Boston & Maine Railroad v. Delaware & Hudson Co.

The plaintiff is a railroad corporation, formed in 1919 by the consolidation of the Fitchburg Railroad Company, the Boston and Maine Railroad and six other corporations. In 1916 the Fitchburg Railroad Company and Boston and Maine Railroad were named as defendants in an ejectment action, which the Mechanic-

The Mechanicville and Fort Edward Bailroad Company, named as the plaintiff in that ejectment suit, was incorporated in 1880. It acquired some real property and railroad franchises. It never issued any stock or held a stockholders’ meeting. The directors named in its articles of association held one meeting in 1880 and another meeting in 1881. It was financed by the Delaware and Hudson Company, and, so far as it had any corporate existence, it was treated as a subsidiary and directed and controlled by that company. In 1894 notice was sent to the State Board of Bailroad Commissioners that it was “ defunct ” and had abandoned its charter. Attempt was made to revive it in 1915. Then two of the thirteen directors, named thirty-five years earlier in the articles of association, met and, claiming to act as a majority of the surviving directors, went through the form of filling vacancies in the board of directors. The new board of directors, so chosen, assumed to adopt by-laws and to authorize the issue to the Delaware and Hudson Company of stock of the par value of $54,000 for an alleged indebtedness of that amount due to it.

The decision rendered in the ejectment action of 1916 contains findings of fact in regard to these matters. The court found, also, that the Mechanicville and Port Edward

Since the court had sustained the plea in abatement that the “ plaintiff has not the legal sue,” decision upon the merits of the other issues raised by the answer to the complaint might have been postponed till an action was brought by some person who had capacity to sue. These issues had, however, been litigated by the parties, and, perhaps for the purpose of avoiding litigation of the same issues thereafter, the court made findings and conclusions of law, also, upon such issues. In brief, the court held that the action was barred by the twenty-year Statute of Limitations; that the corporate existence of the Mechanicville and Fort Edward Railroad Company was automatically terminated by its failure to complete and operate a railroad within the period fixed by law, and that then title to real property which had been acquired by the railroad company through condemnation proceedings reverted to the original owners, and that title to some other parcels of real property included in the complaint was in the defendants named in the action.

The judgment of dismissal in the ejectment action brought in 1916 constitutes unquestionably a bar to any other ejectment action for the same property which the Mechanicville and Fort Edward Railroad Company might attempt to bring. If fife and capacity to sue was not ended before the original ejectment was begun, then it has had its day in court, and opportunity to litigate its rights on the merits. If fife and capacity to sue was ended, then no new action could be brought by the same dead plaintiff. Thus, in either event, the judg

In its first attempt to invoke the exercise of the equitable powers of the court, Boston and Maine Railroad was partially successful, but partial success did not, in its opinion, furnish adequate protection of its rights. At that time, judgment of dissolution of the Mechanicville and Fort Edward Railroad Company had been granted upon the default of that company in the dissolution action. Promptly the receiver, appointed in that action, brought an action in ejectment

We are not here concerned with that decision of the Appellate Division. The Delaware and Hudson Company acquiesced in it, and upon its ex parte application the judgment in the dissolution action was vacated. At the same time it sent a stipulation to the Boston and Maine Railroad, consenting to its appearance in that action “ with all such rights and privileges as can be granted to any party to a litigation in a court of record.” Boston and Maine Railroad was not satisfied with that stipulation and began a new action in equity against the Delaware and Hudson Company to enjoin it from further prosecuting the dissolution action and to enjoin it from “ commencing or prosecuting, or procuring or suffering to be prosecuted any action at law, suit in equity or special proceeding wherein it shall be asserted, claimed or alleged that the Mechanicville and Fort Edw-ard Railroad Company has any right, title or interest of, in or to any part of the railroad premises ” which were the subject of the original ejectment action. After trial the complaint in the second equity action was dis

