Court Opinion

ID: 8824717
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:43:48.158834+00
Date Added: 2024-06-11T17:04:44.763545
License: Public Domain

KNAPP, Circuit Judge.
By statute enacted in 1904, now section 3161 of volume 1 of the Code of South Carolina, the Railroad Commission of that state was given jurisdiction and control “over all telephone lines, stations, and exchanges,” with plenary power to fix and regulate the rates or tolls to be charged for services, and to make and enforce rules and regulations governing such telephone lines, stations, and exchanges. In March, 1916, the appellee, Southern Bell Telephone & Telegraph Company, herein called defendant, entered into contract with the town of Hartsville, S. C., by which it agreed to “furnish local exchange telephone service to its Plartsville exchange subscribers within its exchange radius” on certain terms and at certain rates therein specified, subject to the approval of the Railroad Commission. This agreement was assented to in writing by a majority of *808th; former subscribers, of whom plaintiff was one, and later confirmed by the Railroad Commission “without prejudice.” The “exchange radius” appears to have included Darlington, some 12 miles distant, and a number of rural lines.
In October, 1920, defendant filed a petition with the Railroad Comm.ssion, asking revision and increase of its rates throughout the state of South Carolina, on the ground, in substance, that tire rates then perm.tted did not yield the return to which it was entitled. Notice of this application and of a hearing thereon was published “once a week for at least four weeks,” as required by section 3161, in the four leading di ily newspapers of the state, pursuant to which hearing was begun at Columbia on the 8th of December, and continued for several days. In March following the commission made an order effective “from and after the 1st day of April, 1921,” approving and authorizing rates fcr telephone service in South Carolina according to a detailed schedule arnexed thereto. This order prescribed higher rates for Hartsville srbscribers than those named in the contract of March, 1916, and also, to correct a discrimination, abolished free service to Darlington; that is, removed Darlington from the “exchange radius,” and imposed a toll charge for telephoning to that town.
In May, 1921, plaintiff brought this suit, in the court of common pleas of Darlington county, asserting that the contract of 1916 was still in force and binding on defendant, and that he was entitled to the n tes fixed thereby, -including free service to Darlington, alleging damages to the amount of $2,999, and demanding judgment for that sum, because of the increased rates enforced for Hartsville service and the imposition of a toll charge to Darlington, and praying for an injunction «straining defendant from refusing to furnish telephone service at tie lower contract rates. The bill of complaint makes no mention of tie commission’s order. Before expiration of the time to plead, defendant filed its petition and bond in the court of common pleas, and gave notice of a mqtion to remove the cause to the United States District Court for the Eastern District of South Carolina. Upon hearing the motion was granted, for reasons stated in a well-considered opinicn, and the cause removed accordingly. In the meantime defendant had filed an answer, setting up the order of the Railroad Commission, and alleging its right and duty to charge the higher rates thereby prescribed. In the court below a motion to remand was denied, the case tried on the merits, and the complaint dismissed. Plaintiff appeals.
[1, 2] The two questions here presented, are the right of defendant to remove the cause, and the validity of the commission’s order. Of .these in their order. The refusal to remand is assailed, first, because, as is claimed, the requisite diversity of citizenship was not made to appear. This contention was not pressed in argument, and is plainly without merit. The complaint alleges that “plaintiff is a citizen and taxpayer, resident at Hartsville, in the town of Hartsville, in the county oE Darlington, in the state of South Carolina,” and that “defendant is a corporation chartered and existing under and by the laws of the srate of New York.” This is equivalent to alleging that plaintiff is a c.tizen of South Carolina, for the court will take judicial notice that *809Hartsville is in the Eastern district of that state, and the fact that defendant owns property and carries on business in South Carolina does, not make it any the less a citizen of New York. We deem it beyond doubt that diverse citizenship was sufficiently shown.
