TOLEDO, P. & WRR v. Stover

• Decision Date: 19 May 1945
• Docket Number: Civil Action No. P-380.
• Citation: 60 F. Supp. 587
• Parties: TOLEDO, P. & W. R. R. v. STOVER et al.
• Court: U.S. District Court — Southern District of Illinois

60 F. Supp. 587

TOLEDO, P. & W. R. R. v. STOVER et al.

Civil Action No. P-380.

District Court, S. D. Illinois, N. D.

May 19, 1945.

COPYRIGHT MATERIAL OMITTED

James A. Velde, Gardner Carton & Douglas, of Chicago, Ill., and Clarence W. Heyl, of Peoria, Ill., for plaintiff.

Francis M. Shea, Asst. Atty. Gen., Howard L. Doyle, U. S. Atty., and Marks Alexander, Asst. U. S. Atty., for defendant.

LA BUY, District Judge.

The plaintiff is the owner of a railroad together with right of way, buildings, equipment, etc., necessary to the operation thereof. During the years 1940 and 1941 plaintiff was engaged in a labor dispute with certain of its employees, and refused to submit this dispute to arbitration in accordance with the provisions of the Railway Labor Act, 45 U.S.C.A. § 151 et seq., although it had sought to settle the dispute by negotiation and mediation. On December 28, 1941, a strike was called by plaintiff's employees. Plaintiff thereupon filed its suit in this court for the issuance of an injunction to restrain its employees, conductors, yardmen, enginemen and firemen from interfering by violence or threats of violence with its property and interstate railroad operations. An injunction as prayed was granted by this court. On appeal the action of this court was affirmed but on certiorari to the Supreme court, the injunctional order was reversed. Brotherhood of Railroad Trainmen, Enterprise Lodge, No. 27, et al. v. Toledo, Peoria & Western Railroad, 321 U.S. 50, 64 S.Ct. 413, 88 L.Ed. 534, 150 A.L.R. 810.

While that litigation was pending and the United States being then in a state of war with Germany, Japan and Italy, on March 21, 1942, the President of the United States promulgated Executive Order No. 9108, which recited that the national interest and security demanded that there be no interruption in the flow of goods essential to the effective prosecution of the war, that a labor dispute existed between the employees and the management of plaintiff since December 29, 1941, which had interrupted the transportation of goods essential for the prosecution of the war, that the plaintiff had refused to submit the dispute to arbitration despite urgent requests by the National War Labor Board and by the President that it do so, that under the circumstances it was essential that the plaintiff company be operated by or for the United States in order to assure successful prosecution of the war, and, therefore, the President directed that the Director of the Office of Defense Transportation take immediate possession of all of the property of plaintiff, and to operate its railroad in such manner as he deemed necessary for the successful prosecution of the war, through or with the aid of such public or private agencies, persons or corporations as he might designate; and said directive further provided that possession and operation of plaintiff's property should be continued only until the President determined that such temporary possession and operation was no longer required for successful prosecution of the war.

Thereafter Joseph B. Eastman, then Director of the Office of Defense Transportation, issued his order No. 1 dated March 21, 1942, appointing John W. Barriger as Federal Manager of plaintiff's railroad property, with full authority, subject to the direction of said Director, to take possession of plaintiff's railroad property, and to operate or arrange for the operation of the same. On March 22, 1942, said Barriger took possession of all of plaintiff's properties as Federal Manager thereof. On January 1, 1943, said Director of the Office of Defense Transportation by his order No. 2 appointed the defendant, Holly Stover, as Federal Manager of the properties of plaintiff, in place of said John W. Barriger, and by the same order revoked the prior appointment of said John W. Barriger, as Federal Manager. Holly Stover, thereupon, took possession of all of the properties of plaintiff and thereafter continued in possession and control thereof.

