Nashville, C. & St. L. Ry. Co. v. McConnell

• Citation: 82 F. 65
• Parties: NASHVILLE, C. & ST. L. RY. CO. v. McCONNELL et al. LOUISVILLE & N. RY. CO. v. DUCKWORTH et al. WESTERN & A. RY. CO. v. SAME.
• Decision Date: 19 August 1897
• Court: U.S. District Court — Middle District of Tennessee

82 F. 65

NASHVILLE, C. & ST. L. RY. CO. v. McCONNELL et al. LOUISVILLE & N. RY. CO. v. DUCKWORTH et al. WESTERN & A. RY. CO. v. SAME. ^[1]

United States Circuit Court, M.D. Tennessee.

August 19, 1897

W. L Granbery, for Nashville, C. & St. L. Ry. Co. and Western & A. Ry. co.

J. M Dickinson and Smith & Maddin, for Louisville & N. Ry. Co.

J. H Acklen, Pitts & Meeks, and Lellyett & Barr, for brokers.

CLARK District Judge.

A restraining order was heretofore allowed on the bills in these cases, and they are now before the court on application for preliminary injunctions upon the pleadings and proofs offered to support and oppose the motion. The cases are heard together for convenience, the proofs being treated as offered in each case, so far as applicable and competent. The remedy now sought, if granted, will constitute a new application of the injunctive process of the courts, so far as I am advised and so far as precisely the facts of this case are concerned. I deem it therefore proper to state the case, and my views in respect thereto, with sufficient fullness that the ruling may be clearly understood.

