Love v. Atchison, T. & S. F. Ry. Co.

• Decision Date: 29 March 1911
• Docket Number: 3,461.,3,333-3,335,3,460,3,368,3,369
• Parties: LOVE et al. v. ATCHISON, T. & S.F. RY. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

185 F. 321

LOVE et al. v. ATCHISON, T. & S.F. RY. CO.

Nos. 3,333-3,335, 3,368, 3,369, 3,460, 3,461.

United States Court of Appeals, Eighth Circuit.

March 29, 1911

Syllabus by the Court.

Railroad companies, that have been, are, or will be deprived of parts of their property devoted to the public use of transportation without just compensation during the continuance of the rate-making process by provisions of a state Constitution, or of a state law, or by orders of a state commission prescribing tentative rates and putting them in effect during the rate-making process under severe penalties, may maintain suits for and obtain relief by injunction during the continuance of the rate-making process to the same extent that they may after the process is complete.

It is as much a violation of the fourteenth amendment to the Constitution to take the property of a railroad company without just compensation during the process of rate-making as it is after the completion of that process.

Where within 20 months by a provision of a state Constitution passenger fares were reduced 33 1/3 per cent., and by a series of about a dozen orders of its Railroad Commission made at different times freight rates on about 40 per cent of the intrastate freight business of the railroad companies were reduced about 40 per cent., a bill is not demurrable or defective which avers that the passenger rate prescribed is confiscatory and that the effect of the freight rates fixed is to take the property of the complainant without just compensation, although the bill contains no averment that each order, taken by itself, is confiscatory.

The necessary effect of a body of rates prescribed by a series of orders effective at different dates within a few months is the same as that of a single order prescribing all the rates at the same time, and it may be so pleaded and tried.

The apportionment on the revenue basis of the values of the Oklahoma properties of the railroad companies to their different classes of business, and the distribution on the same basis of the items of common cost between their interstate and their intrastate business, in order to ascertain the net returns they received and would receive from the challenged fares and rates, were sustained by the great weight of the evidence in this case, by reason, and by authority, and they are approved.

Granting or refusing a temporary injunction is intrusted to the discretion of the court of original jurisdiction, not to the discretion of the appellate court.

In the absence of errors of law, the action of the court of original jurisdiction must be sustained, unless there is clear proof of abuse of its discretion.

If the questions presented in a suit for an injunction are grave and difficult, and the injury to the moving party will be certain, great, and irreparable if the motion for the interlocutory injunction is denied and the final decision is in his favor, while if the decision is otherwise, and the injunction is granted, the inconvenience and loss to the opposing party will be inconsiderable, or probably may be indemnified by a bond, the injunction usually should be granted.

The acquiescence of the victim of a continuing injury in its infliction in the past constitutes no defense against, or estoppel of his right to, an injunction against its future continuance.

The fact that the railroad companies tested the fare and the rates challenged by their actual operation for several months is no sound reason for denying the injunctions against the continued operation of this fare and these rates.

Courts of equity have plenary power, and it is often their duty to issue mandatory injunctions to restore and then to maintain a condition of things that has been wrongfully disturbed or changed.

The Circuit Court was far within its power when it enjoined the continuous operation of the confiscatory fare and rates which had changed a lawful status in existence before they took effect.

The evidence, which is too voluminous for recital or review, was considered, and it is held:

That this evidence presents no proof of any abuse of discretion by the Circuit Court in issuing the injunctions, but sustains its findings that the challenged fare and rates are confiscatory, and its orders for the injunctions.

F. N. Judson and Charles West, Atty. Gen. (John F. Green and George A. Henshaw, on the briefs), for appellants.

Frank Hagerman, Gardiner Lathrop, and S. T. Bledsoe (Clifford L. Jackson, C. G. Hornor, Joseph M. Bryson, Cottingham & Bledsoe, Robert Dunlap, T. J. Norton, Edgar A. De Meules, J. W. McLoud, S.W. Moore, C. O. Blake, R. A. Kleinschmidt, W. F. Evans, and J. G. Egan, on the briefs), for appellees.

