Village of Mantorville v. Chicago Great Western R. Co.

• Decision Date: 07 November 1934
• Docket Number: No. 337.,337.
• Citation: 8 F. Supp. 791
• Parties: VILLAGE OF MANTORVILLE v. CHICAGO GREAT WESTERN R. CO.
• Court: U.S. District Court — District of Minnesota

8 F. Supp. 791

VILLAGE OF MANTORVILLE v. CHICAGO GREAT WESTERN R. CO.

No. 337.

District Court, D. Minnesota, First Division.

November 7, 1934.

Stearns, Stone & Mackey, of St. Paul, Minn. (Walter H. Jacobs and Guy A. Gladson, both of Chicago, Ill., of counsel; W. C. Mulligan, of Chicago, Ill., on the brief), for the motion.

George B. Edgerton and William C. Green, both of St. Paul, Minn., opposed.

NORDBYE, District Judge.

This action was brought in the state court, and on August 8, 1934, the judge of that court issued an order restraining the defendant from abandoning that portion of its railway line commencing at Mantorville, Minn., and extending to and into the village of Wasioja, Minn., as part of its railway system, and from failing to furnish transportation facilities between Eden, Minn., and Mantorville, Minn., as provided for in an order of the Railroad and Warehouse Commission of the state of Minnesota, dated April 26, 1924. The hearing on the order for temporary injunction was set down for argument on August 13, 1934. Before the hearing of said motion, the cause was removed by the defendant to this court.

It appears from the complaint that on or about May 4, 1896, the Mantorville Railway & Transfer Company and the Chicago Great Western Railway Company (herein known as the Chicago Great Western Railroad Company) entered into a contract in writing wherein and whereby the Mantorville Company agreed to sell to the railway company certain real estate and a certain railway roadbed, together with franchises, right of ways, bridges, culverts, depot buildings, and grounds, in consideration of the railway company's agreeing to place on said roadbed "a good and substantial super-structure necessary to complete the same as a line of railroad for the passage of trains, and thereafter would maintain and operate the same as a part of the railway system of said Chicago Great Western Railway Company, and would thereafter furnish to the town of Mantorville all reasonable and necessary facilities for handling freight and transporting the same, and daily trains for the transportation of passengers, at least one train each way, passenger, or passenger and freight mixed."

It is contended that this agreement was made for the benefit of the town, now village of Mantorville, and persons residing in and doing business in said village. On September 29, 1896, the Mantorville Company, in pursuance of the contract hereinbefore referred to, did sell and transfer to the railway company the property described, and the railway company went into possession and proceeded to fulfill the covenants contained in said deed, which were substantially the same as the provisions of the contract. It appears that the railway company fairly fulfilled the contract until May 11, 1921, when it discontinued its passenger service and rendered service which did not comply with the contract and which plaintiff contended was inadequate. A complaint was filed by this plaintiff and members of its village council with the Railroad and Warehouse Commission of this state praying for an order requiring defendant to operate a daily passenger or mixed train between Mantorville, Minn., and Eden, Minn. On September 20, 1921, the Railroad and Warehouse Commission filed its order requiring defendant to put into service and operate upon said branch passenger facilities which would afford accommodation to the traveling public. An appeal was taken from this order to the state district court, where on April 9, 1923, the order of the Railroad and Warehouse Commission was affirmed. The plaintiff contends that the defendant failed to comply with the order of the Commission, and thereafter, by due proceedings, a penalty totaling some $9,000 was assessed against the defendant in favor of the plaintiff and entered as a judgment. Subsequently, however, and in March, 1924, the controversy was adjusted and the judgment was vacated, and the parties stipulated to a modification of the former order entered by the Railroad and Warehouse Commission, upon which stipulation the Commission entered an amended order, which amended order, however, provided, among other things, as follows: "This agreement shall not modify or change the contract in the deed from the Mantorville Railway and Transfer Company to the Chicago Great Western Railroad Company dated May 5, 1896, which contract shall stand with the same effect and force that it has today."