[3] It is contended, second, that timely notice was not given of intention to file petition and bond for removal. Section 29 of the Judicial Code, as amended March 3, 1911, provides:
“Written notice of such petition and bond for removal shall be giren the adverse party or parties prior to filing the same.” Comp. St. § 1011.
And plaintiff argues that this means such notice as may be fixed by rule of court, state or federal, or at least such notice as would be adjudged reasonable. In point of fact, the notice in question was served only an hour or two before the petition and bond were filed, which plaintiff says is practically the same as no notice at all, and therefore manifestly not the notice required. But this, in our opinion, involves a misconception of the purpose of amending section 29. Formerly no notice of filing the petition and bond was necessary, and a cause might be removed without the plaintiff’s knowledge. The object of the amendment, as we conceive, was not to give opportunity to oppose the filing, which no statute contemplates, but rather and merely to inform “the adverse party or parties” that the right of removal will be exercised, and this object is accomplished by literal compliance with the provision; that is, by notice at any time, however short, before the actual filing. Hansford v. Stone-Ordean-Wells Co. (D. C.) 201 Fed. 187; Potter v. General Baking Co. (D. C.) 213 Fed. 697; Hinman v. Barrett (D. C.) 244 Fed. 621; Lewis v. Erie Railroad Co. (D. C.) 257 Fed. 869. To hold otherwise is to lose sight of the distinction between notice of filing the petition and bond, and notice of application for an order of removal. In this case the latter notice was given in full accordance as to time and in other respects with the Code of South Carolina, and plaintiff cannot justly complain because the notice of filing was not served until just before the fact. This view harmonizes all parts of section 29 and gives consistency to the whole scheme of removal procedure.
[4] The third contention, stressed in brief and argument, is that the jurisdictional amount is not involved. As above stated, the complaint sets up the contract of March, 1916; alleges that it is in full force and effect; that defendant is bound to furnish telephone service at the rates therein stated, including free service between Hartsville and Darlington, and over the rural lines radiating from Hartsville; that plaintiff is ready and willing to pay such contract rates, and has tendered the same; that defendant, “in flagrant and fraudulent disregard of its said contract, and maliciously intending to injure and damage plaintiff,” has demanded excessive and illegal rates and undertaken to enforce them “by willfully, wantonly, fraudulently and maliciously failing and refusing to render to plaintiff, either at his office or at his residence, any telephone service whatever, and has avowed its determination to continue to do so, unless and until plaintiff shall accede to the unjust and illegal demands thus made upon him”; that in consequence he “has already been injured and damaged in the sum of at least $2,-*810999”; and that he “will suffer great and irreparable injury and damage” unless defendant be restrained by injunction. It further appears that the rate increase to plaintiff alone, for local service in Harts-ville, from the effective date of the commission’s order to the time suit was brought, amounts to $2.60, to say nothing of the toll charge to Darlington and on rural lines, or of those increases for the indefinite future for both local and long-distance service.
That punitive damages may be considered in determining the amount necessary to federal jurisdiction is distinctly held in Scott v. Donald, 165 U. S. 58, 71, 17 Sup. Ct. 265, 41 L. Ed. 632, which on this point seems a controlling authority. The damages claimed by plaintiff, and for which judgment is demanded, with the increased charges which had already accrued against him or been paid by him, aggregate something more than the jurisdictional requirement, without taking note of tlie permanent relief sought by injunction.' If the case had remained in the state court, we perceive no legal reason why the plaintiff might not have recovered, under the allegations of his bill, the full amount of damages sued for, and also obtained a permanent injunction against the increased rates, and this assumption necessarily implies that more that $3,000 is involved. Moreover, in its petition for removal, defendant states the facts on which it avers that the matter in dispute exceeds the sum of $3,000, exclusive of interest and costs, and this averment is not traversed directly, if at all, in the opposing affidavit of plaintiff. The question of fact was therefore correctly decided in favor of defendant by the state court and the court below. Dishon v. C., N. O. & T. P. Ry. Co., 133 Fed. 471, 66 C. C. A. 345.
