Nueces Valley Town-Site Co. v. McAdoo, 257 F. 143

Nueces Valley Town-Site Co. v. McAdoo

257 F. 143 | W.D. Tex. | 1919

WEST, District Judge

(after stating the facts as above). [1] It is not seriously questioned that the suit arises under the Constitution and laws of the United States. It is brought directly against the Director General of Railroads, and the petition clearly alleges that the Director General, his agents and employés, acting in behalf of the government of the United States, pursuant to the acts of Congress and proclamations of the President, are in the actual control and operation of the - properties. The petition alleges that the state of war which induced the passage of the acts of Congress had ceased, and that there is no further necessity for such control, alleging also ■that the acts of the Director General in undertaking to change the location of certain of his employés are not to the public interest and are in violation of a certain alleged contract made with the corporation owning the railroad properties, which it is contended is binding upon the Director General and has effect to limit his right of control of the railroad properties in his possession.

That such a suit is one arising under the Constitution and laws of the United States is clear. It has been often held that suit by or against a corporation of the United States is a suit arising under the Laws of the United States. Osborn v. U. S. Bank, 9 Wheat. 738, 6 L. Ed. 204; Pacific Railroad Removal Cases, 115 U. S. 1, 5 Sup. Ct. 1113, 29 L. Ed. 319. In these cases it is said that the charter of incorporation, not only creates it, but gives it every faculty which it possesses. The power to acquire rights of any description, to transact business of any description, to make contracts of any description, to sue on those contracts, is given and measured by the charter, and that such charter is a law of the United States. All the faculties and capacities possessed by federal corporations are derived from their acts of incorporation, and all their doings arise out of those laws, and therefore suits by and against them are suits arising under the laws of the United States. Here the Director General, under the acts of Congress and the President’s proclamations, is placed in the exclusive possession of, and is engaged, under the terms of the acts of Congress and the President’s proclamations, in the direction, control, and operation of the properties. Every power which he exercises and every right which he has is derived from the laws of the United States.

The tenth section of the Act of March 21, 1918, c. 25 (Comp. St. 1918, § 3115%j), specifically provides that no process, mesne or final, shall be levied against any property under federal control; and the *147eleventh section (section 3115%k) makes it penal for any person to interfere with or impede the possession, use, operation, or control of any railroad property taken over by the President. The petition unequivocally shows that the purpose of the suit is to interfere with the possession, control, and operation of the property by restraining the Director General from removing telegraphers and other employes from one place on the property to another place, and thereby take the management and control of the property out of the hands of the Director General and place it in the control of the district court of Atascosa county. In Bryant v. Robinson, 149 Fed. 321, 79 C. C. A. 259, it was held that a suit against a postmaster, growing out of his acts as a postmaster, arose under the Constitution and laws of the United States. In Bachrack v. Norton, 132 U. S. 337, 10 Sup. Ct. 106, 33 L. Ed. 377, an action on a marshal’s bond to recover damages for wrongful levy of an attachment issued out of the Circuit Court of the United States arose under the Constitution and laws of the United States. See, also, Feibelman v. Packard, 109 U. S. 421, 3 Sup. Ct. 289, 27 L. Ed. 984; Sonnentheil v. Moerlein Brewing Co., 172 U. S. 401, 19 Sup. Ct. 233, 43 L. Ed. 492. The underlying principles of the federal jurisdiction are clearly and ably discussed in Re Neagle, 135 U. S. 1, 10 Sup. Ct. 658, 34 L. Ed. 55.

In United States Railroad Administration v. Burch (D. C.) 254 Fed. 140, the proposition was directly involved and directly ruled upon. A judgment had been obtained against the Atlantic Coast Line Railroad Company in a state court of South Carolina, after assumption of government control, upon a cause of action arising prior to that period. It had been levied upon certain real estate, and the Director General brought suit in the District Court of the United States to enjoin further proceedings under the execution. The jurisdiction of the federal court was contested, but sustained; Judge Smith (page 145) saying:

■‘The defendant in his return to the rule has raised the question that this court has no jurisdiction of the canse, and cannot enjoin a sale under execution under a judgment in a state court. Inasmuch as this question is a question arising in a case which asks for the enforcement of a right claimed to exist and be given under the terms of an act of Congress, it is evidently an action of a civil nature in equity, brought by an officer of the United States authorized to sue, and arising under the laws of the United States, where it appears upon the face of the bill of complaint that the right claimed by the plaintiff and sought to be enforced arises by virtue of and under a statute of the United States. The question whether or not final process can be levied against this property is one that arises under the very terms of the act of March 21, 1918; nor is the position that this court has no jurisdiction to slay the execution of a judgment recovered in the state court well taken. It has been laid down ihat the United States courts, by virtue of their general equity powers, have jurisdiction to enjoin the enforcement of a judgment in the state court upon usual principles under which courts of equity will enjoin the enforcement of a judgment. Simon v. So. Ry. Co., 236 U. S. 115, 35 Sup. Ct. 255, 59 L. Ed. 492. * * *

“Further, the special statutory exemption from process, created by the act of March 21, 1918, must be construed in connection with the provision of section 265 of the Judicial Code of the United States [Comp. St. § 1242], as modifying the language of that section, and creating another exception, under which the attempted enforcement of the mesne and final process from a state court may be restrained in proper cases.”

