Vonnegut Machinery Co. v. Toledo Machine & Tool Co.

• Decision Date: 07 February 1920
• Docket Number: 235.
• Parties: VONNEGUT MACHINERY CO. v. TOLEDO MACHINE & TOOL CO. et al.
• Court: U.S. District Court — Northern District of Ohio

263 F. 192

VONNEGUT MACHINERY CO. v. TOLEDO MACHINE & TOOL CO. et al.

No. 235.

United States District Court, N.D. Ohio, Western Division.

February 7, 1920

Richard D. Logan, of Toledo, Ohio, for complainant.

Marshall & Fraser, of Toledo, Ohio, for defendant Toledo Machine &amp Tool Co.

Rob V Phillips, of Toledo, Ohio, for union and labor defendants.

KILLITS District Judge.

The complainant, an Indiana corporation, began this action by filing, January 16, a bill against the Toledo Machine & Tool Company, an Ohio corporation, known herein as the 'defendant company,' and ten individual defendants William Gable and others, who, with John J. Quinlivan and two others, and the Central Labor Union of Toledo and Toledo Lodge No. 105, International Association of Machinists additional defendants brought in by an amended bill of complaint, filed January 21, before answer, will be known as the 'labor defendants.' On the coming in of the amended bill, a motion to the jurisdiction was filed, the grounds being: (1) Insufficient allegation of fact to state a valid cause of action in equity against either of the defendants; (2) want of jurisdiction in this court upon the facts as alleged, either of the subject-matter or of the parties; (3) because the bill is not filed in good faith; (4) because the action is a result of collusion between complainant and the defendant the Toledo Machine & Tool Company; (5) because the amended bill 'does not conform to come within the provisions of the statutes of the United States and of the equity rules governing proceedings' in federal courts. We are not advised by argument as to what is meant by this fifth ground. We do not have in mind any situation to which such objection is pertinent. There is nothing apparent, or even suggestive, on the bill supporting either the third or fourth grounds. Counsel for the labor defendants fail to advise the court on these subjects. The motion should have been and has been overruled on grounds 3, 4, and 5, for want of sufficiency plainly apparent in each instance, when compared with the record.

So far as the first two grounds are concerned, an analysis of the bill shows the same to be not well taken, although we will notice them briefly. Going to the first, the bill not only alleges the existence of jurisdictional amount in controversy, but it proceeds upon the familiar and well-established theory that a right of action exists between one party to a contract and those third parties who are utter strangers to the contract, and who are by their conduct interfering substantially with the execution thereof by the second party thereto. Angle v. Railway, 151 U.S. 1, 14 Sup.Ct. 240, 38 L.Ed. 55; Board of Trade v. Christie, 198 U.S. 236, 25 Sup.Ct. 637, 49 L.Ed. 1031; Mahon v. Guaranty Trust & Safe Deposit Co., 239 F. 266, 270, 152 C.C.A. 254; Annotations to L.R.A. 1917C, 777, and to 11 L.R.A.(N.S.) 202. This right of action exists against such third parties, even though there may be an adequate remedy at law in behalf of the first party to the contract against the second party for nonperformance. The first party should not be restricted to the inconvenience of the pursuit of a legal remedy against his contractor whose default is occasioned by third parties, strangers to the contract, who illegally obstruct its execution. Their wrongdoing may be the subject of equitable cognizance.

As to the second ground, so much thereof as relates to the sufficiency of fact to create jurisdiction in this court is answered by what we have already said touching the first ground, adding the suggestion that complainant is a nonresident of this district while all the defendants are residents herein. As we are left without advice by any argument from counsel of labor defendants as to what is the alleged vice of the amended complaint respecting parties, we can only surmise that it is thought that there is apparent upon the bill an inconsistent alignment upon the assumption that the resident defendant the Toledo Machine & Tool Company should be aligned with the complainant, thus destroying our jurisdiction.