Before SANBORN and ADAMS, Circuit Judges, and WILLIAM H. MUNGER, District Judge.

SANBORN Circuit Judge.

These are appeals from orders of the Circuit Court granting interlocutory injunctions which prohibit the appellants, the members of the Corporation Commission of Oklahoma and the Attorney General of that state, from enforcing a provision of its Constitution which reduced the maximum fares for passengers in Oklahoma from three cents to two cents per mile and from enforcing certain orders of the Commission which reduced about 40 per cent. the maximum freight rates in Oklahoma on from 40 to 50 per cent. of the intrastate freight business of the companies in that state. The injunctions were granted, after a full hearing and a careful consideration of the evidence and the arguments of the parties and upon considered opinions, by Hook, Circuit Judge. 174 F. 59; 177 F. 493. Many reasons are now urged why the orders granting these injunctions should be reversed.

Counsel for the appellants first invoke the decision of the Supreme Court in Prentis v. Atlantic Coast Line, 211 U.S. 210, 29 Sup.Ct. 67, 53 L.Ed. 150, and insist that these suits were prematurely brought. In that case the State Corporation Commission of Virginia made an order prescribing a maximum passenger rate of two cents per mile in that state. The Constitution of Virginia gave to the railroad companies an appeal from this order to the Supreme Court of Appeals of that state, and gave power to that court to supersede the order during the pendency of the appeal. The railroad companies took no appeal, but refused to obey the order, commenced suits in the federal court, and obtained temporary injunctions against its enforcement. The Supreme Court of the United States did not deny the jurisdiction of the United States Circuit Court, or its power to issue the injunctions, but held that the function of the Supreme Court of Appeals of Virginia on the appeal from the order of the Commission was legislative, and that, as the legislative process of fixing the rate was not complete until an appeal had been taken and had been determined, or until the time to take it had expired, the more courteous and orderly course of procedure would be for the companies to pursue their appeal to the Supreme Court of Appeals of Virginia before they sought relief from the national court. But the Supreme Court of the United States added:

'It seems to us that the bill should be retained for the present to await the result of the appeals, if the companies see fit to take them. If the appeals are dismissed, as brought too late, the companies will be entitled to decrees. If they are entertained, and the orders of the Commission affirmed, the bills may be dismissed without prejudice, and filed again.'

The companies had not put the prescribed fare into effect in that case. The officers of the state had been restrained from compelling them to do so, and from imposing the penalties provided for their failure so to do, by the injunctions of the federal court. The Virginia appellate court was empowered to grant upon the taking of an appeal, and the Supreme Court might well presume that it would grant, a supersedeas from the order of the Commission pending the appeal, so that the fare prescribed in that case had not gone into effect, and probably would not go into operation until the Supreme Court of Appeals of Virginia should decide the issues to be presented by the appeals to it, and the opportunity subsequently should be given to the railroad companies to apply to the federal court in equity for relief. The effect of the decision in that case, therefore, was that where the reduced fares or rates prescribed had not taken effect, and probably would not take effect until a state appellate court could, on appeal from the order of the Commission, perform its legislative function of finally fixing them, it was proper that railroad companies should take the appeals, and delay their applications to the federal court for relief until the legislative issues presented by those appeals were decided, or it became reasonably certain in some other way, as by dismissal of the appeals, that the prescribed fares or rates would be put into operation.

The records before us present no such case. The passenger fare of two cents per mile was prescribed by section 37 of the Constitution of Oklahoma, which prohibited a higher rate. No escape from this fiat was given by appeal or by supersedeas and the only intimation of possible relief from it through the rate-making officers of the state government is found in the proviso which the section contains to the effect that the Corporation Commission shall have the power to exempt any railroad company from the operation of the fare upon satisfactory proof that the company cannot earn a just compensation for its services to the public, unless it is permitted to charge more than two cents per mile for the transportation of passengers within the state. This proviso, however, grants no authority to the Commission to make fares, to fix a...