Louisville & N.R. Co. v. Bitterman

• Decision Date: 27 March 1906
• Docket Number: 1,444.
• Citation: 144 F. 34
• Parties: LOUISVILLE & N. R. CO. v. BITTERMAN et al.
• Court: U.S. Court of Appeals — Fifth Circuit

144 F. 34

LOUISVILLE & N. R. CO. v. BITTERMAN et al.

No. 1,444.

United States Court of Appeals, Fifth Circuit.

March 27, 1906

The complainant railroad company is a citizen of the state of Kentucky, engaged in the business of operating lines of railroad, upon which are transported passengers between New Orleans and points in this and other states reached by complainant and its connections. The parties defendant to the bill of complaint are a number of individuals, citizens of Louisiana, engaged in the business of what is commonly called 'ticket scalping.' Three of the defendants, Marcus K Bitterman, Julius Mehlig, and Charles T. Kelsko, joined in filing responsive pleadings and contesting complainant's right to the relief sought, which was to enjoin defendants and each of them, and his or their agents, etc., 'from buying, selling, dealing in, or soliciting the purchase or sale of any ticket or tickets, or the return coupons or unused portions thereof, issued by orator or by any other railroad company for use over orator's lines of railway or any part of them, which, by the terms thereof, are nontransferable, or from soliciting, advising, encouraging or procuring any persons other than the original purchasers of such tickets to use, or attempt to use, said tickets for passage on any train or trains of orator, especially including the nontransferable round-trip tickets for use on the occasion of the United Confederate Veterans' Reunion at New Orleans in May, 1903.'

The court a quo held that complainant had a legal right to issue reduced rate nontransferable tickets; that defendants, by 'scalping' such tickets, were committing wrongful acts, violative of complainant's rights, and causing it irreparable injury; that the remedy by law was inadequate; and that injunctive relief was the proper remedy. Yet, when it came to the final decree, it refused to give preventive relief by enjoining defendants generally from 'scalping' the reduced rate nontransferable tickets, which complainant was in the business of issuing, and which defendants were admittedly in the business of buying and selling. It confined the relief accorded complainant in the final decree to making perpetual the preliminary injunctions it had rendered during the pendency of the suit; one forbidding the 'scalping' of the tickets about to be issued on the occasion of the Confederate Veterans' Reunion in May, 1903, and the other forbidding similar wrongful acts in respect to the tickets about to be issued on the occasion of the Mardi Gras festival of 1904. So much of the relief sought by complainant as related to future issues of nontransferable tickets was denied, without prejudice to its rights to seek such relief by independent proceedings on or before each occasion when it might issue such tickets.

In order to secure a reversal of the ruling that complainant must bring a separate suit for every particular kind of nontransferable ticket it proposes to issue, and a separate suit on every occasion when it proposes to issue any such tickets, the complainant sued out this appeal, assigning the following errors:

'(1) The court erred in refusing to grant to complainant the full injunctive relief prayed for in its bill of complaint, viz., an injunction restraining defendants and each of them, his or their agents, servants, employes, assigns, successor or successors, and all others acting for defendants, or any or either of them, and all persons whomsoever, although not named therein, from and after the time when they severally have knowledge of the existence of such injunction, from buying, selling, dealing in or soliciting the purchase or sale of any ticket or tickets, or the return coupons or unused portion thereof, issued by complainant, or by any other railroad company for use over complainant's lines of railways, or any part of them, which, by the terms thereof, are transferable, or from soliciting, advising, encouraging, or procuring any persons, other than the original purchasers of such tickets, to use or attempt to use said tickets for passage on any train or trains of complainant.

'(2) After finding, as it did, that complainant had a right to issue such nontransferable tickets, and that the action of defendants in 'scalping' the same was a wrongful and illegal violation of complainant's right, causing it irreparable injury and entitling it to injunctive relief from a court of equity, the court erred in confining the final injunction to two classes of such tickets, and in refusing to give it such preventive relief by injunction as would be coextensive with the right to be protected and the wrong and injury threatened.

