Southern Ry. Co. v. Railroad Commission, 196 F. 558

Southern Ry. Co. v. Railroad Commission

196 F. 558 | M.D. Ala. | 1912

JONES, District Judge

(after stating the facts as above). The Attorney General and the special counsel representing the Railroad Commission and the counsel for the complainants in the several cases jointly ask the dismissal, without prejudice, of the suits heretofore brought respectively by the complainants to enjoin the execution of the Passenger Rate Act and the 110 Commodities Act, and as ancillary thereto a decree süspending or abrogating the liability upon the injunction bonds given by the complainants.

[1-3] Liability upon an injunction bond in the federal courts is never fixed until a final decree in a cause, and when a condition of things arises where there can be no decree upon the merits of the controversy, or it would not be just to compel the parties to proceed to a final decree, as where they have agreed among themselves, it is the settled doctrine of the Supreme Court of the United States (Russell v. Farley, 105 U. S. 433, 26 L. Ed. 1060) that a court of equity has power, and if necessary' should exercise it, to compass the ends of justice in such a situation, by modifying or relaxing the conditions of an injunction bond or suspending the right of action thereon. Legally speaking, a rate statute must be held good until it is shown by the proof, as applied to a particular carrier, that the statute will prevent a fair and reasonable return upon the value of the property employed in the service, and until that is shown the rate statute must be held to be prima facie valid, and if it be after-wards repealed, shippers and passengers, as to transactions completed while it 'was in force, in the absence of a judicial condemnation of the rates, have a vested right of action against the carrier for any excess charges above those allowed by the repealed statute while it was in force. Central of Georgia Railway Co. v. Railroad Commission of Alabama et al. (C. C.) 161 Fed. 979.

[4] The question then is: Ought the court to compel either the complainants or the respondents to incur the. enormous expense of taking proof to show the effect of the Passenger Rate Act and the 110 Commodities Act, both of which acts must be considered as- an entirety as to their results, when it is practically admitted that they were unreasonable, by the fact that, when complaint was made of the insufficiency of these statutes, the state authorities increased the freight rates and authorized an increase of cent Per mile in the passenger rate, and, when at the time the order for the injunction was granted, the proof, which was the only proof ever, introduced in the case,, abundantly. showed the insufficiency of the rates complained" of as an entirety, and when the court is also satisfied from the- proof made in cases already decided, contesting these statutes, under substantially ■ similar conditions, that the rates in fact were confiscatory.

*561The interlocutory injunction issued on March 30, 1907, was modified at the request of these compiainauis to the extent of permitting them to “observe, pending the final hearing and determination of the causes, the rates” in question; but “without prejudice to the jurisdiction of the court in the cause or to the complainant’s right to the relief sought in the suit.” Under the letter of their agreements with the state authorities, the carriers would have the right, notwithstanding thqir observance of the rates in question, for the purpose of making an actual trial of them, still to obtain relief on the facts of the case. For the reasons stated, it now appears that complainants would be entitled to relief if they prosecuted their suits, and the real question is whether, under the circumstances, a court of conscience ought to compel the parties to litigate to avoid or to fix a liability which exists only in legal fiction and not in fact, when both sides are convinced no useful purpose would be subserved thereby. While the injunction bond was exacted under the equity powers of the court, which was not bound by the terms of the statute that no suit should be brought upon tlie bonds except upon tlie order of the Governor, yet the court cannot overlook the fact that the faith of the state was pledged, so far as the Governor and the Railroad Commission could pledge it, that complainants, when they accepted the increased compromise rates, should not be held to any legal liability upon the injunction bonds given by them on the contest of the original rates, or that complainants, in assenting to a temporary trial of the original statutory rates prior to the compromise allowing them increased rates, which was approved and carried into effect by the enactment of the Eight Group Acts, were endeavoring, in a very excited-and troubled condition of the public mind, to make some adjustment as to rates which would tranquilize public sentiment and conform to the decision of the state authorities, whose judgments as to the reasonableness of the carriers’ charges for their service are binding until set aside by. tlie courts.

in an action at law the plaintiff, no matter what the inconvenience to the defendant, may dismiss his suit even against the objection of the defendant without incurring any liability except for costs, at any time before it is finally submitted to the tribunal in which the controversy is pending. I know of no case where a court of law has power to retain a case when both parties agree to its dismissal. So also in a court of equity, the complainant and defendant may by consent generally dismiss their case without incurring any liability on injunction or other bonds taken in the proceedings. The only cas.e in which litigants in equity will not be permitted to compromise their differences, and dismiss a suit without prejudice, is where they occupy trust relations to others whose rights would be injuriously affected or destroyed by a consent decree dismissing the litigation absolutely, and in such cases a court of equity will make proper provision in the order of dismissal for the protection of their rights. Shippers and passengers, in litigation waged with public authorities who fix rates, are quasi parties to the suit. The rate-making authorities are in a large sense trustees for them in litigation *562concerning the reasonableness of rates, and when they ask and consent to the dismissal of such a suit, the court ought not to question their action, unless it can see that it is clearly improper. In this matter, the state authorities, who are the chosen guardians of the rights of the public in this respect, are evidently acting in good faith and with high motives, and joining, as they do, in asking the relief now sought by all the parties to the litigation, the court has no hesitation in granting their joint request. Under the circumstances of these cases, the court cannot see that a dismissal of these suits and a suspension or abrogation of any right of action on the injunction bonds will impede or prejudice any real right of shippers or passengers, and it will therefore make an order providing for the cancellation of the injunction bonds, the - dismissal of the suits at the complainants’ cost, without prejudice, but saving to every passenger and shipper, who paid excess rates while' the legislation complained of was in force, the right to sue the several complainants at law on their original cause of action.

[5] The court has preferred to rest its decision upon the merits of the case; but there is another reason, based upon the condition of the injunction bonds, why, in the absence of any determination that the rates complained of are unjust or unreasonable, no right of action can arise upon the injunction bonds. That condition is:

“Should said injunction be dissolved or vacated, as having been wrongfully issued, or should it be hereafter determined that the rates, or any of them, whose enforcement is sought to be enjoined * * * should be or should have been enforced,” then complainant shall “pay or cause to be paid all loss or damage caused by the issue of said injunction,” and in such event the “obligation to be void, otherwise to remain in full force and effect.”

There has never been any determination in the causes dissolving the injunction as “wrongfully issued,” or that the rates “whose enforcement is sought to be enjoined should be enforced” or should not have been enjoined or suspended. By the very terms of the bond no liability could arise upon it until the happening of some of these events, and none of them have happened. Nashville, Chat. & St. Louis R. R. Co. v. Railroad Commission et al. (C. C.) 171 Fed. 223.