Louisville & N. R. v. Bitterman

PARDEE, Circuit Judge (after stating the facts). We have given rather a full statement of the case to show that no important phase of it has escaped our attention. The right of the Louisville & Nashville Railroad Company, as a common carrier of passengers for hire, to issue round trip excursion and tourist tickets at reduced rates is incontestable ; and this right is in and for the public interest and profit, and is of great value to the company. In issuing such tickets, in order to prevent imposition and fraud and prevent injury to its regular passenger business, the company has the right to contract with a person availing himself of reduced rates for identification of the person to whom the particular ticket is issued, and that the ticket issued shall not be transferable, but shall be void in the hands of another person than the one to whom issued. See Moshar v. Railway Co., 127 U. S. 390, 8 Sup. Ct. 1324, 32 L. Ed. 249; Boylan v. Hot Springs, etc., Co., 132 U. S. 146, 10 Sup. 50, 33 L. Ed. 290. The case shows that on complainant’s and appellant’s great system, running through some nine states, with railroad connections in all directions, this line of business is of great dimensions and continuous transaction, and that the complainant has been from time to time issuing, and will be required from time to time to issue, and will issue, such tickets for reduced rates with special provisions for identification and nontransfer. The defendants and appellees are charged with buying and procuring the specially reduced-rate tickets of the company from persons who have no right to sell or transfer them, and then with selling or delivering them to persons traveling over the company’s lines, who have no right to avail themselves of the reduced rates, and who, by tendering the said void tickets to the agents of the company and availing themselves of the same, perpetrate a fraud on the company, injuring it in its legitimate business and putting the company to large expenses’ apd outlays. And the defendants insist that they expect to continue and will continue to buy and sell and deal in the said nontransferable tickets. It is too plain for argument that the admitted dealings by the defendants in the nontransferable tickets of the company is a great injury to the company and a fraud on the uninformed persons induced to buy the same, and that, with those informed persons who buy such tickets from the defendants to use in traveling over the company’s lines, the defendants are accessory to the proposed fraud. It would be a waste of time and words to elaborately set forth in this opinion the arguments and authorities showing that the business of the defendants, as outlined above, is illegitimate and contrary to equity and good conscience. [43] The main and only important objection to granting relief to the company, under the bill filed in the Circuit Court, is that the court is without jurisdiction. This objection, as set forth in the answer, the demurrer, or the motion to file plea under section 5 of Act March 3, 1875, c. 137, 18 Stat. 472 [U. S. Comp. St. 1901, p. 511], is based on the proposition that the amount involved does not exceed $2,000, exclusive of interest and costs. We have seen that the complainant is carrying on a legitimate line of business of great extent, and that the defendants are and will continue depredating, infringing, and inj tiring the complainant in said business, contrary to right and equity. The value of this line of business must necessarily be many times greater than the sum of $2,000. We should do violence to common sense, if,-under the established facts of this case, we permitted ourselves to doubt it. The actual injury measured in dollars that the defendants have inflictcd, and if unhindered will inflict, depends upon the number of void tickets passing through their hands successfully imposed on the agents of the complainant, and the amount the complainant may be compelled to expend for additional guards, conductors, and inspectors to prevent the frauds resulting froth the defendants’ free hand in their illegitimate dealings. The bill shows that, at the time it was filed, enormous crowds of people were about to attend the United Confederate Veterans:' Reunion at New Orleans, thousands of whom would travel over complainant’s lines upon such reduced-rate nontransferable tickets. One of the objects of this bill was to prevent the scalping of this large issue of United Confederate Veterans’ Reunion tickets. The defendants admitted complainant’s allegations in respect to the thousands of tickets to be issued and the large number who would travel thereon, and admitted their intention to buy and sell the same in disregard of the terms thereof. It was alleged that complainant would thus be defrauded of thousands of dollars, and that, hv reason of the impossibility of detecting and preventing the sale and resale of such nontransferable