Sidebilder
PDF
ePub

tion as to title is precisely as it was when the original bill was filed. If the title to Isaac's personal property ever vested in his administrator it is there yet. There is nothing to show that the estate has been administered upon and its surplus distributed. Non constat the claims of creditors are sufficient to swallow up the entire assets so that nothing passes to the representatives of Louisa.

The court has been referred by counsel for complainants to section 2666 of the New York Code. It would seem that this section does not bear even remotely upon the point at issue. The citation is probably a mistake of the printer, section 2606 being intended; still the court is unable to see how the title to the shares in controversy is affected especially in the absence of proof that proceedings have been taken under the section referred to. For aught that appears the title is exactly where it was when the action was commenced,— in Isaac Bernstein's representative. It follows that the first two grounds of demurrer must be sustained with leave to the complainants to amend within 20 days by making the representative of Isaac Bernstein a party, or otherwise, as they may be advised. As to the other grounds the demurrer is overruled without prejudice to their further consideration should the action be hereafter revived.

UNITED STATES v. LA COMPAGNIE FRANCAISE DES CABLES TELEGRAPHIQUES et al.

(Circuit Court, S. D. New York. December 15, 1896.)

1. LAYING CABLES TO FOREIGN COUNTRIES-RIGHTS OF UNITED STATES. It would seem that no one, alien or native, has any right to establish a physical connection, as by means of a telegraphic cable, between the shores of this country and any foreign country, without the consent of the United States. Whether such consent shall be granted or refused is a political question, which, in the absence of legislation, would seem to rest with the executive. 2. SAME-PRELIMINARY INJUNCTION.

A preliminary injunction against laying to our shores a cable connecting with a foreign country, without the consent of the government, will not be granted, at the instance of the latter, where the connection has been completed before the motion was submitted, and it does not appear that the United States will suffer any irreparable injury by its operation until final hearing.

This suit is brought by the district attorney and the attorney general of the United States against La Compagnie Francaise Des Cables Telegraphiques, the United States & Hayti Telegraph & Cable Company, and the United States & Hayti Cable Company to prevent the defendants from laying and landing at Coney Island a telegraphic cable between this country and Hayti, without the consent of the government of the United States. Motion was made for a preliminary injunction upon bill and affidavits. Wallace Macfarlane, U. S. Atty., and Elisher Root, for the motion. Robert G. Ingersoll and Frederick R. Coudert, opposed.

LACOMBE, Circuit Judge. A careful examination of the papers and briefs has not induced any change in the opinion expressed

[ocr errors]

upon the oral argument. Some of the questions raised as to the application of the act of 1890 seem, upon the authorities, not to be free from doubt, and they should be reserved for final hearing. The summary granting of a preliminary injunction is appropriate to a state of facts which presents some element of immediate ne cessity. There is none here. The laying of the cable was completed before this motion was submitted on affidavits and briefs, and there is nothing to show that its operation until final hearing will produce irreparable injury to the United States or to any individual. It is thought that the main proposition advanced by complainant's counsel is a sound one, and that, without the consent of the general government, no one, alien or native, has any right to establish a physical connection between the shores of this country and that of any foreign nation. Such consent may be implied as well as expressed, and whether it shall be granted or refused is a political question, which, in the absence of congressional action, would seem to fall within the province of the executive to decide. As was intimated upon the argument, it is further thought that the executive may effectually enforce its decision without the aid of the courts; but, even if defendants are correct in the contention that the executive has nothing to do with the matter, it is certainly indisputable that congress has absolute authority over the subject. That body is now in session, and if any urgent necessity, not disclosed in the papers before the court, should call for immediate action, it can settle the question of assent or nonassent with such definiteness as to leave no further room for argument. Motion for preliminary injunction is denied.

SIGUA IRON CO. v. CLARK et al.

(Circuit Court, E. D. Pennsylvania. December 14, 1896.)

EQUITY JURISDICTION-BILL TO COLLECT STOCK SUBSCRIPTION-LEGAL DEFENSE. The fact that a resolution of the board of directors of a corporation under which a stockholder claims release from liability on his subscription is alleged to be fraudulent and void, will not give equity jurisdiction of a bill against the stockholder to collect the subscription. The invalidity of the resolution must be shown at law.

