St. Louis, I.M. & S. Ry. Co. v. Bellamy

• Decision Date: 17 January 1914
• Citation: 211 F. 172
• Parties: ST. LOUIS, I.M. & S. RY. CO. v. BELLAMY et al.
• Court: U.S. District Court — Eastern District of Arkansas

211 F. 172

ST. LOUIS, I.M. & S. RY. CO. v. BELLAMY et al.

United States District Court, E.D. Arkansas, Western Division.

January 17, 1914

This proceeding arose out of the Arkansas railroad rate cases which have been pending in this court for some time. The original suit was brought by the railroad company against the Railroad Commissioners of the state and two persons who are alleged to be shippers of freight and passengers on the road as representatives of the shippers and passengers affected by the suit.

The plaintiff now files a supplemental bill as ancillary to the original proceeding, in which it sets out the filing of the original action; that on September 3, 1908, upon a hearing after due notice to the defendants, a temporary injunction was granted by Judge Van Devanter, then one of the circuit judges for this circuit, enjoining the enforcement of the freight tariff and two cents a mile passenger rate. That order required that the complainants execute a bond to the United States in the penal sum of $200,000, conditioned that it would keep a correct account showing the difference between the rate actually charged by complainants after the granting of said injunction and that which would have been charged had the rates inhibited by said order of injunction been applied, and that if it should finally be decided that the order inhibiting the enforcement of the then existing rates should not have been made that the complainants would within a reasonable time to be fixed by the court, refund in every instance to the party entitled thereto the excess as charged over what would have been charged had the inhibited rate been charged. In pursuance of this order complainant filed a bond conditioned as therein provided. (The opinion of the court granting that temporary injunction is reported in 163 F. 141.)

On February 18, 1909, an application was made to the judge now presiding for a modification of the temporary injunction, and on the 1st day of June, 1909, the temporary injunction formerly granted was modified, and a further order entered requiring complainant to execute an additional bond to the defendants in the sum of $800,000, conditioned that complainant should refund to all shippers of freight and passengers the amounts collected in excess of the rates fixed by the laws of the state of Arkansas, if it should be finally determined that the temporary injunction was improperly granted. 168 F. 720. A bond in conformity with this order and reciting the conditions, was filed on the 5th day of July, 1909. On April 4, 1911, this court entered a final decree making the injunction perpetual and releasing the bond for injunction filed in said cause and the sureties thereon from further liability. 187 F. 290. Upon appeal to the Supreme Court the decree of the Circuit Court was reversed and the court directed to dismiss the bill without prejudice. 230 U.S. 553, 33 Sup.Ct. 1030, 57 L.Ed. 1625. On July 18 1913, the mandate of the Supreme Court having been filed, this court entered an order dismissing complainant's aforesaid bill without prejudice and dissolving the temporary and permanent injunctions theretofore granted. It was further ordered, over complainant's objection, that said cause be referred to a special master appointed by the court for the purpose of determining the damages sustained by the defendants acting for the benefit of all persons, shippers, consignees, and passengers, who have sustained any damage by reason of the granting of said injunction. The order directed the special master to give notice by publication in a number of newspapers in the various counties through which the road ran that all persons having any claims against complainant by reason of the granting of said injunction should present the same to him on or before the 1st day of November, 1913, by filing with him the evidence, or such proof as might be in their possession, of their claims, and directing the master to make a report of his findings to the court. Afterwards the time within which such claims were to be filed was extended to January 1, 1914.

The supplemental bill further charges that the defendant Howard H. Gallup, notwithstanding the aforesaid proceedings and orders of this court to present the claims to the special master, instituted an action in the chancery court of Baxter county, Ark., to recover from the railroad company the sum of $6,000 for charges alleged to have been made by the railroad company from the time the temporary injunction was first granted in 1908 to the time of the final dissolution on July 18, 1913; that W. J. Metcalf, who is also made a defendant in this proceeding, and a large number of other persons who were passengers or shippers on complainant's railroad during the time said order of injunction was in force, are threatening to institute similar suits in the various courts of the state.

It is also charged that a very large number of claims for refund of charges in excess of the inhibited rates during the time said orders of injunction were in force, amounting to more than one-half million dollars, have been filed before the special master appointed in this cause and are now under investigation by said master, which proceeding involves a very large amount of expense in the way of master's costs and expenses; that in many instances duplicate claims covering the same shipment have been filed by parties severally claiming to be entitled to the alleged excessive charges, and it will be necessary to determine who among said claimants is entitled to recover any allowance that may be made by the special master in that behalf; that many claimants who were denied the right to recover by the master are threatening to bring independent suits against complainant for the recovery of the claims so presented to and refused by the master, and complainant represents that unless an order is issued in this cause enjoining and restraining proceedings for the recovery of such overcharges during the pendency of the aforesaid proceedings, and while said orders of injunction were in force, many thousands of suits will be instituted against complainant by passengers and shippers of freight during the time the injunction was in force; that the complainant would be required to produce its books and records in defending each of the numerous cases brought against it for the purpose of showing the difference between the inhibited rates and those actually charged by it, and will be put to great expense and greatly harassed by being compelled to defend such a multitude of suits; that many of the suits so instituted would embrace claims that have already been passed upon by the special master appointed in the aforesaid cause, and in many of which allowances have been made to other parties who were adjudged in said proceeding to be entitled to reparation on account of the alleged overcharges, and thereby complainant will be exposed to great loss and damage by reason of double recoveries in favor of different parties upon the same claim, or else put to very great expense, trouble, and hazard in order to prevent great and irreparable loss and injury by reason of actions based upon claims presented to and allowed by the special master under the reference made to him; that the expense involved in the defense of such suits as will be instituted against it unless a restraining order is issued will be very great and involve great and serious loss to complainant without regard to the result of said litigation, notwithstanding the fact that this court has taken jurisdiction for the purpose of assessing the damages which accrued to shippers and passengers on account and by reason of said injunctions.

A copy of the complaint filed by the defendant Gallup in the chancery court of Baxter county, filed as an exhibit to the bill, shows that it is in the nature of a bill of discovery; it being alleged that the plaintiff Gallup cannot state the exact amount of such excess charges, and therefore prays for an accounting and a discovery of the amount of such payments.

The prayer of the supplemental bill is that these defendants, and all other persons having claims of that nature, be enjoined from instituting or prosecuting to judgment any action or actions for the recovery of such overcharges.

The order of reference to the special master directs him, among other things, to report separately all claims which arose under the first temporary injunction granted by Judge Van Devanter; next, all claims which arose under the bond executed in pursuance of the order made by the court on June 1, 1909; and, next, all claims which arose after the final decree making the injunction permanent was rendered on April 4, 1911, until the dissolution of the injunction and dismissal of the bill.

The defendant Gallup filed a motion to dismiss upon the ground that the complainant was not entitled to any relief upon the facts stated in the supplemental bill, and also filed a plea setting up the fact that his suit in the chancery court of Baxter county had been instituted prior to the filing of the supplemental bill, and an answer admitting all of the allegations set up in the supplemental bill.

The defendant Metcalf only filed a motion to dismiss the supplemental bill upon the ground that it does not state facts which would entitle complainant to relief.

A temporary restraining order was granted, and the cases have now been heard upon the pleadings and the motions to dismiss; the question before the court being whether the injunction should be made perpetual.

Among the rules of the Circuit and District Courts of this circuit is the following, promulgated on November 7, 1900 by the judges then composing the Circuit Court:

'In all cases in which an injunction has been

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