The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-04-03
: erv,,. r,fv Restraining Order
AGAINST S. A. L. Set Aside.
JUDGE HUGHEs'S OPINION
RAISES ACTION SOLELY UPON
LACK OF JURISDICTION.
ABSENT PARRY HAS RIGHTS
But Judge Hughes intimates That With
a Proper Sill and Proper Parties
the Court Might Stop
Eunous Rate-War.

tNS )@G't So o'O| -
Fsuinous Rate-War.
Norfolk. Va, April 2.-Last fall Judge
Hughes of the United States court grant
ed A restraining order in the matter OF
rate cutting between the Seaboard Air
Line and Southern Railway systems
which put an end to the very vigorous
war that had been commenced between
those two lines. The merits of the ques-
tion were argued before him here sew
eraI weeks ago and to-day he handed
down the following opinion, winch sets
aside the restraining order:
This is a bill by two trust companies
of Baltimore. claiming as owners of a
bout S1S0.O00 of bonds of the different
roads composing the Seaboard Airline
system tof which about $4,000 were
honds of the Seaboard road proper) and
over So. 100000 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 compliments
own these bonds. The bill makes de-
PENDANTS the Seaboard and Roanoke
Railroad Company land 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 amplifcation that rate
war has arisen between the Seaboard
system and the Southern system; that
the result is ruinous to their bonds secur-
ed on these different roads, and it prays
the court to stop it. To this bill de-
murrer was filed by the Seaboard. Some
of the other defendants entered gem
.eral appearance and the others answered.
When the bill was filed temporary re
straining order was issued.
On March 10 the case came up for
hearing on bill and demurrer. On that
day bill, called by compliments sup
Elemental bill. was filed alleging de-
mand on the Mercantile Trust Company,
of Baltimore, trustee of the Seaboard
bonds. and its refusal to bring suit on
the grounds stated in the original bill,
but not making it a party defendant.
One Of the complainants also, by leave
of court interyened as trustee in some
of the mortgages, and the same leave
was granted 10 the Central Trust Com
pany and the Farmers Loan and Trust
Company. intervening as trustees of
many million dollars IN bonds, none of
them being Seaboard bonds. Demurrers
were promptly filed to these new papers,
and an order was entered setting all these
demurrers down for argument the next
day and the case was elaborately argued
upon the ground raised by these demur-
vers.
As far as the Seaboard system is con-
-cerned, the object of the bill is to enjoin
it from reducing rates on the admitted
theory that through it the injunction will
operate over the entire system to At
ianta.
II appears that the Raleigh and Gas
ton Railroad is, with the Seaboard, lessee
of the Georgia, Carolina and Northern.
Neither the Raleigh and CASTOR, nor
the Georgia, Carolina and Northern 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 q control,
and it is elementary law in the Federal
courts that there is no jurisdiction to
enter decree directly affecting the rights
of absent parties. In such case the
court has no alternative but to dismiss
the bill.
1t is equally clear that the trustee in
the mortgage securing the Seaboard and
Roanoke bonds is a necessary party. In
the Federal courts, where any two bond
holders ranged ON 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 of demand and refusal is not
sufficient, for any adjudication would not
bind him, and the defendant 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 if he sees fit. l think
also that the original bill is mutifarious,
as combining disconnected causes of ac-
ton against different defendants and
that this vice is hagrantly aggravated
10y the additional interventions and
amendments.
For these reasons, will enter decree
sustaining all the demurrers and dismiss
ing the bills and petitions. | must con-
fess an inclination to the opinion that
on proper bill with proper parties a
court may put a stop to T>I:nous rate
war, but as this case goes off on ques-
tion of jurisdiction, make no ruling on
that point.