UNITED STATES V. ELLIOTT.
interstate commerce, which prevents them from operation. Olivera v. Insurance Co., 3 Wheat. 193. It was perfectly competent for congress, in the exercise of its constitutional jurisdiction of the whole subject of such commerce, topass laws to prevent and suppress unlawful conspiracies and combinations to interfere with the operation of such commerce. Aocordingly, section 4 of said act provides that:
"The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be' the duty of the several district attorneys of the United States, in their respective districts, under the direction of the attorney general, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited." "When the partles complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall· be deemed just in the premises."
It was pursuant to this statute, inter alia, that Judge THAYER issued the temporary restraining order in this case. I am unable to perceive the force of the argument against the power of congress to authorize such civil proceedings in equity to suppress and l'estrain combinations and conspimcies to accomplish the obstruction and destruction of interstate commel'ce and tl'ade before it is accomplished. It was just as competent for congress to provide this civil remedy of prevention as it was to provide for punishment in a criminal proceeding for the unlawful conspiracy entered upon or consummated. It is urged by counsel for defendants that courts of equity will not interpose by injunction to prevent the commission of an act which, when done, would be a crime penally punishable. This is an "old saw." It is a 'general rule of equity jurisprudence that courts of chancery will not interpose where there is an adequate remedy at law, nor will they ordinarily interpose to prevent the commission of a crime. A well and long established exception to this rule is that where parties threaten to commit a criminal offense, which, if executed against private property, would destroy it, and occasion irreparable injury to the owner, and especially where such destruction would occasion a multiplicity of suits to redress the wrong if committed, courts of equity may interpose by injunction to restrain the threatened injury. The law, it does seem to me, would be very imperfect, and indeed impotent, if a number of irresponsible men could conspire and confederate together to destroy my property, to demolish or burn down my house, that I should be remitted alone to the criminal statutes for their prosecution after my property was destroyed. Most generally, sueh lawbreakers who engage in such conspiracies are a lot of professional agitators. They have no property to respond in damages. Their tongues are their principal stock in trade; and inasmuch as imprisonment for debt is abolished, and cruel and unusual punishments are prohibited, an execution would be quite unavailing. It certainly presents a case that most strongly appeals to. the strong arm of a court of equity to reach forth to pre·
vent greatinjury and loss, as the only m:eans of consemllg the rights of prlvateproperty. It is now a well-recognized office of a court of eqUity to conserve and preserve the rights of private property in advaneeof its Dlolestation and appropriation, where, from the pecul· iar circutiJ.8tances, the remedy atll:iw might be of doubtful restiIn the recent case in Chicago, in which E. M. Arthur was intervener, against Thomas F. Oakes et al. (63 Fed. 310), Mr.·Tustice Harlan, in reviewing the restraining order issued by Judge Jenkins, has very effectually met this objection, and presented the law respectin.g 1;inlawful conspiracies with a force and clearness to forever set this question at rest. It may not be out of place here to say that no public decision has perhaps .been so much misunderstood, or igl10rantly or intentionally misrepresented and perverted., as that of the distingUished jurist. The opinion recognizes the right of employes and labor organizations, in the absence of a contract binding the employe to a given term of service, whenever they become dis· satisfied with their employment or their wages, to quit the service of the employer, either separately or collectively; and they have a right, by preagreement or preconcert of action, to unite together for taking peaceful and lawful means to secure an increase of wages; to withdraw, separately or in a body, from the service of the employer, when dissatisfied. It is not competent for the courts to in· terpose to restrain their right of volition, which is among the natural and inalienable rights of every citizen, to work for whom he pleases, where he can get employment, and to quit·whenever he is dissatisfied therewith. But the opinion distinctJy announces the further proposition that such men have no right to conspire and com· bine together, not only for the purpose of securing better conditions and wages,and quit service if not secured, but to go further for the purpose of preventing the employer from supplying the places vacated with other employes, who are ready and willing to take their places; that they have no right to combine and confederate together for the purpose of wantonly injuring and destroying the property of their employer, and to obstruct and interfere with his dominion over and control of his private property. An act which, if done by an individual, may be lawful, may become quite a different thing when undertaken to be done by a confederation among many, hav· ing for its inspiration the purpose of injuring and destroying the property of another, by preventing him from prosecuting his business by taking into his service others to supply the places of those who voluntarily have gone out. So the learned justice says:
"It seems entirely clear. upon authority, that any combination or con· spiracy upon the part of these would be illegal, which has for its object to cripple the property in the hands of the receivers, and to embarrass the operations of the railroad under their management, either by disabling or rendering unfit for use the engines, cars, or other property in their hands, or by interfe'l'ing with their possession, or by actually obstructing their control or management of the property, or by using force, intimidation, threats, or other wrongful methods against the receivers or their agents, or against employlis remaJning in their service, or by using like methods to cause employlis to quit, or prevent or deter others from entering the service in place of those leaving it. Combinations of that character disturb the peace of society, and are mischievous in the extreme. They imperil the interests
UNITED STATES V.ELLIOTT.
