Daniels v. Portland Gold Mining Co.

HOOK, Circuit Judge. This is a suit by three mining companies, two being citizens of other states than Colorado and one a citizen of 'Great Britain, on behalf of themselves and more than a hundred other corporations and individuals named in the bill, and also many others not named because unknown, all engaged in mining, milling, buying, or selling ore in the Cripple Creek mining district of Colorado, to enjoin a number of persons who are citizens of that state from operating assay offices, and from purchasing ore produced in that district. It is alleged that all the mineowners of that territory, whether named or not, have a common interest in the object of the suit, and in the judgment of complainants would join in it if they could be seen. . The gist of the complaint set forth with much detail is that high-grade gold ore worth from $1 to $100 per pound is being constantly stolen in small quantities, but of large aggregate, from the mines antd the mills, smelters, and other places where ore is treated, by employés, lessees, and others, and that the criminal practice is knowingly encouraged and facilitated by defendants, who, under the pretense of conducting assay offices, receive the stolen property and buy it for a percentage of its value. In other words, it is claimed that the defendants, who in the language of the region are called “high-grade assayers,” conduct' “fences” or places where the thieves dispose of the stolen property. The prayer of the bill is that they be enjoined from conducting assay offices, and from purchasing or receiving ore not only from complainants’ employés and lessees, but also from any other person in the mining district. The trial court gave complainants a temporary injunction restraining defendants from purchasing, receiving for treatment, handling, or in any manner dealing in any ore, ore products, or other materials from mines or mills in the Cripple Creek mining district without first notifying the superintendent of one of the three companies which brought the suit at the company office, or the “secretary of the Cripple Creek District Mineowners & Operators Association” at its office in Victor or Cripple 'Creek, Colo., as the representative of complainants, of the fact that the ore, product, or material had been offered for sale, treatment, or handling, and giving the name of the person who offered it, the name of the mine or mill from which it purported to come, th'e owner thereof and the number of pounds, and also stating that its original condition when first offered had not been changed or altered. It was further provided in the order of injunction that, if either of the superintendents or the secretary as the representative of complainants should within 24 hours after receipt of such a notice from a defendant notify him, in turn, that the ore or material had been stolen from a complainant, then the defendant must hold it for [639] 48 hours thereafter before purchasing, treating, or dealing with it or agreeing to do so, and, finally, defendants were enjoined from treating, handling, or dealing in any ore, ore products, or materials of any kind or description except under the foregoing conditions and restrictions. [1] We think the injunction was an inadmissible exercise of the judicial power. Consistently with the fullest recognition of the progressive and flexible character of equity jurisprudence and its continuing adaptability to the increasing magnitude and complexity of modern affairs, care must nevertheless be taken not to transgress its fundamental limitations. Though the writ of injunction may be properly employed to protect rights of property, however great or small, complicated or simple, it should not be made a vehicle for invading the legitimate legislative province of government or a means of establishing a system of rules for the regulation of the business of a community. Nor should it be used as an ordinary supplement to the criminal laws of the state. There are several features of complainants’ bill, which is most skillfully drawn, and of the proofs and order of injunction that at once attract notice. The suit was brought by three out of a large number of corporations and individuals engaged in mining, milling, buying, and selling the products of a great mining district. It was framed for the protection of the interests of all, known and unknown, who were engaged in the business. The presence in the suit of all of them, either actually or in a representative'way, was, practically speaking, vital to the relief sought, because it contemplated the exclusion of defendants from the right to assay, treat, buy, sell, or handle in any manner or form any of the products of the mines or mills in the district by whomsoever produced. An injunction as broad as the prayer of the bill would affect the right of every mine and mill owner to do with his product as he pleased. While it was averred that high-grade ore was easily recognized upon casual inspection, it was not claimed that the ore of the three complainants, whether high grade or low grade, was distinguishable from that of the hundred and more other companies and persons named in the bill or of the many others unknown and not named. It was therefore necessary that the suit proceed as upon a common concert of all the mining and milling industries of the district. This is so because if any of them stood upon their right, which the court could not lawfully deny, to employ a defendant as an assayer or to sell or otherwise intrust to him their product, the sweeping object of the suit would be defeated. It cannot be supposed that at the instance