Eureka & K.R.R. Co. v. California & N. Ry. Co.

• Decision Date: 20 August 1900
• Docket Number: 12,919.
• Citation: 103 F. 897
• Court: U.S. District Court — Northern District of California
• Parties: EUREKA & K.R.R. CO. v. CALIFORNIA & N. RY. CO.

103 F. 897

EUREKA & K.R.R. CO. v. CALIFORNIA & N. RY. CO.

No. 12,919.

United States Circuit Court, N.D. California.

August 20, 1900

S. M Buck and C. M. Wheeler, for plaintiff.

J. C Campbell, for defendant.

MORROW Circuit Judge.

This action was brought in the superior court of the state of California for the county of Humboldt by the plaintiff, a California corporation, to enjoin the defendant, a corporation of the state of Nevada, from prosecuting certain condemnation suits in the state court. A temporary restraining order was granted as prayed for. The defendant demurred to the complaint, and at the same time filed a petition for removal of the cause to the federal court on the ground that the controversy was wholly between citizens of different states, and that the matter in dispute exceeded in value the jurisdictional sum. The petition was granted, and the case now comes before this court upon the order to show cause why an injunction should not issue as prayed for in the state court.

The plaintiff alleges that it was incorporated for the purpose of constructing and operating a line of railroad in the county of Humboldt, state of California, among other places, from the town of Arcata, around the east shore of Humboldt Bay, to the city of Eureka; that it has commenced the construction of said line of railroad, and has expended therein about $100,000, and will put said branch line in full operation within a year, unless prevented from so doing. It is alleged that a terminal site has been secured by the plaintiff in the city of Eureka at an expense of $60,000; that it is necessary for the purpose of constructing its railroad to its said depot grounds upon its established lines, to have a right of way over a certain parcel of land lying in the city of Eureka, and for the purpose of obtaining said right the plaintiff on June 30, 1899, commenced an action in the superior court of the state for the county of Humboldt to condemn the property required for said right of way. It is further alleged that during the pendency of said action the defendant, a corporation created for the purpose of constructing and operating a line of railroad from the city of Eureka to Crescent City, in Del Norte county, Cal brought suits in the same court to condemn certain lands, including the identical parcel of land sought to be condemned by the plaintiff. Plaintiff charges that this action is fictitious and not prosecuted in good faith; that the defendant has not commenced the construction of its proposed line of railroad, and in the proceedings for condemnation has conspired with certain parties who are the owners of the land, for the purpose of hindering, delaying, obstructing, and preventing the plaintiff from completing its branch railroad; and irreparable damage to the plaintiff and loss of its franchise are alleged.

It is contended by the defendant that this court has no power or jurisdiction to enjoin the prosecution of actions commenced in the state court, under the inhibition contained in section 720 of the Revised Statutes. This section reads as follows:

'The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a state, except in cases where such injunctions may be authorized by any law relating to proceedings in bankruptcy.'

This prohibition is more particularly directed to cases where suit is instituted in the United States courts for the specific purpose of enjoining an action in the state court. But injunction proceedings commenced in the state court, and removed in the customary manner to the United States court by reason of some inherent right, are governed by the act of March 3, 1875, determining the jurisdiction of United States circuit courts over causes removed from state courts. Section 4 provides:

'That when any suit shall be removed from a state court to a circuit court of the United States, * * * all injunctions, orders, and other proceedings had in such suit prior to its removal, shall remain in full force and effect until dissolved or modified by the court to which such suit shall be so removed.'

The relation of these two statutes to the interference by a United States court with proceedings in a state court is distinctly shown in the case of Bondurant v. Watson, 103 U.S. 281, 287, 26 L.Ed. 447. An injunction was issued by the state court, and the case was thereafter removed to the United States court by the defendant, and the injunction there made perpetual. The decree was appealed from, and claim was made that the case was not removable, because its purpose was to obtain the writ of injunction to stay proceedings in a state court, which a court of the United States is forbidden to grant, by section 720 of the Revised Statutes. The supreme court, speaking upon this contention, said:

'It is to be observed that the injunction had already been granted by the state court before the application for removal was made. The interest and purpose of (the defendant), who asked for the removal, was to get the injunction dissolved. If (the plaintiff) had filed his petition for injunction in the state court, and, before it was allowed, had petitioned for a removal of the cause to the circuit court, with the design of applying to that court for his injunction, the objection to the right of removal would have force. That would have been an evasion of the statute. But that is not this case. The act of March 3, 1875, provides that all injunctions had in the suit before its removal shall remain in full force and effect until dissolved or modified by the court to which the suit shall be removed. It provides for removals without making any exception, of cases in which an injunction has already been allowed to stay proceedings in a state court. It would not be according to the character, whether sworn to or not, in all cases where the statute well-settled rules of statutory construction to import an exception into this statute from a prior one on a different subject.'

A stricter interpretation of section 720 would defeat the purpose of the removal act in many instances, and deprive a party of a remedy in either court. Smith v. Schwed (C.C.) 6 Fed. 458; Perry v. Sharpe (C.C.) 8 Fed. 24.

This court, then, having power to consider the injunctional proceedings, the question arises, upon general principles of equity jurisprudence, should the injunction have been granted originally, and ought it now to be maintained? In this connection it is urged by counsel for defendant that it is not a case for equitable interference for the reason that the plaintiff has a complete and adequate remedy at law. The plaintiff seeks to enjoin the defendant from prosecuting condemnation suits affecting the same parcel of land that the plaintiff is attempting to condemn, and the irreparable injury which the plaintiff claims it will suffer if denied a preventive remedy is the infringement upon and loss of its franchise in said city of Eureka, and consequent loss of the value of work and labor already performed in the construction of railroad along its proposed line. But will this result necessarily follow if the defendant is not restrained from the prosecution of its condemnation suits' The outcome of such suits feared by the plaintiff is that the defendant will obtain a decree adjudging that said parcel of land is necessary for a public use, and that defendant may hold and enjoy it for that purpose, to the exclusion of the plaintiff. The questions here presented are whether the plaintiff shall...