272 F. 565 | 5th Cir. | 1921
Holmes county entered into a contrdct with Burton Construction Company and W. F. Allen to build certain public roads. Said contract called' for the giving of a bond for its faithful performance. The National Surety Company executed its bond guaranteeing such performance. The contract was partly performed. The Construction Company and Allen on December 24, 1917, brought suit against the county averring that they had. abandoned the contract because of certain breaches thereof by the county and seeking to recover damages, principally prospective profits.
Under certain peremptory instructions from the court the jury found a verdict for the plaintiffs. This court held that said instructions were erroneous, that no breach permitting the abandonment of the contract had occurred, that certain items claimed by plaintiffs were not proper, and remanded the case for a new trial. 267 Fed. 769.
Holmes county brought suit on the bond given by Burton Construction Company and Allen as principals and the National Surety Company as surety, in the chancery court of Holmes county, to recover on such bond because of the alleged failure of said Construction Company and said Allen, to perform said contract, to the damage of the county in a large amount, which was alleged to constitute a breach of said bond. The suit was dismissed, by the county, as to the Construction Company and Allen, and thereafter proceeded against the National Surety Company as sole defendant, as permitted by a Mississippi statute. In said suit a decree pro confesso Was taken, which was reversed by the Supreme Court of Mississippi for defective service on the National Surety Company and the case remanded to the chancery court. 120 Miss. 706, 83 South. 8. An answer was filed by the National Surety Company in the early part of 1920.
The case in said chancery court, being subject to trial at a term beginning May 17, 1920, Burton Construction Company, on April 27, 1920, filed a bill in the United States District Court for the Southern
The county answered said bill, moving in said answer to dismiss the same on several grounds, particularly insisting that the injunction sought would be in violation of judicial Code, § 265 (formerly Rev. St. § 720 [Comp. St. § 1242]), forbidding any court of the United States to grant an injunction to stay proceedings in the courts of a state, except where authorized by any law relating to proceedings in bankruptcy; also because the case sought to be enjoined is not between the same parties as that pending in said United States District-Court ; also because the bill sets forth no case entitling the complainant to the relief sought and there is no equity on the face of said bill.
On the hearing the court granted a preliminary injunction, with leave to the defendant Holmes county to take steps to make said National Surety Company a party'- defendant to the consolidated actions at law brought by Burton Construction Company and Allen in said United States District Court, to which action, granting such, leave, the Burton Construction Company excepted and had its exceptions allowed. Holmes county prosecutes this appeal, assigning error in the granting of said preliminary injunction, and also in overruling said motion to dismiss said bill of complaint.
“The general rulo is that state courts cannot enjoin proceedings in the courts of the United States, and this was held at a very ehrly day, in reference to a judgment of the Circuit Court (McKim v. Voorhies, 7 Cranch, 279, 281) ; while, on the other hand, it was determined that the Circuit Court would not enjoin proceedings in a state court, and any attempt of that kind was forbidden by act of Congress (Diggs v. Wolcott, 4 Cranch, 179; Act of March 2, 1793, c. 22, § 5. 1 Stat. 333, 33.).” Moran v. Sturges, 154 U. S. 250, 297, 14 Sup. Ct. 101.9, 1022 (38 L. Ed. 981).
In a case where a bill in equity was filed in the United States Circuit Court to enjoin the progress of two suits at law in said court, on the ground that a suit between the same parties, involving the same sub
“The case in the New York Supreme Court, therefore, involved the same controversy as that exhibited in the two Maryland suits; and the complainant here and Whitridge are parties in each. Alike in the bill and in the action at law, it is a vital question whether the insurers are liable for the sums insured by the policies of January, 1872, and whether they are liable to Whit-ridge as assignee of Brune. * * * But the difficulty in the appellant’s way is that, when this ease was heard in the court below, the record of the New York case exhibited no final decree. * * * All that appeared, then, was that a bill in equity was pending in a foreign jurisdiction, when the ap-pellee’s suits at law were brought to enforce the payment of the policies to Mrs. Barry, rather than to Bruñe or his assignee, and that both the present complainant and the present defendant were parties to that bill.
