UNITED STATES V. MEMPHIS' 41 LITTLE BOOK B. 00.
237
UNITED STATES ex f'eZ. SOUTHERN EXPRESS CO. v. MEMPms& LITTLE ROOK
R. Co. and others.
(Oircuit Court, W. D. Tennessee. March 8,1881.)
1.
CONTEMPT OF COURT-BREACH OJl' INJUNCTION.....FOREIGN CORPORATION-FINE.
Under the statutes of the United States a corporation may be fined for a breach of an injunction, and the court is not limited to proceedings against the individual directors or other responsible agents. And where a foreign corporation is doing business in another state, in which the courts of the United States acquire jurisdiction over it to issue an injunction, it is proper to punish a contempt of 'the court's authority by a fine, as well against the corporation itself as the subordinate agents found within the jurisdiction.
In Equity. Rule to show cause why they should not be punished for contempt of court, by the violation of an inj unction, was issued against the Memphis & Little Rock Railroad,Company, an Arkansas corporation, doing business in Tennessee, andcertam designated officials and agents, who,. being served with the rule, all appeared and an!3wered, including the corporation. It appeared that on a bill filed by the Southern Express Company an injunction was granted, among other things,for. bidding discriminations against the plaintiff, and directing not more than a certain rate should be charged for express' freight between Memphis and. Little 'Rock. The injunction was properly served, but the railroad company continued to charge a greater rate than it specified, and refused the plain" tiff's freight without payment of the overcharges. There was much proof taken, but the facts on which the court acted were sufficiently stated in delivering judgment. The defendant company moved at the same time to dissolve the injunction, among other causes, for the reason that the published act of the Arkansas legislature, on which the court acted in determining the rates, was never, in fact, passed, and after the contempt proceedings were ended the' injunction was modified in accordance with that fact. There was shown by the evidence of the telegrams and orders issued by the company,
REPORTER.
or some one acting for it, So vacillation between a direction obey the one to disobey it outright j hut the general result was to cha,rge the rate fixed by the injunction, but to increase it by adding charges for ferriage over the river at Memphis, and bridge tolls over the river at Little Rock, which extra charges had never before been made separately to the plaintiff or other shippers, bnt were included in the tari:ff rates. .F. E. Whitfield, 'P. B. Turley, and Geo. Gillham, for relators. ' B. C. I!rown, R. J. Morgan, and W. G. Weatherford, for respondents. HAMMOND, D. J., (orally.) There is no dOl,lbt whatever on the proof that this injunction has been violated, and that deliberately, either because it was supposed this court had no Jurisdiction, which had beeiuuled against the defendant corporation, or because it was supposed that it could be circumvented by a pretext for the misconstruction of its plain language. Advice of counsel is no excuse, and, unforfortunately, we have not a hold now on the individuals who instigated the violation, nor 81ny definite proof as to the particular persons responsible for the orders and telegrams underthe authority of which the breaches were committed by the' subordinate' age1:lts of the company. I appreciate the position these agents oQcuPY, and the dilemma in which they were placed. On the one hand they had the unambiguous a.nd plain command of this court, and on the other that of tlleirsuperiors,'to whom,' generally, obedience is a duty, and, perhaps, always:a necessity, when considered in relation to the, ,probable loss, of their employment, for disobedience. Notwithstanding tllis, thet.e can be no question that at all hazarfl,sofsuch losses it was. their duty to obey the injunction. I, sho,uld be I'latisfied with' a reprimand, and the penalty of QO,sts, 'it it did not appear in the evidence that these young ml3ll"in'the 1,anguageofthe telegrams and affidavits, "were thereaponsibility" of 'violating this injYJ:lction,an.d, put for" theix disobedience of it, its violation by ,theotja6tllW,O)lldhave bee.n impossible. The route-age!lt·
UNITED STATES ·V. MEMPHIS .. LITTLE ROCK R. CO.