In this respect this case closely parallels that of Dail-Overland Co. v. Willys-Overland, Inc., et al., 263 F. 171, recently concluded in this court. To the extent that the facts are analogous we apply our conclusions in that case. The authorities discussed in the opinion in that case (handed down December 27, 1919) on the subject of alignment of parties are applicable here, and there is no need to enlarge this memorandum by repeating that discussion. We cite the authorities: On the adequacy of relief at law, Walla Walla v. Walla Walla Water Co., 172 U.S. 1, 12, 19 Sup.Ct. 77, 43 L.Ed. 341, Kilbourn v. Sunderland, 130 U.S. 505, 514, 9 Sup.Ct. 594, 32 L.Ed. 1005, and Tylor v. Savage, 143 U.S. 79, 95, 12 Sup.Ct. 340, 36 L.Ed. 82, to which may be added Angle v. Chicago, St. P., M. & O. Ry. Co., 151 U.S. 1, 25, 14 Sup.Ct. 240, 38 L.Ed. 55. On necessity of the defendant company as a party, Brown v. Denver Omnibus & Cab Co., 254 F. 560, 166 C.C.A. 118. On the criteria which determine the question of alignment of the principals to the contract affected by the unlawful conduct of the stranger parties, Hamer v. New York Ry. Co., 244 U.S. 266, 37 Sup.Ct. 511, 61 L.Ed. 1125, City of Dawson v. Columbia Trust Co., 197 U.S. 178, 25 Sup.Ct. 420, 49 L.Ed. 113, Mahon v. Guaranty Trust & Security Co., 239 F. 266, 152 C.C.A. 254, and West v. United States, 258 F. 413, . . . C.C.A. . . ., which cases we distinguish from the instant case, as well as from the Overland Case, and Carroll v. Chesapeake & O. Agency Co., 124 F. 305, 312, 61 C.C.A. 49, Carter v. Fortney (C.C.) 170 F. 463, and Iron Molders' Union v. Niles-Bement-Pond, 258 F. 413, . . . C.C.A. . . . . These authorities were considered in the Overland Case, and they are applied here.

The complainant alleges that it has contracts for the construction of machinery by the defendant company involving over $200,000, to be executed at expiration dates which are now respectively more than four months old; that the delay in execution is producing distinct damages to complainant and its customers; that the products to be manufactured are machines covered by patents owned by defendant company, and that licensees would be unable to prepare for the manufacture of those ordered within any reasonable time, to the accruing irreparable damage of the complainant and its customers; that the only reason given by defendant company for its default upon these contracts is that the full control of its business has been interfered with by the unlawful conduct of the labor defendants and their associates, who are, it is alleged in the bill, conspiring to unlawfully interfere with defendant's business in execution of which conspiracy they are picketing the defendant company's plant, intimidating and abusing its employes, and thereby not only greatly interfering with the output of the defendant company with its present force of employes, but preventing defendant company from enlarging its working force to meet the demands of its engagements; that the picketing in question is not carried on in the interest of any employes of the defendant company, and that no labor dispute exists between the labor defendants in this case or parties whom they represent and the defendant company; that the defendant company has not taken, and refuses to take, any steps to secure the protection of the authorities of Ohio to preserve its lawful business from unlawful molestation; that the machinery which is the subject-matter of complainant's contracts with the defendant company is to be manufactured to be delivered in interstate commerce to beneficiaries under these contracts who are respectively beyond the state of Ohio; and that the labor defendants are engaging in a conspiracy to interfere with interstate commerce through intimidation of the employes of the defendant company and those seeking to enter its employment.

The prayer is for a mandatory injunction against the defendant company compelling it to execute these contracts and to protect itself in that behalf by resort to those agencies of protection to which it is entitled to appeal, and for an order against the labor defendants and all parties colluding and in sympathy with them, restraining a continuance of picketing and the pursuit of the alleged conspiracies while the latter is engaged upon the execution of complainant's contracts. A temporary restraining order was allowed after notice and upon testimony, since which time the record has been enlarged by the filing of an answer and cross-bill of the Toledo Machine & Tool Company and joint and several answers to the pleadings of plaintiff and of the defendant company have been filed in behalf of all of the labor defendants. These pleadings are considered now as affidavits, only, upon the motion for a temporary injunction, so far as they aver affirmative matters of fact. Considering for all purposes, however, the answer and cross-bill of the defendant company, we see no reason to sympathize with the continued notion of the labor defendants that the action is collusive between the defendant company and the complainant. In the Overland Case, upon the authority of Venner v. Railroad Co., 209 U.S. 24, 32, 28 Sup.Ct. 328, 52 L.Ed. 666, we said:

'The fact that the Overland should be satisfied to enjoy the relief coming to it, if its contractor should invoke the successful operation of a federal court's protective power, is not enough to charge it with collusion with the latter in bringing this action, or even to require it to be aligned with the latter.'

This observation is equally applicable to the situation here, and the coming in of its answer and cross-bill does not make it a...