of the public, which may rightfully demand that the free course of trade shall not be unreasonably obstructed. They endanger the personal security and the personal liberty of individuals, wbo, in the exercise of their inalienable privilege of choosing the terms upon which they will labor, enter or attempt to enter the services of those against whom such combinations are aimed. And as acts of the character referred to would have defeated the proper administration of the trust estate, and inflicted irreparable injury upon it, as well as prejudiced the rights of the public, the circuit court properly framed its injunction so as to restrain all such acts as have specifically been set forth, as well as combinations and conspiracies having the object and intent of physically injuring the property, or of actually interfering with the regular, continuous operation of the railroad."
Further on, he says:
"In our consideration of this case, we ha:ve not overlooked the observation of counsel in respect to the nse of special injunctions to prevent wrong Which, if committed, may be otherwise reached by the court."
Then, after observing that this jurisdiction of a court of equity should be cautiously and conservatively exercised, said:
"It wlII be refused until the court is satisfied that the case before it is of a right about to be destroyed, irreparably injured, or great and lasting injury about to be done by an illegal act. In such a case the court owes it to its suitors and its own principles to administer the only remedy the law allows, to prevent the commission of the act. The authorities all agree that a court of equity should not hesitate to use this power when the circumstances of the particular case in hand require it to be done, in order to protect rights and property against irreparable damages by wrongdoers."
Then, quoted from Mr. Justice Story, the following:
"The' jurisdiction of these courts thus operating by special injunction is manifestly indispensable for the purpose of social justice, in a great variety of cases, and therefore should be fostered and upheld by a steady confidence."
The court then concludes with the statement that no other remedy than that of injunction, to meet such extraordinary conditions of affairs, was full and complete for the protection of the property, and "for the preservation of the rights of the public in its due and orderly administration by the courts." The court then says:
"That some of the acts enjoined can criminally subject the wrongdoers to actions for damages, or to criminal prosecution, does not therefore, in itself, determine the question as to interference by injunction. If the acts stop at crime, or involve merely crime, or if the injury threatened could, if done, be adequately compensated in damages, equity would not interfere. But as the acts threatened involve the irreparable injury to and destruction of property, as well as continuous acts of trespass, to say nothing of the rights of the public, the remedy at law would have been inadequate."
This dO<ltrine was long ago announced by so distinguished a jurist as Mr. Justice St()lry, who said: '
"If, indeed, courts of equity did not interfere in cases of this sort, there would, as has been truly said, be a great failure of justice in this country."
As said by Judge THAYER in granting this provisional injunction:
"A combination whose professed object is to resist the operation of railroads whose lines extend from a great city into adjoining states, until such roads accede to certain demands made upon them, whether such demands are in themselves reasonable or unreasonable, just or unjue1;, is certainly an unlawful conspiracy in restraklt of commerce among the states; and under the laws of the United States, as well as at common law, men may not conspire to accomplish a lawful purpose by unlawful means."
FEDERAL REPORTER, vol. 64.