Service was subsequently provided by the defendant in conformance with the amended order of the Railroad and Warehouse Commission, but plaintiff now alleges that the defendant refuses to comply with the covenants of the deed and the agreement made in March, 1924, upon which agreement the amended order of the Commission was entered, and that the defendant now threatens to abandon its branch line between Eden and Mantorville, and has obtained a certificate of public convenience and necessity from the Interstate Commerce Commission dated July 10, 1934, effective thirty days from the date thereof. Plaintiff avers that it would not have agreed to the vacation of the judgment for $9,000 except for the agreement that the contract contained in the deed should remain in full force and effect, and, if defendant now abandons the branch line, the consideration for the vacation of said judgment will have wholly failed. It contends that it will suffer irreparable damage by reason of the abandonment, and seeks to enjoin and restrain the defendant from abandoning said branch line, and for a decree requiring the defendant to maintain and operate a railroad on said branch in accordance with the contract of 1896, subject to the modification of the order of the Railroad and Warehouse Commission dated April 26, 1924, during the time that said order remains effective. Plaintiff asks in the alternative for damages in the sum of $9,000 in the event the court refuses to grant the equitable relief.

The report of the Interstate Commerce Commission dated July 10, 1934, is attached to defendant's answer. It appears that the Railroad and Warehouse Commission of Minnesota entered an appearance as intervener, and that the plaintiff, the village of Mantorville, appeared as one of the protestants. The deed between the Chicago Great Western Railway Company and the Mantorville Railway & Transfer Company was offered in evidence by the intervener and received. On April 23, 1934, the interveners and protestants, including the village of Mantorville, filed their exception to the report proposed by the examiner, stating: "In arriving at said proposed report the examiner failed to give due weight, or take cognizance of, objector's exhibit No. 4, the same being a duly certified copy of a deed, from the Mantorville Railway and Transfer Company, a corporation, to the Chicago Great Western Railroad Company, a corporation. * * *"

The Interstate Commerce Commission in its report found, among other things, that the branch "cannot be safely operated without an unjustifiable expenditure for rehabilitation; that there is insufficient rail traffic in the tributary territory to support it; and that continued operation would impose an undue burden on the applicant's resources and upon interstate commerce."

In commenting upon the deed of transfer, the Commission recited the provisions of the deed with reference to the obligation of the defendant to furnish train service, and also referred to section 4637 of Mason's Minnesota Statutes for 1927, which provides that a railway company may be required by order of the Railroad & Warehouse Commission to furnish a passenger train daily through each county seat on the line of such carrier (Mantorville being a county seat), and concluded by stating: "These matters are not controlling in determining questions of public convenience and necessity." The order provided that "the present and future public convenience and necessity permit the abandonment by the Chicago Great Western Railroad Company of the branch line of railroad in Dodge county, Minnesota, described in the application and report afore said."

In limine, we are confronted with the question of the jurisdiction of this court. The complaint does not in so many words seek to annul or modify the order of the Interstate Commerce Commission, and apparently bases its right to an injunction on the so-called contract right contained in the deed heretofore described, but manifestly the ultimate purpose of the action is to require the defendant to refrain from doing that which the Interstate Commerce Commission in its order stated it might do.

"The fact that this was a suit to set aside an order of the Commission did not appear on the face of the bill; but it became apparent as soon as the motion to dismiss was filed. Jurisdiction cannot be effectively acquired by concealing for a time the facts which conclusively establish that it does not exist." Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 258 U. S. 377, 382, 42 S. Ct. 349, 351, 66 L. Ed. 671.

The petitioner herein seeks to obtain a decree requiring the defendant to provide train facilities in accordance with the deed, subject to the modification of the order of the Railroad and Warehouse Commission, which, as before stated, provides for a modification of the train service called for in the deed. The defendant company is asked to do that which is directly contrary to the order of the Commission. In effect, if plaintiff prevails, the order of the Commission will be suspended, and plaintiff is endeavoring indirectly to obtain an annulment of the Commission's order in proceedings where it appears that the Commission was advised and had before it, and presumably considered, the very deed which is now the basis of this action. True, the Commission did not attempt to exercise any power, if any it has, to determine the respective contract rights of the parties in light of its order of abandonment, but, with the Railroad and Warehouse Commission...