Carroll v. Chesapeake & O. Coal Agency Co.

SIMONTON, Circuit Judge (after stating the facts as above). The ground of objection to the jurisdiction of the court below as a court of the United States is that the coal companies defendants have interest in the subject-matter of the bill, which will properly align them with the complainant, and that, so aligning them, the said coal companies all being citizens of the state of West Virginia, there will appear a controversy on each side of which are citizens of the state of West Virginia. And for this these defendants rely upon Blacklock v. Small, 127 U. S. 96, 8 Sup. Ct. 1096, 32 L. Ed. 70, and cases there quoted. The principle of these cases is that, where there is a cause of action in a case, and in that cause of action one of the defendants has precisely the same character of interest as complainant, the case cannot proceed in a Circuit Court of the United States if such defendant is a citizen of the same state as any of the codefendants. These cases do not apply here. The cause of action which complainant has against the individual defendants is very different from that which the coal companies may have against them. The prayer for injunction is based upon the allegations in the bill that the complainant is exposed to irreparable injury. The facts to sustain these allegations are that, having contracted to sell all the product of the coal companies defendants, and to guaranty such sales, the complainant, relying upon these contracts, had entered into other contracts for the delivery of coal and coke, amounting to more than 2,000,000 tons of coal and many hundred thousand tons of coke, deliverable in the coal year, to very many parties controlling large interests; that, owing to the actions of the individual defendants, this coal and coke cannot be mined and delivered. Consequently complainant would be compelled to break all of its contracts, especially as it could nowhere else obtain coal of the character it had contracted to deliver. Thus not only would it incur heavy pecuniary loss immediately, but its business would be utterly destroyed in the future. That is the gravamen of the bill, and upon this must stand the prayer for injunction and relief. Now, with the contracts made by complainant with the consumers, the coal companies defendants have no concern whatever. Nor have they any concern with the pecuniary losses met by complainant on these contracts, nor with the time or mode of their fulfillment. When they deliver coal and coke to the complainant, the price is fixed, and its payment is secured at all events. It is true that, if the coal companies do not deliver coal, or are pre [310] vented from delivering coal, they suffer injury as well as the complainant. But it is an injury very different from that suffered by the complainant. The complainant suffers at once an irreparable great pecuniary loss by reason of the nonfulfillment of its contracts with the consumers. The coal companies suffer an interruption in their profits, a cessation of sales; but they have on hand their mines, from which coal has not been taken, and on the resumption of work they can recoup. It .is only a postponement of sales and of profit and income, not an absolute loss. And in this respect there is no community of interest between complainant and the defendant coal companies. If, therefore, the bill had been so framed as to embrace the complainant and the coal companies as co-complainants, the Coal Agency Company seeking its relief because of its loss on its contracts, and the coal companies because they were deprived temporarily from income, the bill could be well objected to as multifarious. Besides this, the cause of action of the coal companies against these individual defendants would be for an invasion of, and highhanded trespass on, their property, interference with their laborers, and inducing them to quit work; the cause of action being the direct result of the conduct of thé individual defendants. The cause of action of the complainant would be because of the indirect result of the action of the individual defendants — a case coming within that class of cases such as the case of Scott v. Shepherd, 2 W. Blackstone, 891, also reported in Smith’s Leading Cases, vol. 1, p. 737, and the other cases quoted and discussed by the judge below in his clear and learned opinion, a part of this record. The principle of these cases is that, if one does an unlawful act directed against another, and the immediate consequence of the unlawful act does injury to a third person, he is responsible to the third person, although he never had in contemplation any injury to him. Wherever' a man does an unlawful act, he is responsible for all the consequences. See Griggs v. Fleckenstein, 14 Minn. 81 (Gil. 62), 100 Am. Dec. 199; Tarlton v. McGawley, Peake’s Nisi Prius Report, p. 270, quoted in the opinion below. It is true that in one respect the complainant and the coal companies have a common interest, and that is in the uninterrupted- operation of the mines; but, as we have seen, for wholly different reasons. The complainant has no share with them in the profits of their respective mines, nor have the coal companies any interest in the losses on the contracts of the complainant. The case- may be illustrated by a proceeding on the part of a mortgagee to foreclose his mortgage on land subject to the lien of another mortgage. To such a bill, if the senior mortgagor seeks to foreclose the prior mortgage, all the lienholders subsequent to him must be made parties (Bates on Federal Procedure, § 359), and they can be made parties defendant. The interest of the two mortgagees in one respect are the same— both want their money by foreclosure and sale. Yet such a bill filed in this court has been and can be sustained, even if the subsequent lienholders and the mortgagor, defendants to the bill, are citizens of the same state. See, also, Hotel Co. v. Wade, 97 U. S. 20, 24 L. Ed. 917. [311] Besides this, the complainant is entitled to sell all the coal mined and coke made by these coal companies, and is interested in securing the largest quantity possible. It has a right to ask that the coal companies exhaust all means of securing a supoly of coal. To this end it prays that the coal companies be restrained from permitting the individual defendants and any other persons from assembling, marching, or doing any act on their own lands which will interrupt the production of coal. The prevention of these unlawful acts is not within the power of the complainant, and cannot be successfully effected without the co-operation of the coal companies, and such co-operation will be more readily and successfully exercised if it meet with the sanction and be given under the mandate of this court. Even were it the case that no relief was sought against the coal companies, and that they have an interest in the