If the defendants have acquired some rights which might be lost or rendered less efficient by the discontinuance, then the court, in the exercise of a sound discretion, may deny the application. Stevens v. The Railroads, 4 Fed. Rep. 97, 105. Unless there is an obvious violation of a fundamental rule of a court of equity or an abuse of the discretion of the court, the decision of a motion for leave to discontinue will not be reviewed here.

A large amount of proof had been taken under the issues made in this original bill and the answer thereto, and before the case was concluded the decision of this court was made in which the lease was declared to be void. The only obligation left under the original bill of complainant after the decision of this court was the obligation to return such portion of the property received by it as the court should determine to be right, or to make some compensation to the Central Company for the same. And this obligation it had offered in the original bill to carry out.

The Pullman Company had also obtained an injunction in the original suit, restraining the Central Company from commencing further legal proceedings to recover rent under the lease, and after obtaining this injunction and taking the testimony relating to the subject-matter of the original bill, the complainant should not be permitted under these circumstances to dismiss that bill and thus withUpon an examination of the facts relat-draw the whole case from the jurisdiction of ing to the motion, we think the circuit court the court, and thereby blot out its *tenders of[148] was right, in the exercise of its discretion, in relief contained in its original bill grounded, denying the same. The original bill was among others, upon the allegation that the framed really on two theories: One, that lease was void, and asking the aid of the by reason of an election made under the court to decree the precise terms upon which eighth clause in the lease, the Pullman Com-its obligations to the Central Company might pany had terminated the lease, and it was be fulfilled.

therefore bound under its provisions to re- The denial of the motion was made in conturn the property which it had received from | nection with the application of the Central the Central Company. It stated in its bill Company to file a cross bill in which it would

facts appearing in the record and the grounds on which that court proceeded as disclosed by its opinion.

Counsel asserts that the rights clairned under the Constitution of the United States were the right to due process of law. and the right to the equal protection of the laws.

The right to the equal protection of the laws was certainly not denied, for it is apparent that the same law or course of procedure which was applied to Tinsley would have been applied to any other person in the state of Texas, under similar circumstances and conditions; and there is nothing in the record on which to base an inference to the contrary.

Was the right to due process of law denied? If the committing court had jurisdiction of the subject-matter and of the person. and power to make the order for disobedience to which the judgment in contempt was rendered, and to render that judgment, then the court of criminal appeals could not do other wise than discharge the writ of habeas corpus and remand the petitioner. The writ cannot be availed of as a writ of error or an appeal, and if the commitment was not void petitioner was not deprived of his liberty without due process of law.

The district court of Harris county, Texas, was a court of general jurisdiction, and had jurisdiction in the suit against the Cemetery Company and its officers, including Tinsley, who was not a stranger, but a party, to the litigation, after hearing had on due notice and appearance by the defendants, to enter the order appointing a receiver and airecting the company's officers to deliver to him, on his demand therefor, the company's property in their custody, including the books, notes, and moneys on hand, and to determine on the facts that Tinsley was in contempt in refusing to deliver such property, and assuredly to adjudge this as to so much of the property as he conceded belonged to the company, but

doubtedly competent for the district court to compel the surrender of the minute book and notes in Tinsley's possession, and that he could not be discharged on habeas corpus until he had performed or offered to perform so much of the order as it was within the power of the district court to impose, even though it may have been in some part invalid. Re Swan, 150 U. S. 637 [37: 1207].

The other objections suggested require no special consideration. It is said that the imprisonment for contempt was limited by the state statute to three days (art. 1101, Tex. Rev. Stat.), but the state court held that that statute had reference to a quasicriminal contempt as a punishment, and not to a civil contempt, where the authority of the court is exercised by way of compelling obedience. Rapalje, Contempt, 21. This is not a Federal question, and we accept the ruling of the state court in its construction of the statute. It is urged that the order of commitment imposed an uncertain and indefinite term of imprisonment; but the order was that Tinsley should be confined until he complied, and the addition, "or *until he shall be discharged by the further order of the court," was merely intended to retain the power to discharge him if the court should thereafter conclude to do so, it being within his own power to obtain his discharge at any time by obeying the order. Nor is there any force in the objection that no trial by jury was awarded, for such trial was not demanded, and a jury trial is not necessary to due process of law on an inquiry for contempt. Walker v. Sauvinet, 92 Ú. S. 90 [23: 678]; Eilenbecker v. Plymouth County District Court, 134 U. S. 31 [33: 801]; Rapalje, Contempt, § 112.

The judgments of the Circuit Court and of the Court of Criminal Appeals are severally affirmed.

[107]the possession of which *he claimed the right CENTRAL NATIONAL BANK OF BOSto retain only in order to enforce an alleged lien.

TON et al. v.


(See 8. C. Reporter's ed. 108, 109.)

Motion to amend mandate.

Where the motion to amend the mandate of this court proceeds on a misconception of the meaning of the judgment and mandate, the motion will be denied.

[No. 38.]

The court of criminal appeals held that, as Tinsley did not claim the legal title in the notes and in the minute book, but merely an equity or lien thereon to secure his debt; as the order to turn over the property to the receiver was by no means an adjudication as to his lien,which if it was a genuine lien would be preserved to him in the hands of the receiver; and as the effect of the order was merely to place the articles in the hands of the receiver for administration under the orders of the court,-the district court unquestionably had the power to make the order Submitted May 9, 1898. as to these articles, and did not exceed its jurisdiction in so doing. So that even though the $492.52 was not a trust fund in his hands, as the district court had decided, but a mere debt due from him, because, as he alleged, that sum had been taken by another, and he had simply agreed to make 1 good, the adjudication of the district court was nevertheless sustainable apart from that item.

We concur in the view that it was un 171 U. S. U. S.. BOOK 43.



Decided May 31,

IN ERROR to the Court of Appeals of the State of New York. On motion to amend the mandate in this cause (reported in 169 U. S. 432, 42 L. ed. 807) so as to command that the judgment be reversed only in the particulars described in the opinion of this court. Motion


See same case below, 144 N. Y. 50.


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