Division 525, Order of Ry. Conductors of America v. Gorman

• Decision Date: 08 February 1943
• Docket Number: No. 12341.,12341.
• Parties: DIVISION 525, ORDER OF RAILWAY CONDUCTORS OF AMERICA et al. v. GORMAN et al.
• Court: U.S. Court of Appeals — Eighth Circuit

133 F.2d 273 (1943)

DIVISION 525, ORDER OF RAILWAY CONDUCTORS OF AMERICA et al. v. GORMAN et al.

No. 12341.

Circuit Court of Appeals, Eighth Circuit.

February 8, 1943.

Walter L. Brown, of El Dorado, Ark., for appellants.

Bruce E. Dwinell, of Chicago, Ill., and Thomas S. Buzbee, of Little Rock, Ark., for trustees of Chicago, R. I. & P. Ry. Co.

A. F. House, of Little Rock, Ark., and V. C. Shuttleworth, of Cedar Rapids, Iowa, for third party defendant.

Before GARDNER, JOHNSEN, and RIDDICK, Circuit Judges.

GARDNER, Circuit Judge.

This is an appeal from a decree which dismissed appellants' suit by which they sought an injunction against defendants restraining them from violating the terms of a contract alleged to have been executed in their behalf concerning the employment of conductors over a portion of railroad trackage of the Chicago, Rock Island and Pacific Railway Company.

Plaintiffs commenced this suit in the state court against defendants who are trustees in reorganization proceedings of the Chicago, Rock Island and Pacific Railway Company, hereinafter referred to as the Rock Island.

Plaintiff, Division No. 525, Order of Railway Conductors of America, is a unit of the Order of Railway Conductors of America which is a voluntary unincorporated association of railway conductors. Some 27 individual plaintiffs, members of Division No. 525, are conductors employed on the Rock Island. The complaint alleged that the individual plaintiffs are members of Division No. 525, Order of Railway Conductors of America, and were conductors employed on the property of defendants holding priority rights which were secured to them by a contract executed by the Order of Railway Conductors through its central committee; that contrary to the terms and conditions of the contract the defendants are employing conductors from other divisions on the trackage designated as trackage over which they have seniority rights, thus depriving them of the rights to which they are entitled under the provisions of the contract, copy of which was attached to the complaint. It is also alleged that the conduct of defendants in violation of the terms of said contract had caused, and was causing, a loss to plaintiffs "of large sums of money and of their seniority rights over said trackage". They prayed that a writ of injunction be issued restraining defendants from employing conductors in the operation of the trains over the trackage described as 28 miles of track between Haskell and Biddle, and between Haskell and Little Rock, on defendants' lines in Arkansas, in violation of said contract.

The defendant trustees removed the cause to the United States District Court on the ground of diversity of citizenship and on the allegation that the amount and value involved exceeded $3,000. Defendants then answered admitting the execution of the contract as alleged in plaintiffs' complaint but alleged that it had been cancelled. That pursuant to the cancellation of the contract D. P. Neely, J. F. King and J. F. Geister, conductors employed by defendants and members of Division No. 566, Order of Railway Conductors, had been placed on the runs including the 28 miles of trackage in controversy, the said conductors claiming to have seniority rights on said runs. That these three conductors were residents of Arkansas, and that they were placed on said runs pursuant to request of the Order of Railway Conductors. Defendants asked that these conductors be made third party defendants, and that upon hearing the court enter a declaratory judgment defining the rights of all the parties under the rules of the Order of Railway Conductors and the contracts between said Order and the defendants.

By consent of the parties to the suit the court entered an order making D. R. Neely, J. F. King and J. F. Geister third parties defendant. Thereafter plaintiffs filed motion to remand on the grounds that the added parties defendant were residents of the State of Arkansas, and that the issue was in fact between citizens of the State of Arkansas and that the amount in controversy was not in excess of $3,000. At the hearing of this motion it was stipulated "that by having seniority rights over the Haskell-Biddle track in 1940 the Arkansas Division collected in salaries $4152.49 more than it would have collected if seniority rights over the track had belonged to Louisiana (Division)".

The court found that the amount involved was in excess of $3,000; that the court had acquired jurisdiction by reason of diversity of citizenship and, therefore, overruled the motion to remand.

Neely, King and Geister filed an answer in which they alleged that the contract pleaded by the plaintiffs as the basis for their suit had, by the proper authorities, been cancelled. To this answer plaintiffs replied alleging that the purported cancellation of the contract was arbitrary and beyond the power and authority of the officer purporting to cancel the same and was null and void.