“This, we think, was not sufficient to justify the injunction for which the appellant prayed. At law, the pendency of a former action between the same parties for the same cause is. pleadable in abatement to a second action, because the latter is regarded as vexatious. But the former action must be in a domestic court; that is, in a court of the state in which the second action has been brought. Maule v. Murray, 7 T. R. 470; Buckner v. Finley, 2 Pet. 586; Browne & Seymour v. Joy, 9 Johns. (N. Y.) 221; Smith et al. v. Lathrop et al., 44 Pa. St. 326.
“The rule in equity is analogous to the rule at law. Story, Eq. Pl. § 741. In Foster v. Vassal, 3 Atk. 587, Lord Hardwicke said: ‘The general rule of courts of equity With regard to pleas is the same as in courts of law, but exercised with a more liberal discretion.’ In Lord Dillon v. Alvares, 4 Ves. 357, a plea of a pending suit in a Court of Chancery in Ireland was overruled in the English Court of Chancery. Certain it is that the plea of a suit pending in equity in a foreign jurisdiction will not abate a suit at law in a domestic tribunal. This was shown in a very able decision made by the Supreme Court of Connecticut, in Hatch v. Spofford, 22 Conn. 485, where the authorities are learnedly and logically reviewed. See, also, 7 Mete. (Mass.) 570, and 16 Vt. 234.
“If, then, a bill in equity pending in a foreign jurisdiction has no effect upon an action at law for the same cause in a domestic forum, even when pleaded in abatement; if, still more, it has no effect when pleaded to another bill in equity, as the authorities show — it is impossible to see how it can be a basis for an injunction against prosecuting a suit at law. It follows that the refusal of an injunction by the Circuit Court was not erroneous.” Insurance Co. v. Brune’s Assignee, 96 U. S. 588, 592, 593 (24 L. Ed. 737).
In this case the suit in the United States court was brought by Burton Construction Company and Allen against Holmes county to recover damages for alleged breaches of contract, on the ground that the county had committed such breaches as authorized plaintiffs to abandon the contract and sue for the sums earned thereon and the loss of prospective profits. To this action the only defense set up by the county was the general issue. No set-off was pleaded thereto. This court has held that there had been no such breaches of contract as authorized an abandonment thereof and a suit for prospective profits.
The suit brought by Holme's county is on the bond given by tire contractors and the National Surety Company, to recover on it, alleging damage arising from the abandonment of said contract by said contractors. While Burton Construction Company and Allen were named as parties thereto, they were subsequently dismissed, and the case is proceeding alone as to the National- Surety Company.
No judgment against the Surety Company could be had in the consolidated suits at law pending in the United States District Court. That company could not be made a party thereto, by the defendant, Holmes county, and a suit on its bond injected into this suit for damages between Burton Construction Company and Allen as plaintiffs and Holmes county as defendant. Of the present case it may be truly said:
“This ease falls far within the unquestioned rule that the pendency in a state or other court of an action in personam which involves no claim to or lien upon specific property in the possession or under the dominion of a national court of equity, and no issue of which that court has acquired exclusive jurisdiction, presents no ground for a dependent bill to stay it. Stanton v. Embry, 93 U. S. 548, 554, 23 L. Ed. 983; Standley v. Roberts, 59 Fed. 836, 844, 8 C. C. A. 305, 314; Barber Asphalt Paving Co. v. Morris, 66 C. C. A. 55, 58, 132 Fed. 945, 948, 67 L. R. A. 761; Merritt v. Barge Co., 79 Fed. 228, 233, 24 C. C. A. 530, 535; Green v. Underwood, 86 Fed. 427, 429, 30 C. C. A. 162, 164; Hughes v. Green, 28 C. C. A. 537, 539, 84 Fed. 833, 835; Hubinger v. Central Trust Co., 36 C. C. A. 494, 496, 94 Fed. 788, 790; City of Ogden v. Weaver, 108 Fed. 564, 568, 47 C. C. A. 485, 492; B. & O. Ry. Co. v. Wabash R. Co., 57 C. C. A. 322, 324, 119 Fed. 678, 680; Ball v. Tompkins (C. C.) 41 Fed. 486, 490; Guardian Trust Co. v. Kansas City Southern Ry. Co., 76 C. C. A. 615, 618, 146 Fed. 337, 340.” Guardian Trust Co. v. Kansas City Southern Ry. Co., 171 Fed. 43, 50, 96 C. C. A. 285, 292 ( 28 L. R. A. [N. S.] 620).