J. Hampton Barnes, A. H. Wintersteen, and Geo. Tucker Bispham, for plaintiffs.

J. S. Clark and R. C. Dale, for defendant.

DALLAS, Circuit Judge. The substance of the allegations of the bill of complaint in this case may be restated from the brief of complainant, as follows:

"First. That the defendants subscribed to certain shares of stock, and that the subscription has not been paid. Second. That the defendants refused to pay, on the ground that when they took the shares they had an understanding with the persons who were engaged in organizing the company that they (the shares) should be held for the company in order that they might be used in a settlement of one of the company's construction contracts; that the shares were not so used

because the contract in question fell through; and that thereafter a resolution was passed by the directors of the company directing a transfer of the stock to the company's treasurer as trustee. Third. That there was no such understanding with the company or its organizers; and that, even if there was, it was, in substance, an agreement by the company to accept certain of its own shares, which agreement would be void as to creditors. Fourth. That an action at law has been brought in this court by the company against the defendants to recover the subscription, but that there is danger that the recovery may be defeated by the resolution, the effect of the resolution might be to create a defense good in law, although invalid in equity."

The prayers are for discovery, for cancellation of the resolution, for injunction against setting it up as a defense to the common law action, and for general relief. The case has been heard upon demurrer to the bill.

I do not find it necessary to discuss the merits, and therefore will not do so. The conclusion at present reached is based solely upon the ground that a case for the equitable cognizance of this court has not been presented, and beyond that I intimate no opinion. In Stewart v. Railway Co., 2 De Gex, J. & S. 321, Lord Chancellor Westbury said:

"An instrument has been improperly obtained. The plaintiffs are entitled to have the power to use it taken out of the defendants' hands, and they are not to be called on to submit the whole case to this court as the price of its interference."

The gist of the complaint and the object of the bill were the same in that case as in this. An instrument had been improperly obtained, and its use as a defense in a pending action at law was sought to be prevented. There was a demurrer for want of equity, but the court sustained the bill. This was done upon a ground of equitable jurisdiction, which, though "an old and well-ascertained" one in England, is, in such a case as this, inadmissible in the courts of the United States, because their jurisdiction as courts of equity is restricted by the requirement that, "whenever a court of law is competent to take cognizance of a right, and has power to proceed to a judgment which affords a plain, adequate, and complete remedy, without the aid of a court of equity, the plaintiff must proceed at law." This plaintiff has proceeded at law, and may in that proceeding attain the end which he proposes to accomplish by this one. Therefore this one cannot be sustained. In Whitehead v. Shattuck, 138 U. S. 150, 11 Sup. Ct. 276, Mr. Justice Field, speaking for the supreme court, said:

"The facts set forth in the bill of the plaintiff clearly show that he has a plain, adequate, and complete remedy at law for the injuries of which he com. plains. He alleges that he is the owner in fee, as trustee, of certain described lands in Iowa, and his injuries consist of this: that the defendants are in possession and enjoyment of the property, claiming title under certain documents purporting to transfer the same, which are fraudulent and void. If the owner in fee of the premises, he can establish that fact in an action at law; and, if the evidences of the defendants' asserted title are fraudulent and void, that fact he can also show."

In the case before this court the complainant alleges that it is entitled to recover from the defendants the amount of their subscription to stock, and its injury consists in this: that the defendants are claiming immunity under a certain document purporting

77 F.-32

to exonerate them from liability, which is fraudulent and void. But surely, if it be so, the fact can, and therefore must (under Whitehead v. Shattuck), be shown in the action at law. See, also, Buzard v. Houston, 119 U. S. 347, 7 Sup. Ct. 249, and Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. 712.

Without prejudice to any right of the plaintiff respecting the matters alleged in the bill if set up in the action at law, the bill of complaint is dismissed, with costs.

GREENWOOD, A. & W. RY. et al. v. STRANG et al
STRANG et al. v. GREENWOOD, A. & W. RY. et al.
(Circuit Court, D. South Carolina. December 4, 1896.)

1. EQUITY JURISDICTION-MONEY DEMAND.

The courts of the United States sitting in equity have no jurisdiction to enforce a demand for money only, unless there be an acknowledged debt, or one established by a judgment rendered, accompanied by an interest in the debtor's property or a lien thereon, created by contract or by some distinct legal proceeding.

