General Inv Co v. New York Cent Co, 274
| Decision Date | 24 May 1926 |
| Docket Number | No. 274,274 |
| Citation | 46 S.Ct. 496,271 U.S. 228,70 L.Ed. 920 |
| Parties | GENERAL INV. CO. v. NEW YORK CENT. R. CO |
| Court | U.S. Supreme Court |
Messrs. Snyder, Henry, Thomsen, Ford & Seagrave, of Cleveland, Ohio (Mr. Frederick A. Henry, of Cleveland, Ohio, of counsel), for appellant.
Messrs. West, Lamb & Westenhaver, of Cleveland, Ohio (Mr. S. H. West, of Cleveland, Ohio, of counsel), for appellee.
This is a suit in equity brought by a minority stockholder against the New York Central Railroad Company to enjoin it from dominating and controlling through stock ownership, certain other railroad companies. There are various prayers in the bill, but all make for the attainment of the object just stated.
The suit was begun in the District Court of the United States for the Northern District of Ohio June 20, 1924. Federal jurisdiction was invoked on the grounds that the parties are citizens of different states, the plaintiff a Maine corporation and the defendant a corporation of Ohio and states other than Maine, and that the suit is one arising under the laws of the United States, there being also a showing that the value involved is adequate.
Shortly described, the bill charges that the defendant was organized pursuant to a consolidation agreement between the New York Central & Hudson River Railroad Company the Lake Shore & Michigan Southern Railway Company, and nine companies subsidiary to them; that the agreement was made in April, 1914, and carried into effect the following December; that thereby the defendant, besides acquiring the railroad lines of the immediate parties to the agreement, became invested with large amounts of stock in other railroad companies, including the Michigan Central and Big Four, and was thus enabled to dominate and control them and their subsidiaries; that these other companies have railroad lines which are operated in both interstate and intrastate commerce, and many of their lines are parallel and normally and potentially competing; that during the ten years since the agreement became effective the defendant through its ownership of stock in these other companies has dominated and controlled and is now dominating and controlling their properties and business; and that this stock ownership, domination and control is in violation of the Sherman Anti-Trust Act, c. 647, 26 Stat. 209 (Comp. st. §§ 8820-8823, 8827-8830), of the Clayton Act, c. 323, 38 Stat. 730, and of the laws of Ohio and other states, wherein the railroads lie, forbidding a common control, through stock ownership or otherwise, of parallel or competing railroads.
The defendant moved to dismiss the bill on various grounds, and the court after a hearing on the motion entered a decree of dismissal. Afterwards and in due time the court granted a certificate stating that the dismissal was for want of jurisdiction of the subject-matter and allowed a direct appeal in this Court under section 238 of the Judicial Code (Comp. St. § 1215), which at that time permitted such an appeal where the jurisdiction of the District Court was in issue, but required the jurisdictional question to be certified and limited the review to the ruling on that question.
In the bill, as we have shown, the plaintiff attempts with much detail to set forth a continuing violation of the Sherman Anti-Trust Act and the Clayton Act, asserts that this violation unless restrained will be injurious to the plaintiff and other stockholders and prays for relief by injunction. Such a suit is essentially one arising under the laws of the United States, and, as the requisite value is involved, is one of which the District Courts are given jurisdiction. By jurisdiction we mean power to entertain the suit, consider the merits and render a binding decision thereon; and by merits we mean the various elements...
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