On the merits the court held that the contract forming the basis of plaintiffs' action, had been cancelled and thereupon entered decree dismissing plaintiffs' cause of action.

On this appeal plaintiffs challenge (1) the jurisdiction of the court; (2) the correctness of the court's finding and conclusion that the contract sued upon had been legally cancelled.

The jurisdiction of the court is challenged on two grounds: (1) That the amount or value in controversy did not exceed, exclusive of interest and costs, the amount of $3,000. All of the plaintiffs claimed an undivided common interest in the right which they seek to enforce. They did not ask separate judgments and it appears without dispute that the value or amount of the aggregate rights of all the plaintiffs exceeds $3,000. Their claim is bottomed on the pleaded contract and was asserted as an entity. We think the jurisdictional amount was involved. Gibbs v. Buck, 307 U.S. 66, 59 S.Ct. 725, 83 L. Ed. 1111; Troy Bank v. G. A. Whitehead & Co., 222 U.S. 39, 32 S.Ct. 9, 56 L.Ed. 81; Phillips Petroleum Co. v. Taylor, 5 Cir., 115 F.2d 726; Healy v. Ratta, 292 U. S. 263, 267, 54 S.Ct. 700, 78 L.Ed. 1248; Purcell v. Summers, 4 Cir., 126 F.2d 390.

The rule as stated by the Supreme Court in Troy Bank v. Whitehead, supra, is as follows: "When two or more plaintiffs, having separate and distinct demands, unite for convenience and economy in a single suit, it is essential that the demand of each be of the requisite jurisdictional amount; but when several plaintiffs unite to enforce a single title or right, in which they have a common and undivided interest, it is enough if their interests collectively equal the jurisdictional amount."

What is said by the court in Phillips Petroleum Co. v. Taylor is here apposite. It is there said: "The interest of each of the plaintiffs was derived from the same instrument, the assigned mineral lease, and the liability of the defendant, too, was based solely upon it. The uncaptured produce from the mineral lease, recoverable only through the implied covenant, constituted the sole interest of all the plaintiffs; and the concern of the defendant in this suit was not to avoid any separate demand of the plaintiffs, but to escape the liability common to all. The demand was for a lump sum. The appellant was interested in the amount of that sum, and not the division to be made of it between the opposing parties." 115 F.2d 728.

It was stipulated that in 1940 the seniority rights involved were worth $4,152.49. It was also stipulated that with any increase in train traffic the value would be in excess of that amount. Plaintiffs sought in effect to compel defendants to comply with the contract which presumably would remain in force indefinitely, so that there was in controversy not only the value of the seniority rights for one year but for succeeding years. In a suit for an injunction the value to plaintiff of the right which he seeks to protect is the measure for jurisdictional purposes. Plaintiffs rely upon the decision of the Supreme Court in Thomson, Trustee, v. Gaskill et al., 315 U.S. 442, 62 S.Ct. 673, 86 L.Ed. 951. But that decision is not to the contrary. In that case plaintiffs, for convenience and economy, sought to enforce individual rights. They alleged that under certain written contracts which were not attached to the complaint that they were accorded the right to perform certain work and prayed an accounting "and that the amount of work that each of the plaintiffs has been wrongfully deprived of be determined, and that judgment be given each of the plaintiffs for such an amount as he would have earned if his right to perform the work had not been wrongfully denied him". Gaskill v. Thomson, 8 Cir., 119 F.2d 105, 106. In that case a separate judgment for each plaintiff was demanded, while in the instant case it is not claimed that any particular individual is entitled to any particular amount of damages but the claim is that all of the plaintiffs, as members of Division No. 525, have an undivided interest in the contract sued upon and are collectively entitled to an injunction to prevent its breach. We think the jurisdictional amount was in controversy.

The second ground of challenge is that there was not the requisite diversity of citizenship. As originally brought, and at the time of its removal to the Federal Court, it is clear that the controversy was between citizens of different states. On removal, therefore, the Federal Court acquired jurisdiction. It is claimed that this jurisdiction was destroyed by the subsequent action of the court in bringing in parties who were citizens of the State of Arkansas, as parties defendant. Generally speaking there are three classes of parties known as "(1) proper parties; (2) necessary parties; (3) indispensable parties". "Proper" or "formal" parties...