of jurisdiction.

[blocks in formation]

Before discussing whether the Trust Company has an interest and, if so, its character and effect, the nature of this suit should be considered.

1. The cause of action.

This is not a suit upon the original guaranty. It is a suit to enforce a judgment. The prayer of the bill is that the property acquired by the New York Railways Company "be declared to be subject to the lien of said judgment." The rights on the original guaranty, whether they be treated, by virtue of the stamping on each bond, as an aggregation of 1500 separate causes of action or be treated as a single cause of action for the benefit of the 1500 bondholders, were merged in that judgment. This is true, even if, as contended, the guaranty to the Trust Company stamped on each bond "for the benefit of the holders thereof" be construed as importing a promise of payment directly to the holder on which he was at liberty to sue in his own name. For the recovery of the judgment extinguished through merger the original cause or causes of action and the judgment is one recovered by the Trust Company as trustee.1

2. The interest of the Trust Company.

Whatever may have been the situation originally with respect to rights of individual bondholders on the guaranty, we have now a single judgment held by the Trust Company as trustee for the pro rata benefit of 1500 bondholders. The plaintiffs allege that they hold 1373 of these bonds-that is, a fraction only of the beneficial interest. It is thus clear that the minority bondholders as well as the railway companies defendant require for the protec

"If there be any one principle of law settled beyond all question, it is this, that whensoever a cause of action, in the language of the law, transit in rem judicatam, and the judgment thereupon remains in full force unreversed, the original cause of action is merged and gone forever." United States v. Leffler, 11 Pet. 86, 100, 101. See also Mason v. Eldred, 6 Wall. 231; Gaines v. Miller, 111 U. S. 395, 399.

[blocks in formation]

tion of their respective interests that the Trust Company be a party to the litigation; the minority bondholders, so that they may share ratably in the proceeds; the railway companies, in order that they may upon paying the amount of the judgment be discharged from the possibility of further liability. The judgment is a unit and the relief sought on it is necessarily for the benefit of all. Blacklock v. Small, 127 U. S. 96, 104. But a suit by some bondholders does not, by the allegation that it is in behalf of all others similarly situated, become a class suit binding on all. Wabash R. R. Co. v. Adelbert College, 208 U. S. 38, 57. And for the protection of the Trust Company itself joinder as a party is essential, in order that upon distribution of any proceeds it may be discharged from obligations to its beneficiaries.

To the state of facts presented here, Greene v. Republic Fire Insurance Co., 84 N. Y. 572, which is strongly relied upon by plaintiffs, has no application. In that case the assignee of a chose in action, having recovered a judgment in Mississippi, where he was obliged (as by the common law procedure) to sue for his own use in the assignor's name, was permitted to sue on the judgment in New York in his own name; since the New York Code requires suit to be brought in the name of the real party in interest. There the assignor having assigned the cause of action had no interest in it when the action was commenced in Mississippi and consequently no interest in the judgment; and the judgment record so recited, declaring that it was "for the use and benefit of Edward A. Greene." Here there has been no assignment either of the cause of action or of the judgment. The prayer of the complaint was that the Trust Company "as trustee may have judgment against said Metropolitan Company"; and in accordance with that prayer judgment for the deficiency was entered. So far as the record discloses, the deficiency judgment against the Metropolitan Company,

[blocks in formation]

like that against the Crosstown Company and the property transferred by the mortgage, is held by the Trust Company as trustee for all the bondholders. That under such circumstances the trustee is a necessary party to this suit is clear.

3. The affiliation of the Trust Company.

It is clear that the interest of the Trust Company in this controversy lies wholly with the plaintiffs. This is shown, among other things, by the request in its answer that the relief prayed for in the bill be granted. No reason is assigned in the bill or in the answer of the Trust Company for its refusal to sue; and none suggests itself save the willingness of an accommodating trustee to enable its beneficiaries to present that appearance of diversity of citizenship essential to conducting this litigation in the federal court. It is not contended that this refusal to sue makes the Trust Company an adversary to be classed for purposes of jurisdiction with the real defendants-as in those cases where the refusal to sue was part of a fraudulent participation in the wrongdoing, and where the trustee or corporation in effect ranged itself in opposition to the relief sought.2 The Trust Company having, as we have shown, a real interest in the controversy, which makes it a necessary party to the suit, must be aligned as a party plaintiff, where its interest lies.3

