Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-04-03
THE RATE-W CASE
OPINION by JUDGE HUGHES HAND
ED DOWN AT NORFOLK.
THE INJUNCTION DISSOLVED.
"IncIination to the View That. ON
n Proper Dill, Court May
Put u Stop to luminous
Rate War"

NORFOLK, VA, April 2-Last fall
Judge Hughes, OF the United States Dis
trict Court. sitting in Norfolk, granted.
upon application of the Mercantile Trust
Company of Baltimore. an order re-
straining the Seaboard Airline and
Southern railway from cutting rates.
Some time ago argument was heard on
a motion to make the restraining order
perpetual. Following is decision hand
ed down to-day:
This is bill BY two trust compa-
MES of Baltimore, claiming. as owners
of about $4,000 of bonds of the differ
ent roads composing the Seaboard Air
Line system, Of which about $4,000 were
bonds of the Seaboard road proper, and
over s2,5OO,OO0 of bonds of the different
roads. composing the Atlantic Coast
Line and the Southern railway system.
There is no allegation as to the pro-
portion in which the two compainants
own these bonds. The bill makes de-
PENDANTS the Seaboard and Roanoke
Railroad Company. and no other road
of its system, and various other roads
connected with the Atlantic Coast-Line
and Southern railway systems. 1t al
leges with some amplification that
rate-war has arisen between the Sea-
board system and the Southern SYSTEM
and that the result is ruinous TO the
bonds secured OH these different roads;
and it prays the court to stop 1t. To
this bill demurrer was filed by the
Seaboard. Some other general defend
ants entered a general appearance. and
w
flied. a temporary restraining order was
issued
"On March 10th the case came up for
a hearing on the bill and demurrer ON
that day a bill, called by complainants
a supplemental bill, was filed. alleging
a demand on the Mercantile Trust Com
pany. of Baltimore, trustee of the Sea-
board bonds and its refusal to bring
suit, on the grounds stated in the origi-
nal BILL but not making 1t a party ue-
fendant. One Of the complainants also,
by leave of court, intervened as trustee
i'm some OF the mortgages, and the same
leave was granted to the Central trust
Company and the Farmers Loan and
Trust Company, intervening as trustees
of MANY million dollars in bonds. none
Of them being Seaboard bonds. Demur-
rers were promptly filed 10 these new
ting all these demurrers down for argu-
ment the next day, and the case was
elaborately argued upon the grounds
raised by these demurrers.
OBJECT OF BILL
"As far as the Seaboard system is con-
cerned. the object Of the bill is TO enjoin
II from reducing rates, on the admitted
theory that through it the injunction Will
operate over the entire system to Atlanta.
II anpears that the Raleigh and
CASTOR railroad Is, with the Seaboard,
lessee of the Georgia, Carolina and
Northern. Neither the Raleigh and Gas
ton. nor the Georgia. Carolina and North
ern are parties. and yet / am asked
TO enjoin rates over them, on the mere
allegation that the Seaboard, by virtue
of owning a majority of the Raleigh and
Castor stock, controls them. Mere
ownership of stock is, in no legal sense,
a control, and it is elementary law in
the Federal courts that there is no Juris-
diction TO enter decree directly affecting
the rights of absent parties.
"In such a case, the Court has no alter
native but to dismiss the bill.
"It is equally clear that the trustee
I'm the mortgage securing the Seaboard
and Roanoke bonds is a necessary party
I'm the Federal courts when any two
bondholders ranged oil different sides
might defeat the jurisdiction. The
doctrine that the trustee represents
them all is too vital to be frittered away.
And a mere allegation, or demand and
refusal is not sufficient, for any adjudi-
cation would not bind him, and de-
fendant might be vexed with second
suit in his name. And. besides, he Is
entitled to a day in court to show why
he refused, and TO take charge of the
litigation at any subsequent stage, IL he
sees fit. | think. also, that the original
bill is multifarious, as combining dis
connected causes of action against diffe-
rent defendants, and that this vice Is
hagrantIy aggravated by the additional
interventions and amendments.
For these reasons, ! will enter de-
cree sustaining all the demurrers and
dismissing the bills. and petitions. l must
confess an inclination to the opinion
that. on a proper bill. with proper
PARTIES, a court may put stop 10 a
ruinous rate-war, but as this case goes
off on a question of jurisdiction, l make
No rulfno IN that pOint."