2. MECHANICS' LIENS-RAILROADS.

A railroad is not a building or structure, within the meaning of the South Carolina mechanics' lien law, and is not subject to such liens.

Mordecai & Gadsden and Trenholm, Rhett & Miller, for complain

ants.

Mitchell & Smith, for defendants.

SIMONTON, Circuit Judge. These two cases have been consolidated, and were heard together. The first-named case was instituted in the court of common pleas for Barnwell county, and has been duly removed into this court. The second case was a bill filed in this court by W. B. Strang, Jr., & Co., in behalf of themselves and all other creditors. The facts are these: W. B. Strang, Jr., and Co., are railroad contractors. They entered into a contract with the Greenwood, Anderson & Western Railroad Company to construct a road from Seivern to Greenwood, and further to carry on the road to Batesburg, S. C. The work was to be paid for, part in cash, and part in bonds. For the purpose of this opinion, a detailed statement of the contract is not necessary. It is sufficient to say that, after a very large portion of the work was performed, differences arose between the contractors and the railroad company, which led to a rescission of the contract, with a large claim for work done on the part of the contractors. Thereupon the contractors recorded in the proper offices of Barnwell and Lexington counties a mechanic's lien on the railroad property, and claimed the right to enforce it; whereupon the proceedings first named were instituted by the railroad company, seeking an injunction against the contractors, restraining them from setting up, seeking to enforce, or proceeding under their mechanic's lien. The state court granted a temporary injunction after hearing, and in

that plight the case has come here. After these proceedings were instituted, and the temporary injunction granted, Strang, Jr., & Co. filed a creditors' bill in this court, charging insolvency upon the part of the railroad company, bad faith and fraud in their conduct under the contract, and setting up a large claim for money due to them and unpaid under their contract, which has been secured by the record of the mechanic's lien.

The first question which arises is, has this court jurisdiction because of a lien held by Strang & Co.? The claim of Strang, Jr., & Co. is an unliquidated demand for money, in itself a matter properly cognizable in a court of law, and not within the jurisdiction of this court, unless there be an acknowledged debt or one established by a judgment rendered, accompanied by a right to the appropriation of the debtor's property for its payment, or, to speak with greater accuracy, there must be, in addition to such acknowledgment or established debt, an interest in the property, or a lien thereon created by contract or by some distinct legal proceeding. Smith v. Railroad Co., 99 U. S. 398; Scott v. Neely, 140 U. S. 113, 11 Sup. Ct. 712. It makes no difference what fraud may be charged or even proved. "Unless a creditor has a certain claim on the property of his debtor, he has no concern with his frauds." Wiggins v. Armstrong, 2 Johns. Ch. 144. As is expressed in Scott v. Neely, the existence, before the suit in equity is instituted, of a lien upon or interest in the property created by contract or by contribution to its value by labor or material or by judicial proceedings had, will enable that court to entertain a suit on a common-law demand, notwithstanding the provisions of the constitution of the United States preserving the right of trial by jury in suits at common law, when the value in controversy exceeds $20. Scott v. Neely is affirmed in Cattle Co. v. Frank, 148 U. S. 612, 13 Sup. Ct. 691. In order, therefore, to sustain the jurisdiction of the court over the second bill, it must be shown that the complainants have secured a mechanic's lien. The first bill and the injunction thereunder proceed upon the idea that the contractors are not entitled to a mechanic's lien. The same question, therefore, is the crucial question in each case: Is a contractor who is engaged in building a railroad entitled to a mechanic's lien under the law of South Carolina? The statute is in these words (Rev. St. S. C. § 2465): "Any person to whom a debt is due for labor performed or furnished, or for materials furnished and actually used, in the erection, alteration or repair of any building or structure upon any real estate by virtue of an agreement with, or by onsent of, the owner of such building or structure, or any person having authority from or rightfully acting for such owner in procuring or furnishing such labor or materials, shall have a lien upon such building or structure, and upon the interest of the owner thereof in the lot of land upon which the same is situated, to secure the payment of the debt so due him, and the costs which may arise in enforting such lien under this article, except as is provided in the following section.” This section is an exact copy of section 2350, Gen. St. S. C. 1882, which has the force of an act, and is also an exact copy of section 1 of the act of 1869 (14 St. at Large, 220).

Is a railroad a building or structure in the meaning of this act? In the absence of any decision by the court of last resort of the

« ForrigeFortsett »