259 F. 450 | 6th Cir. | 1919
(after stating the facts as above).
We cannot yield to the suggestion that if the mayor had any intent to interfere with, or obstruct the adoption of, the new schedule, he was going to do so as an individual, and not as mayor. The charter' of Toledo is such that the mayor dominates the entire executive machinery. He directs the conduct of the police force as fully as he cares to do so, and whatever appprehension rightly existed had reference to the active or passive conduct of the police force or to some actual taking over or control of the entire system by, or at tire instance of, the city or the mayor, as mayor.
3. The court below did nothing which interferes in the slightest with the legislative power of the city.
The judgment creditors’ bill filed against the company, and, by amendment, against the city and the company, clearly presented a sufficent case of diverse citizenship. All the plaintiffs were citizens of New York and both defendants were citizens of Ohio. The only impeaching suggestion is that the bill was collusively filed. It appeared that Doherty & Co. owned the controlling interest in, and actually dominated, a corporation known as the Cities’ Service Company, and that the Cities’ Service Company owned and controlled the defendant company; but the utmost that can be inferred from this relationship is that the defendant company would do whatever Doherty & Co. desired, and would do nothing else; and, to state this result in the strongest terms and -apply it to this situation, is to say that the bill was filed in the court below with the consent of the defendant company, or even to say that Doherty & Co. and the defendant company agreed that it should be so filed, as the best move for the interests of both. If this constituted that collusion which is fatal to jurisdiction on the ground of citizenship, the court should not have entertained this bill nor any ancillary proceeding solely dependent thereon; but while it does indicate “collusion,” in the vague sense in which that word is, sometimes used, we think the law is clear that, unless there is something more, a District Court of the United States should entertain a case so presented.
It is settled for this court (and w'e do not mean to intimate any
Cases where plaintiff’s right to sue depends on the Ninety-Fourth Equity Rule (New Rules, 27) are of the consent class just mentioned. Certain good-faith action by the corporation is an essential preliminary, and it might be impossible to say that a company controlled by plaintiff had, in good faith, refused plaintiff’s request; but that is not this case. See Iron Moulders v. Niles Co. (C. C. A. 6, opinion filed Nov. 6, 1918) 258 Fed. 408, - C. C. A. -. The suit is not upon a claim assigned by a resident assignor, who continues the real party in interest, as in Miller & Lux v. East Side Canal & Irrigation Co., 211 U. S. 293, 29 Sup. Ct. 111, 53 L. Ed. 189; nor is it a colorable rearrangement of parties, as in Dawson v. Columbus Co., 197 U. S. 178, 25 Sup. Ct. 420, 49 L. Ed. 713.
Another view confirms this result. The city asks a receiver. While its petition is pending, and the company has so far escaped the full and general appointment, the city proposes to do acts which will compel the receivership, and then says the court has no power to enjoin such acts. Only in the clearest case could such an objection prevail.
It seems clear that the facts alleged in this pleading disclosed a proposed taking of the company’s property without due process of law. That an attempt to compel a public service company in this situation to give or continue service at a rate which does not permit a reasonable return, is in violation of the company’s constitutional right, is not open to question, since the decision in the Denver and Detroit Cases. Even when it turns out that the city is acting lawfully, jurisdiction is given over the whole case, if there is a substantial and good-faith claim of deprivation of constitutional rights. Columbus Co. v. Columbus (S. C. U. S., April 14, 1919) 249 U. S. 399, 39 Sup. Ct. 349, 63 L. Ed. 669. It is true that in the Denver, as also in the Detroit, Case, the city was (proceeding to enforce an ordinance; but the ordinance had not been accepted, and was important only as evidencing the city’s requirement that the service should be continued. Here, we have the same requirement evidenced both by the city’s petition in the cause, and by the mayor’s constant insistence that, “whatever happens, the cars will run.” In both cases, it was the executive action, not the legislative, that was enjoined. The constitutional prohibitions are not alone against any “law” of the forbidden scope; the Fourteenth Amendment reaches any_ action, by the representatives of a branch of the state, which unlawfully “deprives” the plaintiff of property rights.
From these views, it follows that the order appealed from should be affirmed.
Doubtless reasonable regulations as to manner of removal may be imposed or demanded, and, though it is not clear how the company’s right can be any less absolute than the city’s (Cleveland Case, 204 U. S. 116, 27 Sup. Ct. 202, 51 L. Ed. 399), it is not here necessary to consider whether there may be cases where an arbitrary and unreasonable discontinuance of service would not be permitted.
All seem to assume that ample legislative power has been delegated by the state to the city, and we accept that assumption.
The court below said: “The right of the city to eject the company cannot be questioned in any court. * * * If the city attempts to fix the rate of fare, it can only enforce such rates upon it by coupling therewith the alternative order that otherwise the company cease to do business. * * * It is the business of the city to pursue one of two alternatives: To say to this company, ‘Quit running your cars and get oif,’ or say to this company, ‘You will not be interfered with if you charge a rate of fare sufficient to pay * * * [net] six per cent.’ * * * This court decided * * * that the company could rej'ect unreasonable terms and at the same time continué its service with the' expectation of getting proper compensation * * * until the city affirmatively directed the company to leave the streets as an alternative to the acceptance of the unreasonable terms. * * * [The order will] leave the
In this opinion we use “confiscatory” and “giving less than a reasonable return” as entirely equivalent terms.
The city, by its supplemental answer and cross-bill, reserved its protest against the jurisdiction; but this protest referred to its formerly overruled claim of collusion, and not at all to the intervening delay.
After finding that the value of the property upon which a return should be computed was probably much more than §8,000,000, and that financial conditions in Toledo were the same as those found in the Denver Case, and hence that the net return should be at least §480,000, the court below continued:
“It seems certain that the very best that can be said for the city, under any circumstances, is to say this, and it is the clear indication of the evidence before us that a fare of five cents, with a one cent charge for transfer, will, under present circumstances, not pay the company’s operating expenses enhanced hy an increase of wages, and even this surplus. Indeed, the city, If we may judge from the character of its argument to the court, is not seriously combating this proposition. It does not argue anywhere in its brief that this rate is exorbitant. All the city now contends for is to try some lower rate of fare ny way of experiment and see what the result will be, although all the evidence before this court indicates most cleiarly that the mayor’s proposition of' eleven tickets for fifty cents, with free transfers, will not meet what is due the company.
“We are unable to see any right in the mayor to ask the company to submit to an experiment which present conditions show will be a losing one. From his testimony and the arguments submitted in behalf of the city, it does not appear that he had any confidence that this rate was adequate, for he says that, in fixing upon it, he was moved by the theory that the car rider, the carmen, and the car company each must sacrifice something in the present emergency. But the mayor of Toledo has no right to demand of this franchiseless company that it render service to the city at a sacrifice, nor has he the right to say to the employes of the company that they must work for less wages than their services are fairly worth. He ignores the fact that it is no sacrifice for the car riders of the city to pay any rate of fare which is what the service to them actually costs, and the economic truths that they should pay what the service to them costs, that the car men are entitled to a reasonable wage, and that the car company is entitled to a compensation which will allow it to live. No one has the right, whether an official or not, to ask either the carmen or the car company to make ‘sacrifices’ that the car riders may get service for less than cost, and, of course, the court can listen to no such proposition as that to support an insistence that an inadequate rate should be imposed.”