On March 24, 1943, the President amended Executive Order No. 9108 with his Order No. 9320 of that date, this amendment providing for the making of money advances by the Director of the Office of Defense Transportation from the net cash earnings of his operation of the railroad. On December 27, 1943, the President by his Executive Order No. 9412 took possession of all common carriers located in the continental United States together with any and all appurtenances used in connection therewith, except certain non-operating properties. Said possession was taken through the Secretary of War on December 27, 1943, who was directed to manage and operate or arrange for the management and operation thereof. This order provided for possession and control of plaintiff's railroads and properties. On December 27, 1943, the Secretary of War took possession of plaintiff's railroad and properties and gave notice thereof. This possession and control was continued by the Secretary of War until January 18, 1944, when the Secretary of War, pursuant to Executive Order No. 9412, determined that continued possession, operation and control by the United States of the carriers taken and assumed by or pursuant to that order were no longer required to prevent interruption of transportation service. The Secretary of War, thereupon, delivered possession and control of plaintiff's railroad and properties to the Office of Defense Transportation, and through said Office to the defendant, Holly Stover, who had been Federal Manager as above set forth.

Contending that the order of the Secretary of War, issued January 18, 1944, relinquished all control of plaintiff's railroad and properties, plaintiff made a demand upon the Secretary of War that its property be turned back to it but this demand was refused and the property turned back to the status it occupied prior to the order of December 27, 1943.

Based upon the above facts, plaintiff alleged in its complaint that Executive Order No. 9412 superseded Executive Order No. 9108; that Order No. 9108 became of no further force or effect when the order of January 18, 1944, issued by the Secretary of War became effective; and that possession and control of plaintiff's properties should have been turned over to plaintiff and not to the Office of Defense Transportation. Plaintiff further contends that Executive Order No. 9108, which provided for the taking of possession of plaintiff's properties, made no provision for the payment of just compensation for such taking; that plaintiff has not been paid or received any compensation since March 22, 1942, because of said taking and the continued possession of same; that the making of additions and betterments to the properties without plaintiff's consent is unlawful; and that under such circumstances said Orders were unlawful and in violation of the Fourth and Fifth Amendments to the Constitution of the United States and also in violation of Sections 2, 6 and 13 of Article II, of the Constitution of the State of Illinois.

Plaintiff filed its complaint in the Circuit Court of McDonough County, seeking a temporary restraining order against the making of certain proposed betterments and additions, and for an order directing the return to plaintiff of all of its properties. The defendants by proper action caused this suit to be removed to this court.

The plaintiff in this court presented its motions for a temporary restraining order enjoining the defendants from making any expenditures for the proposed betterments and additions. This court (Judge J. Leroy Adair presiding) entered an order on July 24, 1944, denying the motion of plaintiff for a temporary restraining order.

The defendants filed herein their motion to dismiss the complaint and on this motion oral arguments were heard by the court, briefs were filed by both parties, and the court took the matter under advisement. The defendants' main contentions for a dismissal of the complaint are (a) that the suit is an attempt to try the United States and disturb its possession of property behind its back, and an attempt, by indirection to ignore and prejudice the interests of the United States; (b) that the State court had no jurisdiction of this cause, and as a removed cause this court has no jurisdiction of the cause; and (c) that plaintiff has sustained no injury which is not compensable in money, and it has an adequate remedy therefor in the Court of Claims of the United States.

The plaintiff's contentions are (a) that there was no authority in law for the issuance by the President of Executive Order No. 9108 under which defendants purport to hold possession; (b) that possession of the railroad by the United States, whether under Executive Order No. 9108, or the order of December 27, 1943, was legally terminated by the Secretary of War on January 18, 1944; and (c) that defendants' possession and control of the railroad is unlawful because no provision has been made for the prompt payment of reasonable, just and adequate compensation to the plaintiff.

A decision as to the plaintiff's contentions (a) and (b) will be decisive of defendants' contentions (a) and (b) because the questions involved are in effect the same.

The Act of August 29, 1916, 39 Stat. 645, 10 U.S.C.A. § 1361, is as follows:

"The President, in time of war, is empowered, through the Secretary of War, to take possession and assume control of any system or systems of transportation, or any part thereof, and to utilize the same, to the exclusion as far as may be necessary of all other traffic thereon, for the transfer or transportation of troops, war materials and equipment, or for such other purposes connected with the emergency as may be needful or desirable."

The plaintiff points to the fact that Executive Order No. 9108 does not provide for the taking of plaintiff's railroad and its properties "through the Secretary of War" but provided that the Director of the Office of Defense...