Since the necessary realignment of the Trust Company as party plaintiff is fatal to the jurisdiction of the District Court, it is unnecessary to consider the legal effect of the fact stipulated, that a large part of the bondholders rep

1 See Knapp v. Railroad Company, 20 Wall. 117, 123; Richter v. Jerome, 123 U. S. 233, 246.

2 Venner v. Great Northern Ry. Co., 209 U. S. 24; Doctor v. Harrington, 196 U. S. 579; Kelly v. Mississippi River Coaling Co., 175 Fed. Rep. 482; Groel v. United Electric Co., 132 Fed. Rep. 252.

3 Blacklock v. Small, 127 U. S. 96, 104; Harter v. Kernochan, 103 U. S. 562; Pacific Railroad v. Ketchum, 101 U. S. 289; Allen-West Commission Co. v. Brashear, 176 Fed. Rep. 119; Shipp v. Williams, 62 Fed. Rep. 4.

[blocks in formation]

resented by plaintiffs are likewise citizens and residents of New York.

4. Whether the suit is an ancillary one.

The plaintiffs, relying upon Wabash R. R. Co. v. Adelbert College, 208 U. S. 38, 53, attempt to sustain the jurisdiction of the court on the ground that this suit is ancillary to the foreclosure proceedings against the Metropolitan Company in the District Court. But the facts in that case bear no resemblance to those here under consideration. There the rights and lien which it was declared the federal court had exclusive jurisdiction to ascertain and enforce were expressly reserved by the decree; and the purchaser under the decree took title expressly subject to them. The decree of foreclosure under which sale was made of the property of the Metropolitan Company, which was later transferred to the New York Company, contained, so far as appears from the record, no reservation whatsoever concerning liens or similar rights. And there is in the answer of the New York Company the uncontroverted statement that the properties subject to the foreclosure "were sold to the purchasers and to the New York Railways Company, free and clear of any lien, claims or interest in any party outstanding, except the interests" of those expressly provided for in the Plan of Reorganization; and that the proceedings resulting in the deficiency judgment against the Metropolitan Company here sued on "did not constitute a claim against, or a lien on, or an interest in any of the property rights or estate of the Metropolitan Street Railway Company." Furthermore the bill in the instant case does not purport to be ancillary to the Metropolitan Company foreclosure proceedings. Plaintiffs here seek merely to establish an equity against the property of the New York Company, on the theory that the rights of the Crosstown bondholders have been improperly ignored. They set up a wholly independent cause of action. Decree affirmed.


244 U. S.





No. 192. Argued April 20, 1917.-Decided May 21, 1917.

Under the doctrine established by Railroad Company v. Lockwood, 17 Wall. 357, and many cases decided since, a person traveling by railroad as a caretaker of live stock on a "free" or "drover's" pass is a passenger for hire as to whom a stipulation that the carrier shall not be liable for personal injuries caused by its negligence is void. As applied to caretakers of live stock, § 1 of the Hepburn Act of June 29, 1906, uses the term "free pass" in the sense which established custom had given it and judicial determination had sanctioned long before the act, viz., as meaning not a gratuitous pass but one issued for a consideration constituting the caretaker a passenger for hire, within the doctrine of the Lockwood Case. Charleston & Western Carolina Ry. Co. v. Thompson, 234 U. S. 576, distinguished.

Where a connecting carrier, sued for personal injuries by a person traveling on a drover's pass, based its defense on a release of liability for negligence contained in the contract of carriage issued by, and in accordance with the tariffs of, the initial carrier, under the Carmack Amendment, Held that it was estopped from claiming also that under its own tariff the issuance of such passes was forbidden and unlawful and that therefore such traveler was unlawfully upon its train.

A provision in a tariff that "free or reduced transportation shall not be issued for shippers or caretakers in charge of live stock shipments, and such shippers or caretakers shall pay full fare returning," is construed as implying that such transportation will be allowed to the destination of the shipment, but not for the return trip of the caretaker. When connecting interstate carriers, in accordance with tariffs of the initial carrier duly filed and published, contract to carry a shipment of live stock with a caretaker for a specified rate in money, the carriage quoad the caretaker is a carriage for money, part of the total rate, and the mere fact that the part attributable to the caretaker is

« ForrigeFortsett »