239
and messenger are, therefore, fined $50 eadh, ahd will committed to the jail of Shelby oounty till the fine and 'costs are paid. The general manager shows satisfaotorily, I am· glad to say, that he was in Texas, and neither signed not authorized the telegrams which directed disobedience of the' injunction, and which some parties, unknown to this oourt,' sent in his name, without his knowledge· or ·oonsent. He advised and counselled obedience when first. he had knowledge of the injunction. He is discharged. So the other agents responding to the rule to sllow cause may be discharged. They only refused to act at the request of the telators in giving orders to the two agents already fined, who were willing to take the responsibility. It is not· necessary to determine whether they had superior authority which would haveb'eew recognized by the guilty respondents,beel1usethey simply did nothing and declined to interfere.' . As to the corporation itself, I am satisfied it may be pttnL ; ished under our statutes by a fine,an:d that the court is not confined to the remedy against the directors individually, or such other responsible persons as may be discovered' as the authors of the telegrams and orders. In. England it is {}r was not usual to punish a contempt by a fine, even in the: case of natural persons. They were "to stand committMto Whitecross-street prison." The order gll:ve specific directions for purging the contempt where the case required,and the imprisollmentcontinued until they were It was sometimes required that this imprisonment shouldlast until a money award, in the nature ofcompensationt "'as paid to the party injured; but I do not find, in the limite'dJ investigation I have been able to make during these proMed. ings, that a fine was ever imposed in the nature of a; penalty to the crown, though it may be so. Obedience to an tion against privileged persons and corporations was sometimes enforced by sequestration, which placed the property of the contemnor in custody until obedience· was .2 Dan'l, Ch. Pro (5th Ed.) 1685, Bish. Cr; L. (l)th Ed.,r §§ 241, 273; Spokes V. Banbury Board of Ilealth, D. B; lEq} 42, and cases cited by thc6.e authurities. Our Revised, StatJ
240
FEDERAL REPORTER.
utes, taken from the act of March 2, 1831, c. 99, and prior acts of congress, have prescribed the mode of punishment, and directed that it shall be by fine or imprisonment, and this operates as a negation of all ,other modes of punishment. Contempts may also be punished by information or indict. ment, in which case the punishment is limited to a fine of not more than $500, or imprisonment not more than three months. Rev. St. §§ 725, 5399; 4 St. 488; Ex parte Robin8on, 19 Wall. 505; 2 Bish. Cr. L. § 267. It is constant ,practice to punish corporations where, they are amenable to the, criminal law, by fine. Mr. Bishop says that although "a corporation cannot be hung, there is no reason why it may not be fined for the same act which would subject an individual to the gallows." 1 Bish. Cr. L. (6th Ed.) § 423. It is usual, in contempt proceedings, to arraign the individual agents, and that is the better way, perhaps, where it can be done and is effectual; but, although I have found no case imposing a fine on the corporation itself, and diligent counsel say they find none, I do not hesitate to hold that it can be done, and should be in proper cases. Here the headquarters are in an adjoining state, where the parties-whoever they were-directing 11 violation of this inj unction reside, and I am not satisfied that our authority is vindicated by the fines imposed for their individual offence upon the comparatively innocent young men who are the subordinate agents in the execution of orders for which the corporation itself is fairly responsible. It is here by service of notice in a manner that would be amply sufficient to give this court jurisdiction to render a money decree in a civil suit, and, moreover, have appeared formally and answered the rule. The corporation itself is therefore fined the sum of $250, and the costs of this proceeding. I have taken into consideration the mitigating circumstance that the injunction imposed a restriction as to rates , which was not authorized by law; the published act of assembly of the state of Arkansas, upon the authority of which the injunction was granted, having turned out to be not a valid law, it not having been in fact enacted in both houses of the
CROSS
V.
MORGAN.
241
assembly, as appears in proof. But for that circumsta.nce I should impose a heavier fine. I do not find in the case that good will and fair intention which in cases of wrongful injunctions sometimes reduce the offence so that the court is satisfied with the penalty of costs. The case requires more than this to sustain the dignity of the court against wilfal breaches of its authority. So ordered.
and others v. MORGAN and others. March 22,1881.)
(Oircuit Court, D. New Jer,C'J/.
EQUITY PRACTICE-AMENDMENT-ANSWER.
Leave to amend an answer, in a suit to foreclose a mortgage, by the insertion of an additional fact, refused, where such fact was known to the defendant at the time the answer was filed.-[ED.
On Bill to Foreclose, etc. NIXON, D. J. This is an application to the court to allow one of the defendants to amend his answer. The bill was filed to foreclose a mortgage executed originallyby one Joseph Cross, Jr., to Joseph Cross,to secure the payment of $8,500. After the due execution of the encumbrance, the mortgaged premises were sold to one James R. English, who assumed the payment of the mortgage as a part of the consideration money. English, in turn, conveyed the property to Anthony Q. Keasbey and Edward A. S. Man, as joint tenants, who also assumed the payment of the same. Keasbey and Man, holding the property as trustees for certain creditors, transferred it. to J. Pierpont Morgan,who, in the deed of conveyance to him, also assumed the payment of the mortgage as a part of the consideration of the transfer. The executors of the mortgagee filed a bill against the, said Morgan and others, praying therein not only for a decree of fQrecloaure, but also that the said Keaaby, Man, and Morgan might be respectively decreed to pay the deficiency, if the v.6,no.8-16