'(3) That the court erred in holding that, in order to protect its right to issue said nontransferable tickets from being violated by defendants through the purchase and sale of the same in violation of the terms of the contract embodied in said tickets, complainant must institute a separate suit for injunction on or before every occasion of the exercise of said right.

'(4) The court erred in failing and refusing to include, in the injunctive relief which it granted by said final decree, the case of 'Winter Tourist Tickets,' which the evidence showed were being issued by complainant and were being wrongfully dealt in or 'scalped' by defendants during the pendency of the suit and at the time of the final decree herein.'

The defendants have sued out a cross-appeal, and assigned the following errors:

'(1) The court erred in assuming, asserting, and maintaining in this cause, jurisdiction, inasmuch as the amount involved was less than the lowest limit of this court's jurisdiction; and the averments of the bill were fictitious, fraudulent, and colorable, and made for the purpose solely of seizing the jurisdiction of this court.

'(2) That for the cause of complaint, if any exists, as recited in the bill, the complainant has a complete and adequate remedy at law, and cannot, upon recitals of fact traversed by the answer, invoke the equity jurisdiction of the United States Circuit Courts.

'(3) That it is not competent, nor within the power and authority of a chancellor, or of the Circuit Court of the United States, to establish a rule of civil conduct, and, by its judgment and decree, control in advance those who are charged with being about to breach it, and subjecting them to punishment by contempt process, thereby exercising legislative authority and usurping the functions of a co-ordinate department of the government.

'(4) That the right to deal and traffic in railroad tickets, as brokers, is an inalienable right, that being, under the declared policy of the state of Louisiana, a legitimate business; and that any attempt, upon the part of the United States courts by writ of injunction, to deny them the right to conduct the business of ticket brokers, is in violation of the fifth amendment of the Constitution, which guaranties to every citizen protection in the enjoyment of his life, liberty, and property, and of which he cannot be deprived without due process of law.

'(5) That under the bill and answer, in the absence of proof, the case should have been determined as upon the bill and answer; defendants' answer meeting and traversing all the equities of the bill.

'(6) That the court erred in perpetuating the injunction issued at the times recited in the motion, after its jurisdiction had been by plea and answer challenged, and there was no proof of injury to the complainant.

'(7) That the court refused on final hearing to pass upon the plea to its jurisdiction, and the record fails to show from the evidence administered that any injury whatever was suffered by the complainant by any acts complained of as against these defendants.'

Article 1 of the bill of complaint sets forth the organization of complainant under the laws of Kentucky, and its citizenship of that state; its ownership and operation of an extensive system of railways traversing nine states; its connections with other railroads, whereby it reaches all points in the United States, Canada, and Mexico, and transports large numbers of passengers to all parts of the United States, as well as to foreign countries.

Article 2 states that defendants are citizens of the state of Louisiana, and inhabitants of the Eastern district thereof, and are each what is known as a ticket broker, or 'scalper,' and engaged in the business of buying and selling the unused portions of railroad passenger tickets, especially excursion or special rate tickets issued on occasions of fairs, expositions, conventions and the like; and that defendants have been joined in the suit because their business and transactions complained of are in act, purpose, and effect identical, and in order to prevent a multiplicity of suits, the same relief being sought as to each and all of them.

Article 3, 4, 5, 6, 7, and 8 relates especially to the United Confederate Veterans' Reunion then about to be held in the city of New Orleans. The bill showed the nature of such annual reunions, the immense attendance thereat, the extensive preparations and arrangements being made thereof the necessity for special reduced rates of fare to secure a large attendance, complainant's consent, at the request of a local committee of arrangement, to make special rates and to issue special excursion tickets to those desiring to attend the reunion, amounting to a less charge for the trip to New Orleans and return than the regular lawful and reasonable charge one way to New Orleans; the result being that all desiring to attend the reunion and agreeing to observe the conditions attached to the tickets would be carried to New Orleans and return at a cost equivalent to one cent per mile, while the regular rate, except...