It w<>144 ifmost' anomalous state of affairs, in a country like this, ihnen, because of some supposed or real grievance with an employer in a diStinct business, should be permitted to confederate anil conspire for, the purpose of coercing the employer into acceding to their deman;ds, and, as a means to a specific end, tie up and stop independent railroads extending from, the Pacific coast to the Lakes on the north and northeast, deaden all the engines on the tracks; thereby the transportation of passengers and the necessary supplies passing frOID one state to another, and stop the shipment of cattle, sheep, hogs, corn, wheat, oats, fruits, and vegetables. Itis,impossible to state in language the far-reaching destructiveness and ruin of 'such a' scheme, if permitted to, proceed to accomplishment., , The business of thi$ country has adjusted itself to ()f interstate Large communities of people are depehd,ent for the necessaries of life upon the agricultural products Of. communities. While we have a state here with a productive energy,'·. and ,capacity for producing nearly all the necessaries of life, yet, beCause of the fact that other localities can produce with less labc>rand more profit certain supplies than the local community,peopleforbeargiving attention to the production of articles they canthus obtain. more cneaply and readily, and depend therefor upon other communities, and the railroads for transporting such supplies from one, state to, another. If persons may combine and, confederate together. to stop the railroad trains from pa.ssing from one city and one state to another, it is easy to be seen how quickly and readily produce ruin, famine, and death in our great cities. They equId cut off such necessaries for the sustenance of life as an adequate 8upplyof coal, and in one month, or less, produce a coal famine in city and country. It certainly ought to be permissible to the representing the whole people, to interpose, to preserve and protect the public life and the public health. The framers of the federal constitution builded wisely when they gave to congress control over our intel"State commerce. With prophetic eye, they looked far into the, future of their country, and foresaw the development of its commerce, and the absolute necessity of the free· dom of commercial intercourse between the diffel'ent communities extending from ocean to ocean. The fact that congress did not enact the statute above recited until 1890, is no argument against the existence of its power. Many powers lodged by the constitution in the legislative department long lie dormant, until the exigency arises to invoke them into activity. As said by Mr. Justice Miller in Sawyer v. Hoag, 17 Wall. 620:
"When we consider the rapid development of corporations as instrumentalities of the commercial and business world in the last few years, with the corresponding necessity of adapting legal principles to the new and varying eXigencies of this business, 'it is no solid objection to such a principle that it is modern, for the occasion for it could not sooner have arisen."
Congress passed the act of 1890 in response to the public necessities. And as the sequel proved, in the great extremity to which the country was forced last summer, the framers of the law "builded wiser than they knew." The furious assaults made on the federal
UNITED STATES '/J. ELLIOTT·.
judiciary in connection with this trouble, for grasping jurisdiction, are wholly unwarranted,in view of the expreSs authority given the courts by said act of congress. The federal courts are the creation of the federal constitution, and the laws made in pursuance thereof. It is their office to execute, and not make, the laws. They possess just such p<lwers, and all the power and jurisdiction, as are con· ferred on them by the supreme law of the land. And when they come in the exercise of the jurisdiction with which they have been clothed by an express act of the federal legislature, and grant injunctions, as they did last summer, against unlawful combinations of men, to restrain and prevent the operations of the unreasoning and unappeasable spirit of the mob, in the protection of the freedom of trade and commerce, to break the blockades on the public highways so as to open up travel and the transportation of the United States mails, and restore by civil processes the healthful glow and flow of a nation's commerce, they come as servitors, within the meaning of the preamble to the federal constitution, "to establish justice," and to conserve the public welfare. In such office they deserve the commendation of all good men, rather than the hurtful criticisms to which they have been exposed. It is well, in such a crisis, that the American people should be reminded that this is a government of law, and not of the tumultuous assembly controlled by one spirit to-day, and by another to-morrow. . Objection is made in the demurrer and the brief of counsel that the restraining order granted in this case went against parties not named s·pecifically in the bill and the restraining order. The language of the provisional order in this respect is as follows:
"It is ordered that the aforesaid injunction, with writ of injunction, shall be in force and binding upon such of the defendants as are named in said
bill, · · · and shall .be binding upon such defendants whose names are not stated, but who are within the terms of order."