*148While the relief sought in that case was denied upon the ground that the property levied upon was not in the possession of the Director General, the jurisdiction of the court to issue the injunction was clearly sustained.

[2] The act of March 21, 1918, specifically prohibits the interference with the possession of the Director General of the property by any process, mesne or final, and the control of the operation of the road by restraining order,or temporary or permanent injunction is as much an interference with that possession and control as if the • roadbed were levied upon by attachment or execution.

[8, 4] It is contended, however,, that the provisions of section 10 of the act of March 21, 1918, to the effect that carriers under federal control shall be subject to all laws and liabilities as common carriers whether arising under state or federal laws, or at common law, except in so far as may be inconsistent with the provisions of that act or any other act applicable to such federal control or any other order of the President.; that actions at law or suits in equity may •be brought by and against carriers and judgments rendered as now provided by law, and that in any action at law or suit in equity against the carriers no defense shall be made thereto upon the ground that the carrier is an instrumentality or agency of the federal government, nor shall any "such carrier be entitled to'have transferred to a federal court any action instituted by or against it which action was not transferable prior to federal control, etc., operate to change the rules heretofore established and indicate an intention upon the part of Congress to limit the jurisdiction of federal. courts under preexisting laws. It is sufficient answer to this contention to say that any law or liability or asserted liability which would operate .to take the possession of the property out of the hands of the United States government would be inconsistent with the act of March 21, 1918, and inconsistent with the orders of the President by and under which he has assumed full possession and control of tire properties. It is a further complete answer to this contention that this suit is-not against the San Antonio, Uvalde & Gulf Railway Corporation, the owners of the properties, but is a suit direct against the agent of the President and of the Secretary of War. It is not a suit which involves any common carrier. liability either of the owning corporation or of the Director General, but is a suit against the Director General directly involving his right to direct and control the operation, of the property in his possession.

[5, 6] The proposition is made that the amount in ’ controversy does not exceed $3,000. The petition for removal shows that the amount in controversy exceeds $3,000 exclusive of interest and costs. In addition to this, it is shown that the saving to the Railroad Administration by reason of the acts sought to be enjoined will be at least $400 per month. The act of Congress provides that the period of government control shall extend until 21 months after peace is declared. The court judicially knows that peace has not been declared and the fact that the President has power to relinquish any system from governmental control cannot affect the proposition that the period of control is fixed by section 14 (Comp. St. 1918, § 3115%n) *149for the period mentioned; that is to say, for 21 months after the termination of the war. It sufficiently appears, therefore, that the amount in controversy is in excess of $3,000, exclusive of interest and costs.

It follows from the foregoing that the motion to remand must be overruled.

[7] The allegations of the petition, the sworn statements of the answer which are not denied, and the evidence presented by affidavit show without controversy that the purpose of the Director General, the execution of which purpose is suspended by the restraining order, is merely to remove a division superintendent and several telegraph operators, on the railroad property involved, from North Pleasanton to San Antonio where they will engage in joint work for this property and another railroad property also under the control of the_ government, from which will result economy and increased efficiency of operation. Should the state court prevent the Director General from transferring his employes from one point to another, and from regulating their duties it would, to that extent, be to take the control, possession, use, and operation of the properties out of the hands of the Director General in contravention of the terms of both sections 10 and 11 of the act as well as the entire spirit and purpose of the act. No court, either state or federal, can interfere with or control the discretion of the Director General as to the ^operation of these properties, and any action directly interfering with his possession and control of the property is specifically forbidden by Congress.

[8] It is contended, however, that section 15 of the act (Comp. St. 1918, § 3115%o) which is to the effect that it shall not be construed to impair the lawful police regulation of the state has the effect to subject the possession of the government to the operation of such state statutes as article 6423 which provides that the general offices of every railroad company chartered in this state shall be maintained permanently at the place named in its charter or at such place as it shall have contracted or agreed to maintain them. The proper construction of section 15 is that ordinary police regulations of the state shall remain effective, except in so far as the same are in conflict with the plain and express provisions of the act of Congress. Under that act, the possession, use, control, and operation of the railroad property is placed with the government and its officers, and no state regulation inconsistent with such evident purpose can be effective. It may be said, however, in this connection that article 6423 upon which complainant relies applies to the corporation which is not a party to this suit, and further that it has no application to divisional headquarters, and makes reference only to general offices and to machine shops, neither of which arc involved in this case. As to whether a mere recitation in the deed to the San Antonio, Uvalde & Gulf Railroad Company as a consideration that that corporation agreed to permanently maintain its division headquarters at North Pleasanton is a contract which could be specifically enforced against the corporation, if it were in possession of the property itself is not decided: Article 6423 affords no justification whatever for the enforcement by *150injunctive'process against the Director General of a contract made with the corporation to maintain divisional headquarters at a particular point. The Constitution of the state of Texas forbids the consolidation of parallel and competing railways. This constitutional provision doubtless rests upon the broad police powers of the state. Nevertheless all of the railways of the state are, under the act of Congress, consolidated for the period declared in the act for the purpose of governmental operation, and it is not thought that the acts of the Director General in effecting this consolidation or other■wise in the control, use, and operation of these properties can be controlled by an appeal to the police powers of the state.

The motion to dissolve the restraining order must be sustained.