Quinlivan v. Dail-Overland Co.

Decision Date19 July 1921
Docket Number3434.
Citation274 F. 56
PartiesQUINLIVAN et al. v. DAIL-OVERLAND CO. et al.
CourtU.S. Court of Appeals — Sixth Circuit

[Copyrighted Material Omitted]

Rob V Phillips, of Toledo, Ohio (Daniel L. Cruice, of Chicago Ill., on the brief), for appellants.

George D. Welles, of Toledo, Ohio (F. C. Harding, of Greenville, N.C., and Tracy, Chapman & Welles, of Toledo, Ohio, on the brief), for appellee Dail-Overland Co.

Benjamin T. Batsch, of Toledo, Ohio (James E. Kepperley and Rathbun Fuller, both of Toledo, Ohio, on the brief), for appellee Willys-Overland Co.

Before KNAPPEN, DENISON, and DONAHUE, Circuit Judges.


Appeal from an order granting permanent relief in a strike injunction case. The original bill was filed by the Dail-Overland Company, which is a corporation organized under the laws of North Carolina, is a citizen and resident of that state, and engaged in the distribution and sale of automobiles and automobile parts and equipment. The defendants were (a) the Willys-Overland Company, a corporation organized under the laws of Ohio, a citizen and resident of the Western division of the Northern district of Ohio, and engaged in manufacturing and selling automobiles and automobile parts in that district and division; (b) the Willys-Overland, Incorporated, a corporation organized under the laws of Virginia, a citizen and resident of that state having its principal office and place of business at Toledo, Ohio, and being the organization by which the automobiles and parts manufactured by the Willys-Overland Company were marketed; (c) Toledo Lodge, No. 105, International Association of Machinists, an unincorporated labor union, having its principal place of business at Toledo, Ohio, many of its members being employees of the Willys-Overland Company; (d) the Automobile District Council, an unincorporated association composed of sundry unions and members thereof, whose members are engaged in sundry trades connected with the automobile industry in Toledo, where it has its principal office, many of its members being employees of the Willys-Overland Company; (e) a large number of individuals, including officers of one or the other of the two last-named defendants, and organizers and business agents of different labor unions. For convenience we shall refer to the Willys-Overland Company as the 'Overland,' to the Willys-Overland, Incorporated, as the 'Overland Inc.,' and the Toledo Lodge, the Automobile District Council and the individual defendants as the union and labor defendants. All were residents and citizens either of the district and division in which the suit was begun or of a state other than North Carolina.

The bill, which was filed June 5, 1919, is elaborate in statement; its substance, sufficient for present purposes, is this: The Overland Inc. had a contract with the Overland Company for the purchase from the latter of all of its product manufactured and bought by the latter during the year 1919. Plaintiff had a contract with the Overland Inc. for the purchase during the period from January 4, 1919, to October 31, 1919, of 2,400 Willys-Overland automobiles, subject to allotment during the season on the basis of monthly production, and to ratable reduction in case sufficient automobiles were not manufactured for the Overland Inc. to enable it to meet all its contracts.

