Gray v. South & N.R. Co.

• Decision Date: 14 June 1906
• Citation: 151 Ala. 215,43 So. 859
• Parties: GRAY ET AL. v. SOUTH & N. R. CO. ET AL.
• Court: Alabama Supreme Court

43 So. 859

151 Ala. 215

GRAY ET AL. v. SOUTH & N. R. CO. ET AL.

Supreme Court of Alabama

June 14, 1906

Rehearing Denied May 6, 1907.

Appeal from City Court of Montgomery; A. D. Sayre, Judge.

Suit by Henry B. Gray and others against the South & North Railroad Company and others. From a decree denying an application to dismiss the bill for want of equity, defendants appeal; and from an order denying an application to appoint a receiver complainants appeal. Affirmed on complainants' appeal and reversed and rendered on defendants' appeal.

Henry B. Gray and other minority stockholders in the South & North Railroad filed a bill in the city court of Montgomery asking for an accounting between the South & North Railroad Company and the Louisville & Nashville Railroad Company, the lessee of the South & North Company, and for an injunction restraining the directors of the South & North Company from prosecuting a bill in the Jefferson chancery court seeking an accounting between the South & North Company and the Louisville & Nashville Railroad Company. It appears from the bill that the directors of the South & North Company, at the instance of Gray and others, filed their bill in the Jefferson chancery court for an accounting against the Louisville & Nashville Railroad Company under the lease, and that cause was still pending and being prosecuted. The reasons assigned in the bill for enjoining this proceeding in the Jefferson chancery court were that the directors of the South & North Company were inimical to the interest of the minority stockholders, and that they would not prosecute said suit in the Jefferson chancery court to effect, would not properly protect the interest of the minority stockholders and that the suit was really collusive action between the two roads. The bill also sought to have the court appoint a receiver for the South & North Railroad Company, alleging mismanagement and other things on a part of the Louisville & Nashville Railroad Company. Demurrers were interposed to the bill, raising the question that the bill showed on its face that this court was without jurisdiction to entertain the bill for an accounting or for an injunction, as the Jefferson chancery court had acquired jurisdiction and had full powers to adjudicate all matters of differences between them. The chancellor overruled the demurrers, declined to dismiss the bill for want of equity, and enjoined other proceedings by the South & North officers, directors, or agents in the Jefferson chancery court, but declined to appoint a receiver. From the decree overruling the demurrers, and refusing to dismiss the bill, and granting the injunction, the respondents appeal. From the decree declining to appoint a receiver, the complainants appeal.

Gregory L. Smith, Tillman, Grub, Bradley & Morrow, and George W. Jones, for appellant Louisville & Nashville Railroad Company. Fred S. Ball, for appellant South & North Railroad Company. Phares Coleman and S. H. Dent, Jr., for appellees.

ANDERSON J.

The original bill in the case at bar was filed primarily for an accounting between the two companies, by the complainant Gray, a minority stockholder, in the South & North Company, and who also prays for a receiver, and for an injunction restraining the directors from proceeding with the prosecution of a bill heretofore filed by them for the South & North Company in the Jefferson chancery court, seeking an accounting between the two companies, as well as a sale of the South & North Railroad Company to the Louisville & Nashville Railroad Company. The South & North Company moved to dissolve the injunction against its "officers, directors," etc., which seeks to restrain them from further prosecuting the case in the Jefferson chancery court, "because there is no equity in the bill, in so far as it prays such injunction," and seeks by this appeal to review the action of the judge of the city court in refusing its motion.

If the allegations of the bill are not sufficient to warrant the interference by injunction, the injunction may be dissolved for want of equity in that respect, although the bill may be retained for other relief. Norris v. Norris, 27 Ala. 519; Harrison v. McCrary, 37 Ala. 688. The original bill in the case at bar shows upon its face the Jefferson county bill and the filing thereof, and that it was filed in response to a demand made upon the directors of the South & North Company by Henry B. Gray. It is to be observed that the chancery court of Jefferson county had acquired jurisdiction of the subject-matter of the present suit and of all prima facie proper parties necessary to an accounting. It is true the complainant Gray was not a party to the Jefferson county case, as the suit was properly instituted by the directors in the name of the South & North Railroad Company, which is the proper party complainant. It could not be maintained by a stockholder, except under certain conditions, which will be hereafter discussed and considered.