of some the court would restrain or regulate all of them in the exercise of their legal rights. At this point we pass by the question of jurisdiction based on the contention that as gauged by the object of the bill all the mine and mill owners were indispensable as parties complainant, and the fact that many of them were citizens of Colorado as were the defendants. Again, it appears from the bill and the proofs at the hearing that some of those in whose interest the suit was brought were themselves engaged in buying, selling and handling the mine products, also that there were assayers attached to some of the mines and mills and also independent assayers not so attached, but legitimately engaged in the [640] custom business on their own account. Their methods of doing business and the care they took to avoid stolen property were explained. These people were not to be affected by the suit. The order of injunction itself impliedly recognized the natural right of every person to be an assayer or to buy and sell the products of the mines, but it undertook judicially to establish a general line of cleavage between honesty and dishonesty in the conduct of occupations which are intrinsically lawful and open to the pursuit of all. To do so it prescribed regulations to be observed by defendants and to be worked out through an agency composed of representatives of the complainants; and it prohibited defendants from engaging in the business at all except upon the conditions laid down. Even in legislation of that character the administration is committed, not to interested private parties, but to public officials. The case did not proceed as upon a series of specific trespasses by particular defendants against the property of particular complainants and to prevent a continuance of them; but there was an attempt to make its scope unusually broad by including as complainants every mine and mill owner in the district, whether or not his ore had been stolen and handled by defendants, and by including all the defendants, whether or not each had trespassed upon the rights of all the complainants. And, even if this were proper, the defendants were enjoined, not merely from continuing their wrongful practices, but also from thereafter following honestly a lawful occupation except according to regulations laid down by the court. The cases relied on as precedents show how far the injunction here has gone afield. Two of them are typical. In Board of Trade v. Christie, 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031, the defendants, who kept bucket shops, were enjoined, not from continuing their business except under regulations nor from using the market quotations of others, but only from continuing the use of complainants’ quotations which they obtained surreptitiously and without right, and this though the bucket shops were as unlawful as it is claimed the shops of the high-grade assayers were, and depended as much on the quotations as the defendants did on stolen ore. And as for being a public nuisance, which is urged here as a supporting ground, there is no essential difference between a place where gambling is done as in bucket shops, and one where stolen property is handled. In the board of trade case the court confined itself to the protection of the distinct rights of the complainants, and left the prohibition or regulation of defendants’ business to other departments of the government. Bitterman v. Railroad, 207 U. S. 205, 28 Sup. Ct. 91, 52 L. Ed. 171, 12 Ann. Cas. 693 (reported below as Louisville & N. R. Co. v. Bitterman, 75 C. C. A. 192, 144 Fed. 34, and Id. [C. C.] 128 Fed. 176), was a suit to enjoin ticket brokers or scalpers from dealing in nontransferable reduced rate railroad tickets over the complainant’s line of road. It has the same distinguishing aspects as the bucket shop case. It may be further noted that the injunction granted was only against the defendants, their agents, etc., though complainant asked that it be “broad enough to include all who knowingly do what the order of the court prohibits defendants from doing.” Nor was [641] there in that case an attempt to secure an injunction for the benefit of all other railroad companies operating in the territory or district in question by averments such as we have in the present case. [2, 3] Ordinary business callings may be attended by conditions, or may offer temptations that threaten the public welfare or the lives, health, morals,.or property of those who come in contact with them. There is a stage at which the state will take cognizance and prescribe rules and regulations to prevent or lessen the evil. If the evil is deemed greater than the good, the calling may be wholly prohibited ; if less, regulated. But, whatever course is taken, it is the exercise of the police power of the state, of which a multitude of illustrations may be found in the statute books, and its expression as a rule of conduct is a legislative function. Thus in'many states the business of 'bucket shops and ticket scalpers is prohibited, and in Colorado there is a statute regulating the business of assayers and designed to prevent the very practices complained of here. Legislative regulations may be inadequate, but a court in a suit between private parties must act within much narrower lines and cannot,make others. Its decree must conform more closely to the specific infringement of the property rights of the complainant. The order of injunction is reversed. The cause is remitted to the trial court for amendment of the bill if desired, under its orders and conformably to the foregoing conclusions, or, failing amendment, for dismissal.