Schwabacher v. United States, Civil Action No. 713.

• Decision Date: 14 June 1947
• Docket Number: Civil Action No. 713.
• Citation: 72 F. Supp. 560
• Parties: SCHWABACHER et al. v. UNITED STATES et al.
• Court: U.S. District Court — Eastern District of Virginia

72 F. Supp. 560

SCHWABACHER et al. v. UNITED STATES et al.

Civil Action No. 713.

District Court, E. D. Virginia.

June 14, 1947.

Robert M. Cooper, of Washington, D. C., and William M. Blackwell, of Richmond, Va., for plaintiffs.

George R. Humrickhouse, Asst. U. S. Atty., of Richmond, Va., Daniel R. Kunkel, Atty., Interstate Commerce Commission, of Washington, D. C., and Edward J. Hickey, Jr., Sp. Asst. to Atty. Gen., for defendants.

J. C. Kauffman, of Cleveland, Ohio, John W. Riely and George D. Gibson, both of Richmond, Va., John C. Shields, of Detroit, Mich., and George H. Gardner, of Washington, D. C., for Chesapeake & O., Pere Marquette, and Alleghany Co., intervening defendants.

John R. Turney, of Washington, D. C., for Wellington & Co., et al., intervening defendants.

Moultrie Hitt, of Washington, D. C., for Sterling, Grace & Co., et al., intervening defendants.

Before DOBIE, Circuit Judge, and BARKSDALE and HUTCHESON, District Judges.

DOBIE, Circuit Judge.

This is a civil action brought by plaintiffs, owners of 2,100 shares of 5% cumulative preferred stock of Pere Marquette Railway Company, to enjoin, set aside, annul or suspend, in whole or in part, an order of the Interstate Commerce Commission approving the merger of the properties and franchises of the Pere Marquette Railway Company into the Chesapeake and Ohio Railway Company for ownership, management and operation.

At a hearing in Alexandria, Virginia, before the three-judge court, we denied the temporary stay sought by plaintiffs. The case is now before us, upon a motion of defendants to dismiss, on its merits. We think this motion must be granted.

Plaintiffs do not seek to set aside the merger, nor do they deny that the merger is in the public interest. They do claim, however, as set out in their complaint: "Failure to include protection for plaintiffs as dissenting shareholders, as a distinct class created by the merger is contrary to law and a direct violation of the Commission's statutory duty to impose just and reasonable conditions for the protection of all interests involved."

The Transportation Act of 1920, as amended, Section 5, 49 U.S.C.A. § 5, requires that the terms and conditions of the merger be "just and reasonable." The Commission filed a long and elaborate opinion dealing with all the relevant issues in this case. One peculiarly pertinent paragraph is as follows:

"Accordingly, considering the Pere Marquette's investment according to its books, other property values, the Company's history as to earnings, its future prospects, and the market...