The suits grow out of what is known as the 'Tennessee Centennial and International Exposition,' now being held at the city of Nashville, Tenn.; the time appointed for keeping open that Exposition being from May 1 to October 31, 1897. In order to aid in the success of this Exposition, and to widely extend its benefits to the public, the leading railroad companies of the country, after some difficulty, were induced to enter into an agreement to issue and sell during the period of said Exposition a special contract ticket, conveniently designated as the 'Tennessee Centennial Ticket.' This is sold as a round-trip ticket only, and at one-third of the regular price at which tickets are sold in the ordinary business of the railroads. So far as the provisions of the contract of transportation affect the matter now under consideration, it is sufficient to say that the contract between the carrier and the passenger is for a round trip, both to and from the Exposition; it being agreed that in consideration of the special reduced rate the ticket issued as evidence of the contract shall not be transferable, and shall become void in the hands of any third party acquiring it in violation of the agreement. The original purchaser is required to sign this contract in the ticket issued, and is further required to identify him or her self before persons known as 'validating agents,' appointed for that purpose at the place of the Exposition. In short, the contract clearly and distinctly provides that all parts of the tickets shall be used only by the original purchaser, and that it shall be valid and good for transportation only in the hands of such purchaser. These provisions are very plain, and very well understood. That special ticket contracts of this kind, restricting the use thereof to the original purchaser, are valid contracts, has not been made a question in the case, and could not be, the authorities being uniform in sustaining such contracts as valid obligations. It is disclosed by the record in the cases that a considerable number of persons, known as 'ticket brokers' or 'ticket scalpers,' are located in the city of Nashville, the place of the Exposition, and engaged in the business of buying and selling the return portion of these tickets, in violation of the contract, and it is to restrain further prosecution of this particular branch of the brokers' business that the bills in these cases are brought. Without going into elaborate detail, it is sufficient to say that it appears that all of the defendants are engaged in buying and selling these special-contract tickets. In conducting their business, many, if not most, of the defendants have persons employed for the purpose of boarding incoming trains at Nashville, and diligently working the passengers with a view to buying the return coupons of these tickets, and also for the purpose of selling, as far as may be done, to such passengers coupons for other points. It does not distinctly appear that others of the defendants go further than to conduct their business at their office, and to deal in these tickets as far as may be done by diligent work at the office directed to this class of tickets. Some of the scalpers in this business are known as 'foreign brokers'; being persons who have come from other states and places to the city of Nashville for the purpose, presumably, of carrying on this business during the period of the Exposition only. The brokers permanently located at Nashville, and there when the Exposition opened, are called, for convenience, 'local brokers,' to distinguish them from these 'foreign brokers.' When these return coupons are purchased, in order to effect a sale thereof, and make them available to subsequent purchasers intending to use them in violation of the contract, it becomes necessary for the scalper or broker to agree with such persons to refund the money paid in the event the fraud is detected, and the ticket therefore cannot be used. It further becomes necessary, of course, for the person purchasing from the broker to go before the validating agents and declare that he is the same person originally purchasing and using such ticket in coming to the Exposition. It is not necessary to add, what is plainly indicated by the situation, that the person using or attempting to use the return coupon makes before the validating agent, solemnly, a deliberate misrepresentation, and practices upon the company, in the event the ticket is used, an obvious fraud. The ticket providing that it shall become void in the hands of any person other than the original purchaser, the ticket is, in law, worthless; and it is obvious enough that the company is damaged and sustains loss to the extent of the full regular fare for the mileage over which each one of these fraudulent coupons is used. There is no process of reasoning, however strained, which can, even as a matter of form, conceal this practical fact, that the company is deliberately cheated out of the value of the regular fare of every mile of its line over which travel is made under color of one of these void papers. It is not necessary to do more than thus state the facts to show to any fair mind that this is clearly the case. It further appears from the record that the purchasers of these tickets from the brokers are carefully instructed by them as to the safest method of making a false identification, in claiming to be the original purchaser, and that in many instances the fraudulent purchaser is accompanied by the broker's agent, and aided in making effectual the imposition. The particular details as to the manner of doing this need not now be stated. In addition to this, it also appears from the mutilated ticket contracts themselves, as well as the testimony in the cases, that by means of pasting parts of different tickets together, by cutting out dates and amounts, and plugging in place thereof false dates and amounts, by taking out the signature of the original purchaser by the use of acids, and by other thoroughly objectionable methods, the most obvious frauds, not to say forgeries, are committed, in order to effectually handle these fraudulently purchased and fraudulently sold coupons. Indeed, the defendants' eminent counsel do not controvert the existence of these methods, and the subject is dismissed with the statement that there are abuses in all lines of business. It is due, just in this connection, as a part of the statement of the case, to say that not all of the defendants are actually engaged in these ruder features of doing business; and it may be justly said that, with one or two exceptions, the business of the local brokers is not conducted in these more offensive methods. It might be regarded as unkind to be more specific just here, by giving names. The fact does remain, however, that the defendants all admit squarely that they are engaged in the business of buying, selling, and causing purchasers to use, these void coupons, with the distinct knowledge and intention that they will use them; and the court finds no difficulty in affirming the existence of the further fact that they aid in accomplishing this result beyond merely buying and selling to purchasers.

The right to make and issue this special form of ticket furnishing a reduced rate, and thereby aiding in a great public purpose such as that of an Exposition, is fully recognized both at common law and by legislation. It has often been decided by the courts that the use of one of these tickets in violation of the contract by a person other than the original purchaser is a fraud upon the common carrier. This is no longer a question. These Centennial tickets having been issued under an agreement between the railroad companies to recognize over their lines such tickets, by whatever common carrier issued, there can be no doubt that every company named in such tickets, and over whose lines these tickets call for transportation, is a party to the contract,-- as much so as the initial carrier issuing the ticket,-- and entitled to the full benefits and subject to the full obligations of the contract, whatever the result of this may be. Whatever relief or redress, therefore, any particular common carrier concerned in one of these tickets may be entitled to at law or in equity is available to such carrier on tickets issued by other carriers as well as those issued by such particular carrier; and the damage sustained by such carrier is not confined to the tickets which it issues, but also extends to tickets to which it is a party in the sense above explained, and the damages which are resulting and may probably result to the carrier are to be...