To this it may be added that plaintiff’s suit is not based on grounds peculiar or personal to himself, but wholly on grounds which are common to all telephone subscribers in Hartsville. He asserts and seeks to enforce the continuing obligation of defendant to furnish telephone service at the old contract rates, and thus puts in issue the right of .defendant to any increase of charges above the contract limitation. In the nature of the case this involves, to a substantial and perhaps serious f xtent, the value of defendant’s Hartsville plant and the earning capacity of its Hartsville exchange. And the force of this suggestion is multiplied when it is borne in mind that the sole defense set up is the order of the Railroad Commission. Stated in a word, the situation is this: If the Commission’s order is valid, plaintiff has no case; if invalid, the telephone company has no defense. Thus the validity of that order is the real matter in controversy, and that matter obviously involves many times the jurisdictional amount. However, it is not necessary to decide whether this may be taken into account for the purpose now in hand, since we are of opinion, for the other reasons stated, that -:he trial court was clearly right in denying the motion to remand.
[5] This brings us to consider the commission’s order and the grounds upon which it is claimed to be invalid. The first objection is based on the following proviso in section 3161:
“Provided, that in cities and towns where franchises have been granted Oy any city or town, to operate and maintain a telephone exchange or exchanges and the rates and tolls are fixed in any such franchise so granted, *811nothing heroin shall permit any increase in tho rates and tolls so fixed for service now furnished whether local or otherwise, except by agreement, with the municipal authorities, in any such city or town and tho subscribers.”
But this in terms and manifest intent is limited to franchise contracts theretofore made and then in force, and has no application to the contract in suit, which was not entered into until some twelve years after-wards. That this objection is without merit is too obvious for argument.
[0] Another objection is based on a further proviso in section 3161, which reads as follows:
“Provided, further, that except by agreement with the subscriber, no change shall be made in any existing rates without a hearing by said commission which shall be had at such timo and place as shall bo designated by said commission most convenient to tho parties interested, and of which the said commission shall publish a notice in at least one newspaper most likely to give notice to the parties interested, once a week for at least four weeks.”
It is undisputed that notice of hearing on defendant’s petition was published once a week for four weeks prior to the hearing in the four daily newspapers of widest circulation in the state. It was not published in the Hartsville paper, and plaintiff says he had no notice or knowledge of the proceeding until after the commission made its order. His contention seems to be that as to 'him the contract rates could not be changed unless he was made a party to the proceeding and personally notified of the time and place of hearing. The mere statement of the proposition refutes it. The proviso does not .require notice to the telephone user, or to the town with which a contract for telephone service may have been made; it only requires that notice be published “in at least one newspaper most likely to give notice to the parties” — that is, the persons whose interests may be affected by an order of the commission. In this case the application covered rates generally throughout the state, and it cannot be doubted that appropriate publication was in newspapers of general circulation. The publication actually made was ample compliance with the statute, and the order in question is not invalid for failure to give notice of hearing in the Hartsville paper. Union Dry Goods Co. v. Georgia Public Service Corporation, 145 Ga. 658, 89 S. E. 779.
[7] As to this and the remaining objections, charging the impairment of contract obligations and want of due process of law, it is enough to say that they are conclusively answered by numerous decisions of the Supreme Court. Directly in point, and leaving nothing to be said, are the Georgia case, supra, and cases referred to and quoted from in the opinion. 248 U. S. 372, 39 Sup. Ct. 117, 63 L. Ed. 309, 9 A. L. R. 1420.
“Those decisions,” says Mr. Justice Glarke, “a few from many to like effect, should suffice to satisfy the most skeptical or belated investigator that the right of private contract must yield to the exigencies of the public welfare when determined in an appropriate manner by the authority of the state.”
The order under review is valid, and the decree appealed from will be affirmed.