Ambursen Hydraulic Construction Co. v. Northern Contracting Co.

| Ga. | May 13, 1913

Evans, P. J.

(After stating tbe foregoing facts.) The genera] rule is well settled that the pendency of a suit in one State between the same parties and for the same cause of action furnishes no cause to stay or abate a new suit brought in a court of another State. Tarver v. Rankin, 3 Ga. 210; Chattanooga &c. R. Co. v. Jackson, 86 Ga. 676 (13 S.E. 109" court="Ga." date_filed="1891-02-23" href="https://app.midpage.ai/document/chattanooga-rome--columbus-railroad-v-jackson-5564109?utm_source=webapp" opinion_id="5564109">13 S. E. 109). The more common instance of the application of this rule is where the plaintiff in the first suit is also the plaintiff in the second action. The rule, however, is not limited to cases where the plaintiff in both suits is the same person. If each of the parties to a contract claims that the other has breached it, each would be entitled to sue for the breach. The defendant in the first suit could recoup his damages of the plaintiff in that suit, but this right would not Eorbid his going into another State, where his adversary resides, and there bringing a suit to recover damages for a breach of the contract. If the defendant in such case can place his claim for damages in a more favorable condition to obtain redress; if his remedy in the State of his adversary party is more comprehensive, no sound reason appears to us why he may not go into the State of the other party to the contract alleged to have been breached and sue him there. It would be, indeed, anomalous for a resident of one State, claiming an action for breach of contract, to leave his own jurisdiction to sue for its breach, and to set up such prior suit in abatement of an action brought by the defendant against him in his own State to recover damages for a breach of the same contract. To grant such a privilege would be to allow a citizen of a State to evade its laws of remedial procedure, by instituting a suit in a foreign jurisdiction. Hence we conclude that the rule that the pendency of a prior suit in one State can not be pleaded in abatement of a suit between the same parties for the same cause of action in a court of another State applies as well where the second suit is instituted by the defendant in the first suit as where the plaintiff in both actions is the same person.

The circumstance that one of the suits may be pending in a court of equity and the other in a court of law does not alter the principle. Upon authority both English and American the Supreme Court of the United States has held that the plea of a former suit pending in equity for the same cause in a foreign jurisdiction will not abate an action at law in a domestic tribunal, or authorize an injunction against prosecuting such action. Insurance Company v. Brune’s Assignee, 96 U.S. 588" court="SCOTUS" date_filed="1878-03-25" href="https://app.midpage.ai/document/insurance-co-v-brunes-assignee-89744?utm_source=webapp" opinion_id="89744">96 U. S. 588 (24 L. ed. 737).

We do not contend that after a bill in equity has been filed, the court may not in a proper case enjoin the parties frpm litigating the whole or a part of the cause of action in a foreign'court; but we do contend that the bare fact that a bill in equity is pending in this State, in the absence of equitable considerations, furnishes no ground to enjoin a- defendant from suing on his claim in a foreign court, although the cause of action may arise out of the contract involved in the litigation in the equity court. Before the prosecution of the defendant’s suit will be enjoined, the propriety and’ necessity of confining the litigation to the tribunal in which it is first instituted must appear. The power of a court of equity to restrain persons within its jurisdiction from prosecuting suits in a foreign court rests upon the basis that the person whom it is sought to' enjoin is within the jurisdiction of the court, and he can be prevented from doing an inequitable thing. 22 Cyc. 813. The case of Engel v. Scheuerman, 40 Ga. 206 (2 Am. R. 573), is illustrative of the principle. In that case a Georgia creditor sued out an attachment against his non-resident debtor in this State. He also' sued his debtor on the identical demand in the State of New York. His attachment suit was prosecuted to judgment and satisfied by payment. After the attachment judgment'was paid the creditor 'assured the debtor that he would not further press the New York suit, but in violation of such assurance he prosecuted the New York suit to judgment. Thereupon the debtor filed a bill against the Georgia creditor in the county of his residence, to enjoin the enforcement of the New York judgment; and this court held that the creditor, a citizen of this State, having voluntarily sued his claim to judgment in the courts of this State, and accepted payment .of the judgment, will be enjoined from collecting the claim for the second time in a foreign court.’

