Citations
- 229 F.2d 622
Full opinion text
HASTIE, Circuit Judge.
The plaintiffs in this action, appellants here, are a Chicago brokerage and trading firm, Ketcham & Nongard, and the three individuals who are its members. They have sued Burlington County Bridge Commission, a corporate public agency of the State of New Jersey, and David Connelly and William Wells, receivers appointed by the Superior Court of New Jersey to collect from these plaintiffs and others personal money judgments entered against them in the case of Driscoll v. Burlington-Bristol Bridge Co., 1950, 10 N.J.Super. 545, 77 A.2d 255, modified on appeal, 1952, 8 N.J. 433, 86 A.2d 201.
In our recent opinion in B. J. Van Ingen & Co. v. Connolly, 3 Cir., 1955, 225 F.2d 740, we had occasion to summarize the matter involved in Driscoll v. Burlington-Bristol Bridge Co. We said:
“ * * * The New Jersey suit was instituted by the Governor on behalf of the people of that State to invalidate transactions whereby a public agency, the Burlington County Bridge Commission, purchased certain toll bridges at an excessive price pursuant to a scheme conceived and engineered by a group of adventurers to obtain an unjustified profit of some three million dollars at the ultimate expense of the traveling and toll-paying public. The New Jersey court found that an involved series of financial transactions did yield such an improper profit. It also found that Tuthill Ketcham, Richard Nongard and Rowland Murray, who are partners and the sole members of the brokerage and trading firm of Ketcham and Nongard, were members of the wrongdoing group. In addition, the partnership was found to have participated actively in the illegal transactions. The decree, as modified pursuant to the mandate of the Supreme Court of New Jersey on appeal, obligated the wrongdoing individuals to pay $3,050,347 to the Burlington County Bridge Commission. Certain wrongdoers, among them Tuthill Ketcham and Richard Nongard, were made liable for the entire sum. The third partner, Rowland Murray, was made liable for $76,258.68.” 225 F.2d at page 741-742.
For present purposes it may be informative to add that the money judgment of approximately $3,000,000 was the gross yield of the scheme to those who engineered it, allowing them no credit for certain services and transfers which they assert as valuable contributions by them to the bridge commission during the execution of the scheme.
Federal jurisdiction in the present suit is predicated upon diversity of citizenship and the additional fact that an issue is framed under the due process clause of the Fourteenth Amendment. In one count, the relief sought is an injunction to restrain the defendants from “collecting the judgment in the aforesaid action” together with a declaratory judgment that the state judgment is invalid as countervening the due process clause.
A separate count seeks a money judgment for $1,240,000, an amount allegedly supplied by the plaintiffs to the bridge commission as consideration for bonds which were subsequently invalidated by the aforesaid judgment of the New Jersey Superior Court. Plaintiffs set this claim up as a separate and distinct matter, not covered by the New Jersey suit.
In advancing their present claim for injunctive and declaratory relief in a federal court the plaintiffs cannot deny that the New Jersey action was an equity, proceeding charging them as defendants with conspiracy, fraud and the ex-er