207 U.S. 205 (1907), 34, Bitterman v. Louisville and Nashville Railroad Company

Docket Nº:No. 34
Citation:207 U.S. 205, 28 S.Ct. 91, 52 L.Ed. 171
Party Name:Bitterman v. Louisville and Nashville Railroad Company
Case Date:December 02, 1907
Court:United States Supreme Court

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207 U.S. 205 (1907)

28 S.Ct. 91, 52 L.Ed. 171



Louisville and Nashville Railroad Company

No. 34

United States Supreme Court

December 2, 1907

Argued November 4, 1907




Railroad companies have the right to sell nontransferable reduced rate excursion tickets, Mosher v. Railroad Co., 127 U.S. 390, and the nontransferability and forfeiture embodied in such ticket is not only binding upon the original purchaser and anyone subsequently acquiring them, but, under the provisions of § 22 of the Act to Regulate Commerce, 24 Stat. 387, 25 Stat. 862, it is the duty of the railroad company to prevent the wrongful use of such tickets and the obtaining of a preference thereby by anyone other than the original purchaser.

An actionable wrong is committed by one who maliciously interferes in a contract between two parties and induces one of them to break that contract to the injury of the other, Angle v. Chicago & St. Paul Railway Co., 151 U.S. 1, and this principle applies to carrying on the business of purchasing and selling nontransferable reduced rate railroad tickets for profit, to the injury of the railroad company issuing them, and this even though the ingredient of actual malice, in the sense of personal ill will, does not exist.

When, as in this case, the dealing of a class of speculators in nontransferable

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tickets have assumed great magnitude, involving large cost and risk to the railroad company in preventing the wrongful use of such tickets, and the parties so dealing in them have expressly declared their intention of continuing so to do, a court of equity has power to grant relief by injunction.

Every injunction contemplates the enforcement, as against the party enjoined, of a rule of conduct for the future as to the wrongs to which the injunction relates, and a court of equity may extend an injunction so as to restrain the defendants from dealing not only in nontransferable tickets already issued by complainant, but also in all tickets of a similar nature which shall be issued in the future, and the issuing of such an injunction does not amount to an exercise of legislative, as distinct from judicial, power and a denial of due process of law.

Whether the jurisdictional amount is involved is to be determined not by the mere pecuniary damage resulting from the acts complained of, but also by the value of the business to be protected and the rights of property which complainants seek to have recognized and enforced. Hunt v. New York Cotton Exchange, 205 U.S. 322.

Where defendants do not formally plead to the jurisdiction, it is not incumbent upon complainant to offer proof in support of the averment that the amount involved exceeds the jurisdictional amount as to each defendant.

No adequate remedy at law exists to redress the wrong done to a railroad company by wrongfully dealing in vast numbers of its nontransferable reduced rate excursion tickets which will deprive the company of its right to resort to equity to restrain such wrong dealings.

An action against a number of defendants is not open to the objections of multifariousness and of misjoinder of parties if the defendants' acts are of a like character, the operation and effect whereof upon the rights of complainants are identical and in which the same relief is sought against all defendants, and the defenses to be interposed are necessarily common to all defendants and involve the same legal questions. Hale v. Allinson, 188 U.S. 56, 77.

144 F. 34 affirmed.

Upon a bill filed on behalf of the Louisville & Nashville Railroad Company, the Circuit Court of the United States for the Eastern District of Louisiana entered a decree perpetually enjoining the petitioners herein and four other ticket brokers, engaged in business in the City of New Orleans, from dealing in nontransferable round-trip tickets issued at reduced rates for passage over the lines of railway of the complainant on account of the United Confederate Veterans' Reunion and the Mardi-Gras celebration held in the City of New Orleans in the

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years 1903 and 1904, respectively. On an appeal prosecuted by the railroad company complaining of the limited relief awarded, the circuit court of appeals held that the defendants should also be enjoined generally from dealing in nontransferable round-trip reduced-rate tickets whenever issued by the complainant, and [28 S.Ct. 93] ordered the cause to be remanded to the circuit court with directions to enter a decree in accordance with the views expressed in the opinion. 144 F. 34. A writ of certiorari was thereupon allowed.

