46 F. 888 | U.S. Circuit Court for the District of Eastern Missouri | 1891
(orally.) The matter that has been under consideration for some days past in this case, is an application for an injunction pen-dente lite to restrain the Atchison, Topeka & Santa Fe Railroad Company, hereafter called the “Atchison Company,” from voting certain shares of stock which it has acquired in the St. Louis & San Francisco Railway Company, hereafter called the “Frisco Company.” The case in all of its aspects has been very thoroughly argued, and the discussion has embraced some questions, particularly the question as to the meaning of the word “control,” as used in the constitution and statutes of this state, which the court deems it unnecessary to decide.
1 shall content myself with a brief statement of the conclusions which I have formed on some of the more vital questions involved, and, for want of time, shall be compelled to do so mainly without amplification or argument. The complainants, who are stockholders of the Frisco Company, base their right to relief on the ground that it was unlawful for the Atchison Company to acquire stock in the Frisco Company, or, at least, to acquire a majority of its stock. If this contention fails, complainants, as a matter of course, are without right to relief, and all other subsidiary and collateral questions become immaterial.
1. I entertain no doubt of the fact that the Atchison Company had, under its charter and the laws of the state of Kansas, as construed by its highest court, (Railroad Co. v. Fletcher, 35 Kan. 236, 10 Pac. Rep. 596; Same v. Cochran, 43 Kan. 225, 23 Pac. Rep. 151; Venner v. Railroad Co., 28 Fed. Rep. 581,) the requisite power and authority to make a valid purchase of Frisco stock, either much or little, unless such purchase -was prohibited by the laws of the state of Missouri, under which the Frisco Company was incorporated; and it goes without saying that the Atchison Company could not make a valid purchase of the stock of a Missouri corporation in contravention of the laws of the state of Missouri. The question whether the purchase of the stock was ultra vires when tested by the laws of Kansas, where the Atchison Company was incorporated, is therefore eliminated from the controversy, and the transaction will be considered in the light of the constitution and laws of the state of Missouri.
2. The view that the court entertains of section 17, art. 12, of the constitution of Missouri, and of section 2569 of the Revised Statutes of the state, which, as it is claimed, rendered the purchase of stock in the Frisco Company unlawful, may be substantially stated as follows: The prohibition contained in the statute (section 2569) is clearly aimed at railroad companies “owning, operating, or managing a railroad in the state of Missouri.” If a railroad company owns, operates, or manages a rail
The evidence before me discloses the fact that the Atchison Company had abandoned its purpose of constructing the Colorado road beyond Union before it purchased or determined to purchase the Frisco stock. It shows that the Colorado road and the Frisco do not touch any two common points; that between the two roads, for more than 40 miles, the Missouri Pacific Railroad is interposed; that the Colorado road is in reality a suburban road; and that not more thán 1 per cent, of its traffic, which is, in the aggregate, infinitesimal, when compared with the traffic over the Frisco, would, in any event, pass over the Frisco. All of these considerations lead me to the conclusion that the Colorado road was not a competing line, within the meaning of the statute, and that the Atch-ison Company was not disqualified from purchasing the Frisco stock, even though it be conceded that it operated and managed the Colorado road at the time of the purchase.
8. The next question that I have considered, and with a due appreciation of its importance, is whether the constitutional inhibition contained in section 17, art. 12, is any more comprehensive than the statutory prohibition last considered. According to the view that the court takes of the case it cannot, or at least it ought not, to grant an injunction, unless it clearly appears that the general assembly has failed to give full effect to the constitutional prohibition, nor unless it appears that the purchase of. the Frisco stock is in violation of the constitution, though not in violation of the statute. It is sufficient to say on this point that the court is not prepared to hold that the general assembly has either misconstrued section 17, art. 12, of the constitution, or that it intentionally failed to give it full effect when it enacted section 2569 of the Revised Statutes. On the contrary, I have no doubt that the
From the views which I have thus outlined/it follows that I must decline to grant an injunction, because the purchase of the Frisco stock was not, in my judgment, in contravention of the statute, and because it is by no means certain that such purchase was prohibited by the constitution. In a case of this character it can hardly be expected that the court will allow an injunction, thereby jeopardizing great interests, upon a construction of the constitution that is certainly doubtful, and that is at the same time contrary to the construction that has been adopted, and, as it would seem, deliberately, by the general assembly of this state.
The motion for an injunction is accordingly overruled.