Kline v. Burke Construction Company

260 U.S. 226 (1922)

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Nature of the Case

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Facts

P brought an action at law against Ds in District Court. The jurisdiction of that court was invoked upon the ground of diversity of citizenship. The action was for breach of a contract between the parties, whereby P had engaged to pave certain streets in the town of Texarkana. A trial was had before the court and a jury which resulted in a disagreement. Subsequent to the commencement of the action by P, Ds instituted a suit in equity against P in a state chancery court of the State of Arkansas, upon the same contract, joining as defendants the sureties on the bond which had been given for the faithful performance of the contract. The bill alleged that P had abandoned its contract and judgment was sought against the sureties as well as against P. The bill asked for an accounting with reference to the work which had been done and which remained to be done under the contract and prayed judgment in the sum of $88,000. In P's action, Ds filed an answer and cross-complaint, setting up, in substance, the same matters which were set forth in their bill in the state court. In the equity suit, P filed an answer and cross-complaint, setting up the matters charged in its complaint in the action at law. Thus the two cases presented substantially the same issues, the only differences being those resulting from the addition of the sureties as parties defendant in the equity suit. Both actions were in personam, the ultimate relief sought in each case being for a money judgment only. The equity suit was removed to the District Court upon the petition of P on the ground that the P and Ds were citizens of different States and that the controversy between them was a separable controversy, and upon the further ground that a federal question was involved. Ds moved to remand. The District Court sustained the motion and the equity suit was thereupon remanded to the State Chancery Court, where it is still pending. After the mistrial of the action at law in the District Court, P filed a bill of complaint as a dependent bill to its action at law, by which it sought to enjoin Ds from further prosecuting the suit in equity. The District Court denied the injunction. P appealed. The appeals court reversed and remanded the case with instructions to issue an injunction against the prosecution of the suit in equity in the State Chancery Court. Ds appealed.