Port Richmond & Bergen Point Ferry Co. v. Board of Chosen Freeholders of Hudson County

• Decision Date: 05 March 1920
• Citation: 264 F. 998
• Parties: PORT RICHMOND & BERGEN POINT FERRY CO. v. BOARD OF CHOSEN FREEHOLDERS OF HUDSON COUNTY.
• Court: U.S. District Court — District of New Jersey

264 F. 998

PORT RICHMOND & BERGEN POINT FERRY CO. v. BOARD OF CHOSEN FREEHOLDERS OF HUDSON COUNTY.

United States District Court, D. New Jersey.

March 5, 1920

Frank Bergen, of Newark, N.J., for complainant.

John J Fallon, of Hoboken, N.J., for defendant.

LYNCH District Judge.

The bill in this case alleges that the complainant, a New York corporation, for more than 30 years has maintained and operated a ferry from Port Richmond, in Richmond county, N.Y., to Bergen Point, in Hudson county, N.J.; that the rate charged by the complainant for the carrying of adult passengers on and prior to July 6, 1905, was 5 cents each for a single crossing, which was 1 cent less than the rate for such service authorized by its charter, and 3 cents each for children; that on July 6, 1905, the defendant, under the alleged authority of an act of the Legislature of New Jersey passed February 6, 1799 (Laws 1703-1800, p. 350), adopted resolutions reducing the rate of ferriage previously charged by the complainant to 3 cents for each adult person and 2 cents for each person under 10 years of age for single crossings, and 6 cents for each adult and 4 cents for each person under 10 years of age for round trips; that shortly after the adoption of said resolutions the complainant began an action in the New Jersey Supreme Court for the purpose of testing the legality thereof, which litigation resulted in a judgment (80 N.J.Law, 614, 77 A. 1046) affirming the authority of the defendant to adopt the resolutions; that this judgment, upon writ of error, was affirmed by the Court of Errors and Appeals of New Jersey (82 N.J.Law, 536, 82 A 729), and subsequently by the United States Supreme Court (234 U.S. 317, 34 Sup.Ct. 821, 58 L.Ed. 1330); that upon the final termination of the litigation the resolutions became effective, and on July 8, 1914, the complainant began to comply therewith, and up to the filing of the bill (December 8, 1915) has continued to comply therewith; that for the 12 months ending July 31, 1915, during which period the resolutions were complied with, the gross income of the plaintiff from the operation of its ferry was $54,467.70, and its operating expenses, including taxes and depreciation, amounted to $59,176.95, there being a deficit of $4,709.15, which the complainant attributes to the reduction in the rates for passengers imposed by said resolutions, there being no change in the rates charged and collected for transporting horses, vehicles, and cattle, and other services performed by the complainant; that if the same number of passengers had been carried by the complainant that year, at the rates charged previous to the adoption of the resolutions for passenger carriage, the gross income would have been $73,311.35, instead of $54,467.79, and, instead of there being a deficit, there would have been an earning of $14,114.40; that the value of complainant's property actually and necessarily employed in the operation of its ferry exceeds $300,000, and it will cost more than $400,000 to reproduce the same; that since July 8, 1914, the date when the reduced rate went into effect, the complainant has not earned any income or interest on the value of its property, or even sufficient moneys with which to pay the expense of operating the ferry and maintaining it in suitable condition and to pay the taxes on the same levied by the states of New York and New Jersey and the municipalities in which the terminals are located; that said rates prescribed by the defendant are therefore unjust, unreasonable, and confiscatory; that the enforcement of the rates prescribed by the defendant's resolutions has had and still has the effect of taking the property of the complainant for public use without just compensation, in violation of the Constitution of New Jersey, and the enforcement of said resolutions has deprived and still deprives the complainant of its ferry property without due process of law, and denies to the complainant equal protection of the laws, and so violates the rights of the complainant secured by the provisions of the United States Constitution. Wherefore the complainant prays that this court issue writ or writs of injunction restraining the defendant from enforcing hereafter, or attempting to enforce, the resolutions reducing fare, or from enforcing either of said resolutions, or from requiring complainant to comply with said resolutions, or from prosecuting any suit against the complainant for any penalty for refusal to comply with said resolutions, or from interfering in any way with the right of the complainant to charge and collect for transporting passengers on its ferry the rates charged by it prior to July 6, 1905.

Attached to the bill is an affidavit by Matthew R. Boylan, auditor of the complainant, from which I quote:

'That during said year ending July 31, 1915, the gross earnings of said company from the operation of said ferry were $54,467.79; that during said year said company paid out for operating expenses, taxes, repairs, and maintenance $51,676.95, and set apart the sum of $7,500 in addition thereto for depreciation; that sum, as deponent believes, was not more than sufficient to provide for the annual depreciation of the property of said company employed in operating said ferry.'

And further:

'That the deficit of $4,709.16, referred to above, was caused by the reduction in fares for passengers as prescribed in said resolutions.'

There was also attached an affidavit of Henry C. Anderson, professor of mechanical engineering of the University of Michigan, wherein he sets forth that in addition to his occupation as professor he is engaged in making estimates of the value of public utility plants and property, such as railroads and ferry companies, and has been so engaged for fifteen years past; that he made a careful examination and appraisal of the condition and value of the property of the complainant, and also estimated the cost of reproducing the same; that the value of said property as of December 6, 1915, was $302,000, not including overhead charges, franchises, going value, supplies on hand, or working capital; that the cost of reproducing said property new, without overhead charges, franchises, going value, stores, or working capital, would be $435,156; and that at least the sum of $7,500 should have been set aside by the complainant annually out of earnings for depreciation of its property.

On December 8, 1915, Judge Rellstab issued an order requiring the defendant to show cause on December 20, 1915, why a writ of injunction should not issue according to the prayer of the bill, the hearing of which was by consent adjourned to December 27, 1915. On December 27, 1915, James J. Murphy, Esq., entered an appearance as solicitor for the defendant, and on said date, after hearing, Judge Rellstab ordered that a writ of preliminary injunction issue according to the prayer of the bill, which writ of injunction was duly issued and is still in force and effect.

On December 9, 1916, the defendant, through James J. Murphy, Esq., solicitor, filed an answer admitting paragraphs 1 to 6, inclusive, of the bill, setting out that it had no knowledge or information sufficient to form a belief as to the statements in paragraphs 7 and 8 thereof, and denying paragraph 9. On February 27, 1919, the defendant, through John J. Fallon, Esq., substituted solicitor, served upon the complainant notice of an application for an order to dissolve the preliminary injunction granted December 27, 1915, on the ground of inexcusable delay in bringing this cause to a hearing, which notice stated that the records of the court showing the date when the bill of complaint was filed and the date of the granting of the preliminary injunction would be relied upon. On March 4, 1919, Judge Rellstab, by order, denied this motion of the defendant; 'the court being of the opinion that there is no merit in the application' therefor.

The trial of the issue was begun before me on Thursday January 15, 1920, over four years after the granting of the preliminary injunction, and the issue to be decided by this court is whether or not the proofs submitted, which relate to the situation existing at and prior to the filing of the pleadings, convince this court that the...