We summarize the averments of the complaint and answer. It was averred in the bill that complainant was a Kentucky corporation, operating about 3,000 miles of railway for the carriage of passengers, baggage, mail, express, and freight, its lines of road extending from New Orleans through various states, and making connections by which it reached all railroad stations in the United States, Canada, and Mexico. The seven persons named as defendants were averred to be citizens and residents of Louisiana, each engaged in the City of New Orleans as a ticket broker or scalper in the business of buying and selling the unused return portions of railroad passenger tickets, especially excursion or special rate tickets issued on occasions of fairs, expositions, conventions, and the like. It was further averred that the defendants were joined in the bill

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.

Six articles or paragraphs of the bill related to an approaching reunion of United Confederate Veterans to be held in the City of New Orleans, which it was expected would necessitate the transportation by the railroads entering New Orleans of 100,000 visitors, one-fourth of which number would pass over the lines of railway of the complainant. A necessity was alleged to exist for special reduced rates of fare to secure a large attendance at such reunion, and it was averred that a rate of one cent a mile, one-third the regular rate, had

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been agreed upon for nontransferable round-trip, reduced-rate tickets which were to be issued for the occasion, and it was stated

that, among the conditions on the face of said ticket, which ticket contract is signed by the original purchaser and the company, is one that said ticket is nontransferable, and, if presented by any other than the original purchaser, who is required to sign the same at date of purchase, it will not be honored, but will be forfeited, and any agent or conductor of any of the lines over which it reads shall have the right to take up and cancel the entire ticket.

And, for various alleged reasons, based mainly upon the large number of expected purchasers, it was averred that the return portion of each ticket was not required to be signed by the original purchaser or presented to an agent of the complainant in the City of New Orleans for the purpose of the identifications of the holder as the purchaser of the ticket.

It was averred that each defendant was accustomed to buy and sell the return coupons of nontransferable tickets for the express purpose, and no other, of putting them in the hands of purchasers, to be fraudulently used for passage on the trains of complainant, and it was further averred that the defendants intended in like manner to fraudulently deal in the return portion of the tickets about to be issued for the reunion in question, and that complainant would sustain irreparable injury, for which it would have no adequate remedy at law, unless it was protected from such wrongful acts. It was further averred that, unless relief was given, the complainant would be compelled to abandon the making of reduced rates for conventions or other assemblies to be held in the City of New Orleans. Averments were also made as to the additional burden which would be cast upon complainant's conductors and train collectors by reason of the practice complained of, the danger which would arise of a multiplicity of suits for damages by reason of errors of such employees in endeavoring to prevent the fraudulent use of such tickets, and it was averred that it would be impossible, in many instances,

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to discover the persons who were wrongfully traveling upon the tickets and who were bound to pay the lawful and reasonable one-way rate for their transportation. The impossibility of securing evidence establishing the facts as to said fraud, the necessity, if such evidence could be obtained, of bringing a multiplicity of suits if a remedy at law was availed of, and the impracticability of estimating in dollars and cents the injury to its business, was set forth as making the remedy at law inadequate, and in addition it was charged that the defendants were financially irresponsible. The existence was also averred of various ticket brokers' associations, the members of which acted in concert. It was averred that a large part of the stock in trade of all ticket brokers and scalpers was the disposal of nontransferable railroad tickets, and it was further averred that ticket brokers and scalpers usually sought to avoid injunctions prohibiting the dealing in such tickets by assigning their business to some other ticket broker not named in the order, and it was averred that, in order to afford complete and effective relief,

the restraining injunctive orders should be broad enough to include all who knowingly do what the order of court prohibits defendants from doing, or who aid or abet defendants in violating the injunction or in defeating the objects...

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