It must be further observed that the Jefferson county chancery court has co-ordinate jurisdiction with the Montgomery city court and is competent to grant all equitable relief obtainable in said city court. When the jurisdiction of the chancery court has once attached, its jurisdiction will not be disturbed by that of another court of equal powers. Troy Co. v. Prestwood, 116 Ala. 119, 22 So. 262. "It is an admitted principle that, where two courts have an equal and concurrent jurisdiction, the one that commences the exercise of its jurisdiction first has the preference, and is not to be obstructed in the legitimate exercise of its powers by the court that, on the subject-matter, would be only co-ordinate." Eaton v. Patterson, 2 Stew. & P. 15. "The well-established rule is that, in cases where two courts have concurrent jurisdiction, the court which first takes cognizance of the cause retains it to the exclusion of the other." King v. Smith, 15 Ala. 269. "It may be conceded as a general rule that, where two courts have concurrent jurisdiction over the same thing, the one which first possesses the cause has a right to proceed with it, and cannot be prohibited or restrained by any other." Nelson v. Dunn, 15 Ala. 514. "The law is too well settled to be questioned that, where two courts have concurrent jurisdiction, that which first takes cognizance of the cause has the right to retain it to the exclusion of the other." Gould v. Hayes, 19 Ala. 438; Gay v. Brierfield, 94 Ala. 308. ^[1] "When different courts have concurrent jurisdiction, the one before whom proceeding may be first had, and whose jurisdiction first attaches, must necessarily have authority paramount to the other courts, or, rather, the action first commenced shall not be abated by an action commenced between the same parties, in relation to the same subject, in the same or any other court." Stearns v. Stearns, 16 Mass. 171. "It is the adoption of law too long established to require a citation of authorities that, where a court has jurisdiction, it has a right to decide every question which occurs in the cause, * * * and that, where the jurisdiction of the court and the right of a plaintiff to prosecute his suit in it have once attached, that right cannot be arrested or taken away by proceedings in another court. These rules have their foundation, not merely in comity, but on necessity; for if one may enjoin, the other may retort by injunction, and thus the parties be without remedy, being liable for a process for contempt in one if they dare to proceed in the other. * * * The fact therefore, that an injunction issues only to the parties before the court, and not to the court, is no evasion of the difficulties that are the necessary result of an attempt to exercise that power over a party who is a litigant in another and independent forum." Peck v. Jenness, 7 How. (U. S.) 624; 12 L.Ed. 846. "Where one of two courts of co-ordinate jurisdiction and powers has obtained jurisdiction of a cause, it should retain it until finally disposed of; and, although both courts may have authority to grant injunctions, yet if one tribunal, properly having cognizance of the case, has exercised its jurisdiction, the other could refuse to interfere. * * * Nor will the prosecution of a suit in one court be enjoined by a court of co-ordinate jurisdiction, when the former tribunal may afford adequate relief." High on Injunctions (3d Ed.) § 15. "While courts of equity, as is thus shown, are averse to permitting their jurisdiction, when it has once attached, to be usurped by other tribunals, they will not, upon the other hand, interfere with proceedings in other courts of competent jurisdiction which have first acquired control over the subject-matter of the controversy." High on Injunctions (3d Ed.) § 50. "It is the settled law of this state that the prosecution of a suit in one court cannot be enjoined by another court of co-ordinate jurisdiction. Exceptions to this rule have been suggested, in case the court in which the proceedings sought to be enjoined are pending cannot afford adequate relief." Wilson v. Baker, 64 Cal. 476, 2 P. 253. "The principle * * * is properly stated * * * that the court which first takes cognizance of the controversy is entitled to retain jurisdiction to the end of the litigation, and incidentally to take the possession or control of the res, the subject-matter of the controversy, to the exclusion of all interference from other courts of concurrent jurisdiction, and that the proper application of this principle does not require that the court which first takes jurisdiction of the controversy shall also first take the actual possession of the thing in controversy. * * * We think * * * that the only safe rule to follow * * * is that the court which first takes...