The agreement also provided for the purchase of automobile parts at certain discounts. Plaintiff had the sole right to sell and distribute these automobiles and parts in certain counties of North Carolina and South Carolina, respectively. The bill further alleged that shortly before May 8, 1919, certain labor agitators, including the so-called union and labor defendants, entered into an unlawful combination and conspiracy in restraint of trade and commerce in automobiles and automobile parts among the different states of the Union, in furtherance of which they conspired to prevent and restrain all interstate commerce in automobiles and automobile parts manufactured, purchased from and shipped by the Overland Company, and to that end demanded of that company impossible terms and conditions of employment, including closed shop and control by labor organizations; the controversy culminating in a strike at the Overland Company's plant at Toledo, Ohio, on May 8, 1919, its reopening on May 26th, and continued operation until June 3d, when it finally closed because of its inability to continue operation in the face of the strike and in lack of police protection. As the result of the strike plaintiff received but a small portion of its May allotment of automobiles, and none whatever for the month of June. Plaintiff accordingly, when the bill was filed, was entirely sold out of automobiles and short of necessary supplies and parts. Plaintiff had an effective selling organization, maintained at a large monthly expense, a valuable business and good will yielding large profits, which would be lost by the failure to obtain automobiles and parts under its contract. It will be noted that plaintiff had no contract with the Overland Company. In support of its claim to relief, the bill stated that previous to the execution of the contract the Overland Inc. publicly gave out and stated to plaintiff and its other dealers that there would be produced for distribution among such distributors, including plaintiff, in the year 1919, 180,000 automobiles, and (on information and belief) that such statements and representations were made by the Overland Inc. 'with the knowledge and consent of the defendant Willys-Overland Company, and in consequence of and pursuant to representations and statements made by said Willys-Overland to said Willys-Overland Inc. that the defendant the Willys-Overland Company proposed and intended to manufacture during the year 1919 for delivery to said Willys-Overland Inc. at least that number of automobiles. ' The bill alleged that it was the duty of the Overland Company to continue in operation, and a demand by plaintiff that it do so, and its failure to comply. [1] On June 9th, four days after the filing of the original bill, an order was made, after notice to appellants, reciting the inability and failure of the Overland Company to perform 'its contract obligations with complainant' by reason of the riotous, disorderly and intimidating conduct of the union and labor defendants, and enjoining the latter from interfering with the conduct of the business by the Overland Company except by peaceful persuasion. An elaborate system of picketing, under specific limitations, was provided by the order. The next day, by leave of court, the Overland filed its answer and cross-bill, admitting and alleging in detail each of the facts set up in the original bill, and asserting its willingness to continue operation under police protection, excepting, however, the allegation that it could and should have continued in operation, notwithstanding the efforts of the labor and union defendants to close the plant. It also alleged, as another reason for its inability to operate, that the Electric Auto-Lite Corporation (a Delaware corporation), with which it had contracts for starting, lighting, and ignition equipment and otherwise, was unable to comply with its contracts because of a strike against its plant of the same general nature as that directed against the Overland plant. It accordingly asked that the Auto-Lite Corporation be brought in as a party defendant, that it be directed to fill its orders from the Overland Company, and that it be restrained from keeping its factory closed, and ordered to obtain the necessary force of employees to enable it to execute such orders. It also asked for restraint of the labor and union defendants with respect to the Auto-Lite Company strike. On the same day an order was issued restraining interference with the Auto-Lite plant. Two days later, on plaintiff's application, an order was made directing the Overland Company to resume operations, and on its representation of inability to do so, or to comply without protection, the court appointed a special chief officer to take charge of and enforce the opening and operation of the Overland plant and to enforce the restraining order as to both the Overland and Auto-Lite plants. Under this order the Overland and Auto-Lite plants were opened on June 13th, and have remained open and in operation ever since.

A few days later the Overland Inc. filed its answer and cross-bill likewise specifically admitting and averring each of the facts set up in the original bill of complaint, including the alleged public statement of the Overland Inc. regarding the production for the year in question, and plaintiff's information that it was made with the knowledge and consent of the Overland, etc., and praying for restraining order and injunction against the labor and union defendants. The next day the Auto-Lite Corporation filed its answer and cross-bill, admitting and adopting the allegations in the Overland's answer and cross-bill relating to the Auto-Lite Corporation, setting out in great detail the history of the strike directed against its plant, its inability to operate without protection, its failure to receive the same and that it, together with many other manufacturers of automobiles, had exhausted their supplies of electric lighting, starting, and ignition systems, and asking for restraining order and final injunction in substantially the terms contained in the orders relating to the Overland. On July 1st both the original bill and the cross-bill of the Overland Company were taken as confessed by each of the labor and union defendants for lack of plea, answer or demurrer, and on August 2d the cross-bills of the Overland Inc. and the Auto-Lite Company were likewise taken...

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