tickets, complainant would be subjected to constant and frequently repeated losses and irreparable injury far exceeding the sum of $5,000, exclusive of interest and costs. It was further alleged that complainant was in the habit or business of issuing such reduced-rate nontransferable tickets on the frequently occurring occasions of conventions and other like events bringing large concourses of people to New Orleans, as well as on the occasions of the annual Mardi Gras festivals, and that defendants were engaged in the business of inflicting great loss and irreparable injury upon complainant by soliciting and inducing the original purchasers of such tickets to sell the same to defendants, who disposed of them to other persons to be used for passage on the trains of complainant. These allegations art substantially admitted in the answer. The bill alleges: “That the amount involved in this controversy exceeds, exclusive of interest: and costs, the sum of $5,000: that the value of the business which orator seeks to protect, and the rights which it seeks to have recognized and enforced, exceeds in the case of each defendant the sum of $5,000, exclusive of interest and costs.” [44] The uncontradicted evidence of Ridgely, in charge of the New Orleans division of the complainant is: • “Tlie scalpers succeed unquestionably in getting a large number ot tickets over our line every year, running up into the hundreds, and possibly into the thousands. We have arrived at the conclusion, from the large number of tickets our conductors have taken up, and I should judge that the Louisville & Nashville Railroad suffers every year from $15,000 to $18,000 or more every year. On this division it is almost that amount.” In Nashville, C. & St. L. Ry. Co. v. McConnell (C. C.) 82 Fed. 72, involving the matter of enjoining “scalpers'’ of reduced-rate round-trip tickets and where the jurisdictional amount in controversy was denied, Judge Clark held: “A preliminary question is made on the jurisdiction of this court in respect of the amount or matter in controversy. Although this question is not first presented in argument, it must first be determined in ruling on the cases; for, if this court is without jurisdiction, it is not within its province to deter-mine the other questions raised. The contention is that these bills are substantially suits upon the ticket contracts, to recover damages for a violation thereof, or for specific execution thereof, and that the right of action is separate upon each ticket, and that such rights or claims cannot be joined together in this suit so as to make an amount that gives jurisdiction. It is agreed, Jin order to save a larger accumulation of costs, that, if the court entertains the opinion that there is jurisdiction against each defendant in a separate" suit, no objection will be urged against entertaining suits against the defendants jointly. From what has been said, it will readily be seen that, in my opinion, these are in no just sense suits upon the contract, nor for specific performance, •but are suits to protect the business of the complainants against the irreparable mischief being suffered by reason of the fraudulent use and abuse of these ticket contracts; and the amount or value of the matter in controversy is not the damage that might be specifically recovered in a suit upon any or more of these contracts, but is the protection furnished to the plaintiffs, and the loss prevented by the fraudulent use of any and all of these void papers. It is the value of the whole object of the suit to the complainant which determines the amount in controversy. In Railroad Co. v. Ward, 2 Black, 485, 17 L. Ed. 311, bill was brought to abate a public nuisance, and it was held that the true test of jurisdiction as to the amount was the value of the object to be gained by the bill, which object was the removal of the nuisance complained of. So, also, in Railway Co. v. Kuteman, 4 C. C. A. 508, 54 Fed. 552, the suit was by a railroad company for an injunction to restrain a shipper from prosecuting in the state courts a multiplicity of suits for overcharge in freight; the question being over the right of the company to maintain a schedule rate under which the charges were made. And the court held that the true test of the jurisdictional amount was the value of the right to maintain the rate, and not the particular sums involved in the separate suits. The exact language of the court is: ‘In a suit for an injunction the amount,in dispute is the value of the objéct to be gained by the bill. Fost. Fed. Prac. § 16. An injunction may be of much greater value to the complainant than the amount in controversy in eases of dispute which have already arisen. Symonds v. Greene (C. C.) 28 Fed. 834; Whitman v. Hubbell (C. C.) 30 Fed. 81. The maintenance of its rates is the real subject of dispute, and the object of the bill and the value of this object must be considered. Railroad Co. v. Ward, 2 Black, 485, 17 L. Ed. 311. This value not being liquidated or fixed by law, the alleged value, especially on demurrer to the bill, must govern.’ In Smith v. Bivens (C. C.) 56 Fed. 352, the bill for injunction was by the owner of a large body of land, valuable only for its pasturage rights and privileges, to protect that right'from use by cattle and stock owners, neighbors of the land of complainant, under authority of an act of the Legislature of South Carolina changing the previous law, which required owners of cattle and stock to keep, them fenced in so as to exempt plaintiff’s land, with other lands, from the operation of the act. The court held [45] that the true test of the jurisdiction was the value of the entire pasturage right of the complainant, which was to he protected, and not the amount as between the complainant and any one of the cattle owners proposing to usc-tliis right without compensation. Judge Simonton observed: ‘The case conies within Railroad Co. v. Ward, 2 Black, 492, 17 L. Ed. 311, or as it is stated in Railway Co. v. Kuteman, 4 C. C. A. 503, 54 Fed. 552, in a suit for an injunction, the amount in dispute is the value of the object to be gained by the bill.’ ” On the reasoning and authorities as given by Judge Clark, and particularly on our own holding in Texas & Pacific v. Kuteman, 54 Fed. 552, 4 C. C. A. 503, we are constrained to hold that, on the facts pleaded and proved in this case, the amount or value in controversy exceeds the sum of $3,000, exclusive of interest and costs. The defendants contended in the lower court, and learned counsel in elaborate brief here contends, that, for the wrongs to its business to be perpetrated by the defendants, the complainant has a complete and adequate remedy at law. Counsel cites a large number of adjudged cases wherein relief in equity was denied, because the remedy at law was plain, adequate, full, and complete; but, although well decided, these cases furnish us no assistance. In the matter of the defendants’ illegitimate, mischievous, and fraudulent acts done and threatened, it would tax the ingenuity of counsel to point out any plain remedy at law, and would be impossible to point out any remedy at law in any sense measuring out to the complainant complete and adequate relief. In Pomeroy’s Equitable Remedies, vol. 3, § 634, the matter of injunctions against frauds on contractual rights is discussed, with the conclusion in regard to remedies against “scalpers,” that remedies at law are inadequate and injunctions proper. Cases relied upon are cited in footnote, and of so late date as to include Judge Parlange’s decision in the Circuit Court in the case now under review. In Angle v. Chicago, St. Paul, etc., Railway Co., 151 U. S. 1, 3, 14 Sup. Ct. 240, 38 L. Ed. 55, the court says: “It lias been repeatedly held that, If one maliciously interferes in a contract between two parties, and induces one of them to break that contract to the injury of the other, the party injured can maintain an action against the wrongdoer.” And see Flaccus v. Smith, 199 Pa. 128, 48 Atl. 894, 54 L. R. A. 640, 85 Am. St. Rep. 779, and Raymond v. Yarrington (Tex. Sup.) 73 S. W. 800, 63 L. R. A. 962. This doctrine is applicable to the case of a ticket scalper who induces, assists, and enables the purchaser of a nontransferable railroad ticket to transfer the same with a view to the ultimate sale of the nontransferable ticket to some person not entitled to use the same.* That the defendants to the bill filed in the court below have repeatedly interfered and procured the violation of complainant’s contract, and propose to continue in the same line of action, is fully shown in the pleadings and proof in the transcript. The remedv at law is plainly inadequate, because not only involving a multiplicity of suits, but because of the difficulty of detecting each offense and of ascertaining pecuniary equivalents for the injury done to complainant’s business and for the inconveniences, annoyances, ektra expense, outlays, and risks. [46] involved in the 'matter. The case therefore shows an actionable wrong of a recurrent and continuing nature, and, to prevent the same, the complainant is entitled to an injunction. We think, further, that on the case made in the bill the injunction should be permanent, and we do not perceive the necessity or propriety of driving the complainant to file a bill for a special injunction on every occasion which it finds necessary in the conduct of its business to issue nontransferable tickets at reduced rates. A court of equity having jurisdiction of the parties and subject-matter should, in its final decree, administer full relief. See Pom. Eq. Jur. vol. 1, § 242. We find none of the errors assigned on the cross-appeal well taken. The cause is remanded to the Circuit Court, with instructions to enter a decree in accordance with the views herein expressed, the costs of the appeal and the cross-appeal to be paid by the defendants.