Chase National Bank v. City of Norwalk
291 U.S. 431 (1934)

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U.S. Supreme Court

Chase National Bank v. City of Norwalk, 291 U.S. 431 (1934)

Chase National Bank v. City of Norwalk

No. 290

Argued January 18, 19, 1934

Decided March 5, 1934

291 U.S. 431

Syllabus

1. An injunction may not extend to persons who merely acquire notice of it but who are neither parties to the suit nor confederates or associates of the defendant. P. 291 U. S. 436.

2. A decree against a mortgagor with respect to property does not bind a mortgagee whose interest was acquired before the commencement of the suit and who was not a party to it. P. 291 U. S. 438.

3. In quo warranto brought by the state at the request of a city, but to which, under the state law, the city could not be made a party, there was a judgment of ouster against an electric power company using the city streets, upon the ground that its franchise, which it claimed to be perpetual, had in truth expired.

Held:

(1) That the trustee under an antecedent mortgage claiming a valid subsisting lien on the company's property, including the franchise which it claimed to be perpetual, and who was not a party to the quo warranto proceeding, was entitled to come into the federal court in a suit against the city alone, on the ground of diversity of citizenship, to protect its alleged property rights and to have its claims there adjudicated. P. 291 U. S. 437.

(2) That a decree in the suit enjoining the city, its attorneys, agents and confederates (a) from removing the poles and wires without state warrant, and (b) from attempting to induce the state to enforce the judgment of ouster would not be an injunction staying the proceedings in the state court within the meaning of § 265 of the Judicial Code. P. 291 U. S. 439.

4. Though one seeking an injunction against a judgment on the ground of fraud or mistake should show that he had no opportunity to correct the judgment in the original proceeding and was not lacking in diligence, such a showing is unnecessary where, because

Page 291 U. S. 432

he was neither party nor privy, the judgment was inoperative as to him. P. 291 U. S. 440.

5. Where the Circuit Court of Appeals has erroneously directed the dismissal of a suit without passing on the merits, the cause will be remanded to that court for further proceedings. P. 291 U. S. 441.

63 F.2d 911 reversed.

Certiorari, 290 U.S. 614, to review a decree reversing a final decree of injunction in a suit brought by the bank, as trustee of bondholders of an electric power company, to prevent the city from removing its poles and wires from the streets and from seeking to enforce a decree of ouster secured by the state against the mortgagor company.

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