VAUGHT, District Judge.
This is an action to enjoin and restrain the defendant from taking, or otherwise appropriating to his own use, railroad track material leased to him by the plaintiff, and for a mandatory injunction requiring the defendant to return such material already taken and appropriated by him, and deliver same back to the plaintiff on board its cars at Supply, Oklahoma.
The action grows out of three contracts wherein the plaintiff sold certain railroad track materials and leased other such materials to the defendant for spur tracks used in connection with the construction of a dam by the defendant on Wolf Creek near Fort Supply, Oklahoma, for the United States Government.
The first contract, dated August 17, 1940, after providing for the sale of certain material used in the construction of the spur track in question and for relieving the first party, the railroad company, from any liability in the operation of said spur track, provided as follows:
"Likewise for use in the construction of that portion of said trackage to be constructed by Second Party as aforesaid, but for no other purpose whatsoever, First Party will lease to Second Party, delivered on cars at Supply, Oklahoma, the material, consisting of rails, switch stands, switches, frogs, joints, angle bars, and tie plates, of the quantities and of the agreed unit values shown on said schedule Exhibit `B' as material to be leased by First Party to Second Party. Second Party will pay to First Party, annually in advance, as rent for the use of said leased material, a sum equal to six per cent. on said agreed value as shown on said schedule Exhibit `B', said rent to run from the date of delivery to Second Party of said material.
"Upon the expiration or any termination of this agreement Second Party will take up said leased material and redeliver the same to First Party loaded on cars at Supply, Oklahoma, and if there shall be any shortage of said material, or any diminution in value in excess of ordinary wear and tear not capable of offset by proper current maintenance, Second Party will make good such shortage or diminution in value on the basis of the agreed value shown on said schedule Exhibit `B'."
The schedule exhibit "B" specifies the quantities of said material, the unit cost, and the total cost thereof.
On March 7, 1941, a supplemental agreement was entered into between the parties, having reference, however, only to certain of the material sold to the defendant. On April 26, 1941, a second supplemental agreement was entered into by and between the same parties, having to do with additional material leased to the defendant for the construction of additional spur tracks, to which attached exhibit "B" describing the items, the quantity, the unit cost and the total cost of each item.
The complaint alleges:
"That said construction work to be done by said defendant at Supply, Oklahoma, under his said contract with the United States has been nearly completed, and plaintiff's said contracts with him are, therefore, now practically terminated by the terms thereof, but that although plaintiff has made demands on the defendant for return of said track material so leased to him, in compliance with the terms of said contract, that defendant has failed and refused to return same, but has taken up a portion of the railroad rail, angle bars, and other track material, and trucked same away from said location, and has threatened to appropriate it to his own use, and has notified plaintiff that he will do so, and that he intends to appropriate to his own use about one-half of said track material so leased and loaned to him.
"Plaintiff states that it has need of said track material in connection with the maintenance and operation of its road as a common carrier of state and interstate commerce, including transportation of War Material for the United States and serving the War material plants located along its lines, and will shortly have need for said material in connection with the construction of trackage for further proposed War material plants by the United States along its lines near McAlester, and Frederick, Oklahoma, and Reedville, Texas."
The plaintiff further alleges that:
"* * * defendant's action in so taking said material is in violation of Amendment No. 1 to Limitation Order L-88, issued May 18, 1942, by United States Director of Industry Operations, J. S. Knowlson, pursuant to Title 32, National Defense, Chapter IX, War Production Board, Subchapter B, Division of Industry Operations, Part 1170, relating to used rail and used rail joints, Section 1170.1, (b), Paragraph (c) (2) of which reads as follows:
"`On and after the effective date of this Order, no person shall sell, transfer, or otherwise dispose of any Used Rail of relayer grade, reroll grade, or scrap grade, unless and until authorization for such sale, transfer, or other disposition shall have been obtained from the Director of Industry Operations; provided that nothing in this paragraph (c) (2) shall prevent any such person from using such Used Rail in his own tracks, or from selling, transferring, or otherwise disposing of not more than ten tons of Used Rail during any calendar month.'
