Kinner et al v. L. S. & M. S. R. R. Co.

[Vol. III, N. S.

of equity, and, on this ground alone, it is claimed that the injunction allowed is contrary to law, and that is the question before the court.

It is not necessary to cite authority to the point that a court of equity will not protect the subject-matter of an illegal contract and will not enforce an illegal contract.

The question, then, as we understand it, is this: A number of railroads furnish each a member of an association, which association, it is claimed, is organized for the purpose of keeping up passenger rates and stifling competition, and, hence, is against public policy and contrary to the anti-trust law passed by the congress of the United States in 1890; and that that association took some action in regard to the amount that should be charged for tickets from various states along the line of the railroad to persons attending the encampment. It is not shown, however, that the association went into such detail, nor that it did anything more than to determine that the persons attending the encampment should have passage thereto and return for one fare; and that, after such association, each railroad for itself made terms and sold the tickets for the round trip for one fare; and after the persons who bought the tickets arrived in Cleveland, the plaintiffs in error undertook to buy the tickets for the return trip contrary to the terms of the contract and in fraud of the defendant in error and illegally and unlawfully; and, thereupon, the defendant in error obtained an injunction against their so dealing with these tickets.

Under these facts, will a court of equity refuse the defendant in error relief against such unlawful dealing?

The defendant in error relies almost wholly upon the case of Delaware, L. & W. R. R. Co. v. Frank, 110 Fed. Rep., 689, in the United States Circuit Court for the Western District of New York.

That case is the one wherein the railroads made special terms to persons attending the Pan-American at Buffalo. It appears that the combination there made was, that the railroads agreed to pool their roads and their earnings upon such tickets and, at a time, divide the proceeds upon some basis determined by the association. In that regard the case differs from the one under consideration.

The defendant in error cites us to a case decided in San Francisco about the same time that Judge Hazel decided the case at Buffalo, and the cases seem to be at variance with each other. In the San Francisco case an injunction was, issued restraining scalpers from dealing in Epworth League excursion tickets, and in seeking dissolution of the order, the scalpers' attorney urged that the railroad company did not come into the court of equity with clean hands, and that its combination with the other competing railroads by which the Epworth League scheme was brought about, was in violation of the provisions of the Sherman act by which it was made unlawful for competing railroads to fix rates; and it was urged that on this account, the tickets being themselves unlawful, the railroad could not restrain any one from dealing in them. We have not seen this case reported in any law report, but have been referred to a notice of the same, and in the notice it seems that Judge Murasky decided the case, saying that the rule requiring persons to enter a court of equity with clean hands applies equally to plaintiffs and defendants; and that the defendant, by his own affidavit, showed that he himself was engaged in an unlawful business which involved deceit, false personation and forgery, and that he who asks the court to relieve his shoulders of the burden of an injunction upon any other ground than lack of jurisdiction, is expected to deny the equities of the bill and not to disclose an utter absence of right on his part.

Nashville, C. & St. L. Ry. Co. v. McConnell, 82 Fed. Rep., 65, is a case much like the one before us, where the injunction was allowed.

In Baltimore & O. S. W. R. R. Co. v. Broome, in the Superior Court of Cincinnati, an injunction was granted July 9, 1901, the occasion being the Christian Endeavor convention.

The maxim of coming into court with clean hands is confined by courts of equity to misconduct in regard to or connected with the matter in litigation, so that it affects the equitable relations subsisting between the two parties and arising out of the transaction. It does not extend to any misconduct, however gross it is, unconnected with the matter in litigation and with which the opposite party has no concern.

Kinner et al v. L. S. & M. S. R. R. Co.

[Vol. III, N. S.

A court of equity will not shut its doors to the wicked and to those who are guilty of violation of law, simply because of the moral state of the person, but will confine the maxim to where the wrong-doing has directly affected the particular matter under consideration by the court. There is no contention in this case as to this matter between the parties hereto. The real question is: Does the illegal contract, set up in the answer, so affect and taint the contract between the railroad company and its passenger that a court will refuse to restrain the plaintiffs in error from doing what they acknowledge to be an unlawful thing.

In Strait v. Harrow Co., 51 Fed. Rep., 819, where a suit was brought to enjoin the infringement of a patent, the court say, on page 819:

"Such a combination may be an odious and wicked one, but the proposition that the plaintiffs, while infringing the rights vested in the defendant under letters-patent of the United States, is entitled to stop the defendant from bringing or prosecuting any suit therefor because the defendant is an obnoxious corporation, and is seeking to perpetuate the monopoly which is conferred upon it, by its title to the letters-patent, is a novel one, and entirely unwarranted."