In the case at bar the Northern Contracting Company contracted with the Ambursen Hydraulic Construction Company to construct a dam across the Tallulah river in Georgia. The former is a corporation of the State of New York, and the latter a corporation of the State of New Jersey. In the progress of the work differences arose between the contracting parties,’ each charging the other with a breach of the contract. Work was suspended. In order to complete the dam within the stipulated time, the Northern Contracting Company entered upcfn the work and took possession of the tools, materials, etc., of the Ambursen Company. The contract gave it a right to do this under certain contingencies; and when this right was exercised, it was to hold this property as security for any damages sustained by a breach of the contract on the part of the Ambursen Company. In this situation the Northern Contracting Company brought a suit in Rabun county to recover damages for breach of contract, praying that the covenant granting to it the right to retain the personal property as security be treated as a mortgage and foreclosed as such; and for injunction against interference with the work of construction and the use of the defendant’s tools, materials, etc. The temporary restraining order was no broader than the prayer for injunction. Afterwards the Ambursen Company, with another, alleged to be an assignee of a half interest in the subject-matter of the litigation, brought two actions in the Supreme Court of New York in the county of Nassau. The first concerned the personal property which was alleged to have been taken by the Northern Contracting Company, and the latter was a plain action at law for a breach of the contract. No point is made upon the injunction against prosecuting the suit in New York for the recovery of the personal property, but exception is taken to the injunction against prosecuting the action for breach of contract. Now let us see whether the case presented shows a necessity for confining the litigation for a breach of the contract to the superior court .of Rabun county. The fact that the maintenance of the two suits will cause double litigation, inasmuch as they involve the same subject-matter, is insufficient cause for an injunction against prosecuting the common-law action in New York, for the reasons advanced in the first part of this opinion. The suit in New York is for a breach of contract, and in no way interferes with the possession by the Northern Contracting Company of the personal property of the Ambursen Company, alleged to have been taken into possession by the Northern Contracting Compa*oy pursuant to the contract. In other words, the prosecution of the breach-of-contract action in New York does not affect the res in possession of the Georgia court. The restraining order did not forbid the institution of the action. It only remains to determine whether it is unfair and against conscience for the Ambursen Company to sue tlie Northern Contracting' Company, at the latter’s home, for an alleged breach of contract, instead of submitting to : the tribunal of a State selected by the other parly. It is urged, as ■ reasons for confining the litigation to the action filed in Eabun • county, -that that suit was first filed; that the court in which it pends is vested with full jurisdiction over the subject-matter; that the contract was to be performed in Georgia, and that the witnesses by whom the breach of contract and other relevant issues may be established are more accessible to the Georgia court. It is 'also urged that the Ambursen Company procured the Georgia Eailway and Power Company' to be made a party, and asked for and ob-, tained from the court a protective bond. For all of which reasons it is claimed that it would be unfair and inequitable not to confine all of the litigation to the action first instituted by it. On the other hand, the Ambursen Company replies, that it has the legal right to sue the plaintiff in the venue of the latter’s domicile; that the matters set up by the Northern Contracting Company against prosecuting an action against it in the State where it was incorporated relate solely to its own convenience; and that equity will not take away from the Ambursen Company its plain legal rights and require it to litigate in this State for the convenience of the other party, who prefers to submit the controversy to a foreign court rather than try the issues in a court of its legal residence. The Ambursen Company joined the Georgia Eailway and Power Company with the Northern Contracting Company in its suit in New York concerning the personal property; but it does not appear from the record that the Georgia Eailway and Power Company was made a party to this litigation at the instance of the Ambursen Company, or that it asked that the Northern Contracting Company be required to give bond to indemnify against a recovery of damages. But even if it did, we do not see how its effort to protect its property involved in the litigation should deprive it of its legal right to sue for damages for breach of contract in another State.

The joinder of Burton Thompson as 'a coplaintiff with the Ambursen Company in the New York suit is no ground for an injunction against the further prosecution of the action, even if the assignment be invalid. If both assignor and assignee are before the court as parties, the defendant is secure of all of its rights, and, further than they are involved, is not concerned with the question of title. Gilmore v. Bangs, 55 Ga. 405.

On the whole case, we think that the interlocutory judgment should be so modified as to relieve the Ambursen Hydraulic Construction Company from the injunction against prosecuting its common-law action for breach of contract in the State of New York.

Judgment reversed.

All the Justices concur.