"Plaintiff further states and shows to the court that because of the prohibition contained in said above quoted order this plaintiff cannot, if it so desire, sell, transfer, or otherwise dispose of said track material to defendant, which would be a violation of said order. Plaintiff further states that it has no adequate remedy at law, but only in equity by injunction."
The defendant has filed his motion to dismiss alleging that the allegations contained in the complaint are insufficient to entitle the plaintiff to the relief prayed for.
The matter was set for hearing on the defendant's motion to dismiss and the plaintiff's application for a temporary injunction, and evidence was introduced in support of the allegations of the complaint.
The defendant contends, under his motion to dismiss, that the plaintiff has a plain and adequate remedy at law and, therefore, is not entitled to injunctive relief. This contention will be considered first.
Section 267 of the Judicial Code, 28 U. S.C.A. § 384, is as follows: "Suits in equity, when not sustainable. Suits in equity shall not be sustained in any court of the United States in any case where a plain, adequate, and complete remedy may be had at law."
The District Court for the Eastern District of Missouri, in Hagerhorst v. Indemnity Ins. Co. of North America, 30 F.Supp. 152, 153, said: "The provision of the statute that suits in equity shall not be sustained in any court of the United States in any case where a plain, adequate, and complete remedy may be had at law, is jurisdictional."
In Singer Sewing Machine Co. v. Benedict, 229 U.S. 481, 33 S.Ct. 942, 57 L.Ed. 1288, that court said: "In the courts of the United States it is a guiding rule that a bill in equity does not lie in any case where a plain, adequate, and complete remedy may be had at law. The statute so declares, Rev.Stat., § 723 28 U.S.C.A. § 384, and the decisions enforcing it are without number. If it be quite obvious that there is such a remedy, it is the duty of the court to interpose the objection sua sponte, and in other cases it is treated as waived if not presented by the defendant in limine. Reynes v. Dumont, 130 U.S. 354, 395, 9 S.Ct. 486, 32 L.Ed. 934, 945; Allen v. Pullman's Palace Car Co., 139 U. S. 658, 11 S.Ct. 682, 35 L.Ed. 303. There was no waiver here. The objection was made by the demurrer and again by the answer; and so, if it was well grounded, it was as available to the defendants in the Circuit Court of Appeals to prevent a decree against them there as it was in the Circuit Court. Boise Artesian Hot & Cold Water Co. v. Boise City, 213 U.S. 276, 29 S.Ct. 426, 53 L.Ed. 796."
In Northern Pac. R. Co. v. Van Dusen Harrington Co., 245 F. 454, 457, the Eighth Circuit Court of Appeals, in construing this section of the code, said:
"We think it can be safely said that it means at least that the courts have not the power to dispense with the ancient rule of equity jurisdiction which prohibits suits in equity where a plain, adequate, and complete remedy may be had at law. An inspection of the complaint fails to disclose a single ground of equitable jurisdiction. Reduced to its lowest terms, the complaint charges that the appellant is in possession of a carload of wheat belonging to appellee, which it refuses to transport to Evansville, Ind. The real nature of the case cannot be disguised by the fact that appellee is simply demanding the issuance of a bill of lading, for the reason that the bill of lading, once issued, would oblige the appellant to transport the car of wheat. It cannot be disputed but that an action at law for damages is a complete and adequate remedy for the refusal by a common carrier to transport a single carload of wheat. The damages to be recovered are easily ascertainable, and in the present case would be the difference between the value of the wheat at Minneapolis and at Evansville, Ind., less expense of carriage. People v. New York, etc., R. Co., 22 Hun. (N.Y.) 533."
In Jones v. MacKenzie, 8 Cir., 122 F. 390, 392, the defendants claimed title to certain railroad ties through a sale made under a chattel mortgage, and also claimed to be in possession thereof, though the ties were piled on the land of a third person. An action of replevin was brought against the defendants in a federal court to recover the ties, and they were seized by the marshal, but were delivered into the possession of the defendants on their giving the statutory bond...