The order further directed that the injunction should be operative upon all persons acting in concert with the designated conspirators, and under their direction and control, and where parties were not named especially in the writ, but were found to be acting in concert with and under the direction of the alleged conspirators, and commit some act in furtherance of the conspiracy, then the marshal should serve the writ upon them, and if, after service of the writ upon them, they did any act in violation of the injunction, they would come within the terms of the restraining order. This, I think, it is competent for the court to do, under section 5 of the act aforesaid, and that it was conforlnable to the custom and usage of courts of equity, where there are engaged such large numbers of unknown persons in such unlawful conspiracy. As the order of injunction was not to become operative upon them until served with a copy thereof, it does not lie in their mouths to question the regularity of the proceeding. My conclusion is that the bill is sufficient, and the demurrer is overruled.
CINCINNATI, H. &D. R. CO. v. McKEEN. (Circuit Court of Appeals, Seventh Circuit. L
Ocrober 1, 1894.)
Whera.the parties are in pari delicto, an executed contract will not, as a general rule, be set aside because of want of authority to make it.
In May, 1887, complainant's board of direCtors authorized its vice presi.·.. to buy 20,000 of· the stock of the T. & I.. Railroad Co., and. the sale of .certain stock of the D. & M. Railroad Co., owned by'. C?tl1plainant, to provide' funds for the purchase, which stock was accotdlngly Bold. June 1, 1887, 1., "trustee," entered into an agreement wIth defendant, by which defendant agreed to sell to 1. 11,160 shares of stock. of thf;} T. & I, Railroad Co. and 4,446 shares of stock of the T. & L. Co., to deliver 8,560 shares of T. & 1. stock and all the '1.'. & L; stock 'on June 4th, and the remainder 'Of the T. & 1. stock in 30 days, andaclmowledged the receipt of $250,000 from 1., who agreed on June 4th to pay .$639,500, and execute. his note for $669,150, with the stock as collateral. On June 4th the stock was delivered by defendant,· and the money paid and note and collateral delivered by I., and a receipt signed by both parties acknowledging the receipt of stock, money, and notes. Within the 30 days, defendant delivered the remainder of the stock. June 21st, a meeting of complainant's stockholders ratified the sale of the D. & M. stock, with knowledge of the purpose of the sale. I. been displaced as an ofiicer of complainant, the board of directarspassed two resolutions referring to the T. & I. stOCk, and treating it as the property of complainant, and subsequently brought two suits, before the present one, seeking relief based upon complainant's ownership of that stock. Upon this bill, alleging that the funds paid to by 1. belonged to complainant, and seeking to set aside the contract of June 1st as ultra vires the complainant, to declare defendant a trustee for complainant of the $889,500 paid him by 1.; and to cancel the note given by I., held, that the contract had been fully executed; and both parties being equally chargeable with notice of its illegality, and no circumstances of oppressiQ,n or fraud on defendant's part being established, it would not be stlt aside, nor would the note be canceled, the illegality of the contract being a complete defense at law, and the note bein,g overdue at the commencement of this suit.
Appeal from the Oircuit Oourt of the United States for the District of Indiana. Suit by the Oincinnati, Hamilton & Dayton Railroad Company against William R. McKeen. Defendant obtained a decree. Complainant appeals. This suit was brought to obtain a decree dedaring the defendant, William R. McKeen, a trustee for the plaintiff, the Oincinnati, Hamil· ton & Dayton Railroad Oompany and its stockholders, in respect of certain moneys aggregating $889,500 received by hilll from one Henry S. Ives, and also cancelling, as against that corporation, an agreement in writing of June 1, 1887, signed by McKeen individually, and by Ives,"trustee," and a note of June 4, 1887, given to McKeen by rves as "trustee," for $669,150, and payable six months after date. The circuitc()urt beld by Judge Jenkins when district judge dismissed the bill for want of equity. The case made by the pleadings and evidence is as follows: Prior to May 30,1887, Henry S. Ives, a vice president of the Cincinnati, Hamilton & Dayton Railroad Oompany, an Ohio corporation,