result, still, if the complainant has grounds for relief against the individual defendants — a ground peculiar to itself, a cause of action that it can sustain — then these coal companies are not necessary parties to the bill, and it may be dismissed as against them, the action in the meantime proceeding against the individual defendants. Wormley v. Wormley, 8 Wheat, p. 450, 5 L. Ed. 651; Removal Cases, 100 U. S., p. 469, 25 L. Ed. 593. The other grounds of demurrer go to the jurisdiction of the court as a court of equity: (a) Upon its face the allegations of the bill show its want of equity, (b) The complainant is not the real party in interest; the coal companies are the real parties in interest, (c) Misjoinder of defendants. We will not take these up in their order, but will first inquire, is the complainant the real party in interest? As we have seen, the gravamen of the complaint of the bill is that the complainant, upon the faith of the contracts with the coal companies, had, upon its' own responsibility, and at its own risk, entered into contracts with very many consumers of coal and coke for delivery during the coal year; that by reason of the action of the individual defendants the supply of coal was cut off or destroyed, and in consequence thereof great loss, present and future, has come upon the complainant. It complains of its loss, and seeks relief from it. It is true that in a sense the complainant is agent for the coal companies, and in a sense, as their agent, disposes of the coal; that by the terms of its contract with the coal companies, immediately upon the delivery of the coke and coal on the cars the complainant becomes liable for its price to the coal companies, and pays this price at all events. With the disposition of the coal, the parties to whom it is to be delivered, their solvency or insolvency, the time of delivery, and the consequences of nondelivery, the coal companies have no concern whatever. They do not contract with the consumers; they do not know the consumers; they are not informed of the names of the consumers; they authorized no contract with them. All these are the acts and concern of the complainant, made and assumed by it as its own contracts, for the nonperformance of which it is alone responsible. If, therefore, the complainant has any cause of action at all because of the loss thus occasioned to it, it has such right of action itself against [312] the individual defendants, and could not seek its remedy in the name of or through the coal companies, if for no other reason, because the loss for which they seek relief was no concern of the coal companies. Is there equity in the bill? It is contended that the bill does not disclose any interest of the complainant in the mines or products of the individual defendants; that the complainant has no interest in the coal and coke until it is delivered on the railroad, when, and when only, its property interest in the coal and coke arises; and that the bill does not show any contract between the complainant and the coal companies to deliver coal, either as to time or quantity, only to sell such coal as it is delivered. It is impossible to read this bill of complaint without seeing that it is based on the fact that the complainant has a contract with each of the coal companies for the delivery to it of all the coal such company can mine. It must be remembered that the case of the complainant against the individual defendants is not on the contracts, nor for a breach of the contracts. It arises because of these contract's. So that the terms of the contracts and their conditions need not be set forth. It is enough if it appear that such contracts exist. The bill alleges that complainant has been engaged for years in selling coal and coke. That.this business has been confined to selling the coal and coke produced by the coal companies defendants; that it is the only person who sells the coal and coke produced by them. The complainant has contracts with all of the coal companies defendants, and that under and by virtue of said contracts it has in this one year contracted to deliver to consumers in this country and elsewhere 2,000,000 tons of coal and several hundred thousand tons of coke. The bill and its prayer show that these coal companies were being operated, and that all their operations were suspended by the action of the individual defendants, and that the loss thereby occasioned to complainant is irreparable, because “the said defendant coal companies are not required to deliver to your complainant coal and coke when their employes in their mines are on a strike or refuse to work.” Is not the inference from these statements irresistible that all the coal companies defendants were engaged in mining and manufacturing coal and coke; that they were bound to deliver to the complainant all the results of their operations; that, in consideration of and in reliance upon this, complainant had engaged in large contracts for delivery, and had assumed vast responsibility and is so exposed to great loss ? Is it not also clear that the complainant has direct and immediate interest in the working of the mines and in the use of the ovens in the delivery of the coal and coke, even if it has no property in the coal and coke until it is actually delivered? As to the misjoinder of parties defendants. As has been seen, the complaint of the bill is great loss to it by reason of the inability to receive coal from the mines of the coal companies. This inability arises from the fact that the mines are not worked. It is.the duty of the coal companies to have the mines worked. That of the individual defendants not to obstruct this operation. Discharging their duty, the coal companies should exhaust effort in obtaining workers [313] for their mines, and in restraining and preventing the obstruction of the work. Non constat that the action of the individual defendants may not have been taken because of some acts of omission or commission on the part of the coal companies. At least complainant has the right to know about this, and the coal companies have the right to disavow and disprove it. Until this is done, the fault may lie with the coal companies and the individual defendants, with either or'both. Besides this, as the case of the complainant is because of these contracts with the coal companies, it would appear that these companies are proper if not necessary parties. The individual defendants have concluded at this stage of the case to rest their defense on the demurrer. They admit for this purpose the truth of the facts stated in the bill. Assuming, therefore, that these facts are true, that the individual defendants have either committed or sanctioned or encouraged the acts of gross violence and lawlessness contained in the bill, the court below had no alternative but to issue its injunction. The decree of the court below is affirmed.