The complaint contains no allegations from which it can be inferred that the Delaware and Hudson Company is threatening to do any wrong to Boston and Maine Railroad, unless it be a wrong to compel a party to defend a cause of action upon which a court has already passed judgment. A suit in equity will not lie to restrain the prosecution of another action, where the relief asked for in the equity action may be obtained by a proper defense of the action sought to be enjoined. (Savage v. Allen, 54 N. Y. 458 ; Colson v. Pelgram, 259 N. Y. 370 .) Argument, if sustained, that the judgment in the ejectment action, brought in 1916, constitutes a bar to any other action involving the same property, which might be brought by the receiver of the original plaintiff, thus would lead to the conclusion that no action in equity will he to enjoin the bringing of the action. On the other hand, if the judgment in the prior action would not bar a new ejectment action by the receiver because in the earlier action no judgment on the merits could be rendered, then certainly a court of equity may not enjoin the commencement or prosecution of an action before a tribunal with jurisdiction to pass upon the merits.

We are told that here the Delaware and Hudson Company, though not a party to the original ejectment suit, is yet bound by the decision to the same extent as the parties to the action, because it instigated, directed and controlled that suit. We may assume, without deciding, that the Delaware and Hudson Company is so bound, for, even so, the judgment cannot be given force and effect beyond its scope. A judgment by a court which has jurisdiction of the parties and of the subject-matter of the action is binding upon the parties to the action, and, under some circumstances, also upon others; but a judgment rendered by a court without jurisdiction of the parties is not binding upon them or any other person.

To escape these conclusions, the Boston and Maine Railroad urges that in an ejectment action brought by a receiver, it cannot collaterally attack a judgment which provides for the appointment of the receiver. Therefore, it is said that the plaintiff may properly invoke the equitable powers of the court to enjoin Delaware and Hudson Company from the appointment of a receiver of Mechanicville and Fort Edward Railroad Company as a preliminary to the commencement of an ejectment action, after the court, in an earlier action, decided that the life of that corporation was extinct. The argument is based upon two assumptions that are fallacious: First, it assumes that the judgment in the original ejectment action constitutes a conclusive adjudication that no receiver may be appointed of Mechanic-ville and Fort Edward Railroad Company in the dissolution action brought by Delaware and Hudson Company, and second, it assumes that Boston and Maine Railroad, because it is not a necessary party to the dissolution action, cannot in that action interpose a defense of prior adjudication.

After the complaint in the equity action was dismissed, Delaware and Hudson successfully prosecuted the dissolution action to judgment. In that action Boston and Maine had, by consent of Delaware and Hudson, the right to appear and urge every defense, including that of prior adjudication. For that, no decree of a court of equity was needed. In our opinion, rendered

Finally, we are urged to reverse the judgment dismissing the equity action on the ground that the court of equity should take jurisdiction of all questions which may arise as to the scope and effect of the prior adjudication in the ejectment suit, in order to prevent a multiplicity of actions which might otherwise ensue. Doubtless where the equitable powers of the court have been successfully invoked on other grounds, the court may, frequently, in one action, grant complete relief which, otherwise, might be obtained only through multiplicity of actions. Here the plaintiff seeks to invoke the equitable powers of the court to prevent multiplicity of action, not as ancillary to its power to grant complete relief in a case where equity has assumed jurisdiction on other grounds, but as an independent source of diction, creating a novel equitable right of action. It is said that this action is analogous to an action to quiet title or for a bill of peace. The analogy is quite imperfect, and precedent for an action in equity to prevent a multiplicity of other suits is lacking. (1 Pomeroy on Equity Jurisprudence [4th ed.], § 250.) Here it is, indeed, doubtful whether the question of the scope and effect of the prior adjudication could not be litigated more speedily and conveniently in the threatened actions at law than in an action brought to restrain the prosecution of such actions.

The judgment should be affirmed, with costs.

Crane, Ch. J., O’Brien, Hubbs, Crouch, Loughran and Finch, JJ., concur.

Judgment affirmed.