Further on, quoting now again, the court say:

"If the defendant had brought suit against the plaintiffs for some breach of contract or violation of its alleged rights, founded upon the combination agreement, then it might become pertinent to inquire into the character of the combination, and ascertain whether the court would enforce any rights growing out of it. But in a suit brought for the infringement of a patent by the owner, any such inquiry, at the behest of the infringer, would be as impertinent as one in respect to the moral character or antecedents of the plaintiff in an ordinary suit for trespass upon his property."

In Bonsack Mach. Co. v. Smith, 70 Fed. Rep., 383, the plaintiff sued for an injunction against the infringement of a patent, and the defendant set up the conduct of the plaintiffs in attempting to obtain a monopoly, and the court held that it was. no defense.

The Charles E. Wisewall, 74 Fed. Rep., 802. In this case, the defendants undertook to avoid payment of tonnage charges, on

the ground that the complainant was a member of an association illegal under the Sherman anti-trust act. The language of the court is directly to the point under consideration and is to the effect that the answer was not well taken.

The purchaser of the ticket, having received compensation in part, and the railroad company being ready to fulfill the entire contract, and having dealt with the railroad company in regard to the ticket, he can not take the benefit of his bargain without paying the consideration. He can not receive the benefits of his contract without fully complying with the same himself.

Dennehy v. McNulta, 86 Fed. Rep., 825, 827. The court say that

"The mere fact that the corporation as one of the contracting parties may constitute an unjust monopoly, can not serve ipso facto to create default or liability on its contracts generally; nor can such fact be invoked collaterally, in any manner to affect in any manner its independent contract obligations or rights."

LaFayette Bridge Co. v. Streator (City), 105 Fed. Rep., 729. These cases are to the effect that the illegal combination of the railroads can not be drawn into a suit in a collateral way; and that the relation between the railroad company and the ticket broker is so far foreign to the action of the passenger association, that it will not avail the plaintiffs in error in this

case.

There are many cases cited in the brief of defendant in error which establish the point that courts will refuse to apply this maxim that a person must come into court with clean hands, for the benefit of persons seeking to evade a law. Chicago v. Stock Yards Co., 45 N. E. Rep., 430; Meister v. Alber, 36 Atl. Rep., 360 (85 Md., 73-84); Lew's & Nelson's Appeal, 67 Pa. St., 153, 166; Mossler v. Jacobs, 66 Ill. App., 571; United Protestant E. G. Congregation v. Stegner, 21 Ohio St., 488; Norton v. Blinn, 39 Ohio St., 145; National Distilling Co. v. Importing Co., 56 N. W. Rep., 864 (86 Wis., 352, 355); Sylvester v. Jerome, 34 Pac. Rep., 760 (19 Col., 128).

These cases and many others that we have examined establish these propositions:

First-The unlawful combination between the railroad companies can not be tried and determined in this action.

Second-If that combination is unlawful and contrary to the anti-trust law of the United States, still the act of that association is not so directly connected with the contract under consideration that a court of equity will refuse to grant the defendant in error equitable relief.

Third-Unless the contract under consideration is itself unlawful and against public policy, a court of equity will grant relief by way of injunction to restrain one who is not a party to the contract but who is seeking to induce others to violate the same, and to accomplish that end must do a wrong that is offensive to a court of equity and which amounts to a crime.

These conclusions being reached, it is clear that the plaintiffs in error are not entitled to have the judgment below reversed, and the judgment is affirmed.

Foran, McTight & Baker, for plaintiffs in error.

Brewer, Cook & McGowan, for defendant in error.

ACTION ON GUARDIAN'S BOND.

[Circuit Court of Lucas County.]

ALVINA A. WEGNER V. JOHN L. WILTSIE ET AL.

Decided, February 7, 1902.

Guardian and Ward-Bond of Guardian-Action on Accrues, when― Jurisdiction-Conclusions of Law and of Fact-Pleading.

1. No cause of action accrues in favor of a ward on the bond of his guardian until final settlement and adjudication of the account of the guardian in the probate court.

2. The death of the guardian without filing an account, and leaving no books of account or memoranda from which his indebtedness to the estate can be ascertained, does not give the common pleas court jurisdiction on the bond of the guardian to compel an accounting and payment to the ward of the amount found due him. 3. An allegation that under such circumstances the jurisdiction of the probate court is ineffectual for the purpose of obtaining an accounting, states a conclusion of law and not of fact to be taken as admitted on demurrer.