Court Opinion

ID: 8790655
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:49:46.617918+00
Date Added: 2024-06-11T17:03:19.943753
License: Public Domain

NILES, District Judge
(concurring). [5] It is elementary that preliminary or temporary injunctions should only issue in cases of extreme urgency, where the right is clear, and where considerations of the relative inconvenience is strongly in complainant’s favor, and as is laid down in 22 Cyc. 746:
“An injunction, whether temporary or permanent, cannot as a general rule be sought as a matter of right, but its granting or refusal rests in the sound discretion of the court under the eiremnstanees 0† the particular case. Especially is this the rule in the case of a temporary injunction, where the *483granting of the injunction depends upon the determination of questions of fact and the evidence is conflicting. This discretionary power, however, is not arbitrary and unlimited, but must be exercised reasonably and in harmony with well-established principles. And when the case made out by the complainant is perfectly clear, and he has complied with all the requirements of the law for the issuance of an injunction, he is entitled to the injunction as a matter of right.”
On the other hand, the same authority limits the rule in that:
“The right asserted by complainant, however, must be perfectly clear and free from doubt, where the effect of a preliminary injunction will be more than merely the maintenance of the status quo, or where the injunction will cause defendant greater loss and inconvenience than that which will be suffered by the complainant in the absence of an injunction. In any event an injunction must be refused if the complainant’s case is so doubtful that it does not appear reasonably probable that he has the right claimed, and that is being violated, or if he does not mahe it appear reasonably probable that an irreparable injury is impending and will occur before the final hearing can be had” 22 Cyc. 753.
It is conceded that acts that will interfere with the conduct of complainant’s business tending to destroy his profits, do an irreparable injury, and authorize the issuance of a preliminary injunction, and especially that the enforcement of laws fixing unreasonably low rates for service by quasi public corporations will be restrained in proper Cases.
Complainant states that:
“The general rule of equity is that, on an application for a temporary injunction, it need not appear that the complainant will certainly be able to establish its claim, but only that there is a reasonable ground to believe that complainant may ultimately be successful in its claim, and, further, it is not necessary that it should clearly appear that complainant will ultimately succeed ; it being sufficient if he makes out a prima facie right.” 22 Cyc. 822.
This, of course, is the rule, but the same high authority also lays it down on page 783 that the discretionary power of the court in granting or refusing a temporary injunction should be exercised with a particular view to the relative amount of inconvenience or injury to be suffered by the parties. Especially is the rule extended to the interest of the public, respecting its injury or inconvenience.
Complainant’s counsel cites many authorities, among them the decisions of the United States Circuit Court of Appeals for the Eifth Circuit, as entitling complainant to a temporary injunction in this instance. These decisions, however, only emphasize and apply the general principles and rules to the particular cases under discussion, which brings us back to the basic principle of injunctions that the “granting or refusal rests in the sound discretion of the court under the circumstances of the particular case.’
[6] In the instant case, the Railroad Commission of the State of Alabama, under its authority, ordered complainant, South & North Alabama Railroad Company, to reduce its passenger rates between all points in the state of Alabama from 3 cents per mile to,2% cents per mile, on the ground that the 3-cent rate was unreasonable. Eliminating all other contentions of complainant as shown by its bill, which are unnecessary to be discussed for the purpose of this' decision, the *484issue here presented is whether the sought to be established rate of 2% cents is an unreasonable one.
Complainant is, without doubt or dispute, entitled to a fair return upon the reasonable value of its property devoted to the public service in Alabama. If the reduction of one-half cent per mile in its passenger rates, operates to prevent a fair return on its capital or value of its property in Alabama, then complainant is entitled to the benefit of the protection of the courts.
A 3-cent passenger rate had been heretofore charged by complainant. This rate, complainant admits, is fair, reasonable, and just, though such rates between points in Alabama (quoting complainant)—
“Rave never yielded as much as a fair, just return on the value of complainant’s property within the state of Alabama devoted to the service.”
To obtain the extraordinary relief sought herein, complainant must clearly establish the fact that its business in the state of Alabama, based upon a 3-cent rate,' is an unprofitable one — that is,, one not yielding a fair return on its value — and that a reduction of its passenger rate of one-half cent per mile would be such a substantial factor in further rendering its business an unprofitable one as to be confiscatory.
At the very outset the question arises as to the value of complainant’s property upon which it is entitled to a reasonable and fair return. What is the value of the total investment of complainant ? What is the amount of its earnings, freight and passenger? What proportion of expenses is charged to each department, and how finally is a result obtained which will establish the reasonableness or unreasonableness of its passenger rate? The valuation of the property, therefore, must be first considered. If an excessive valuation appears, then all estimates based thereon are necessarily open to attack, and cannot show true conditions.
. It was held in Minnesota Rate Case that present value is only to be considered, but that:
“The cost of reproduction method is of service in ascertaining the present value of the plant when it is reasonably applied, and when the cost of reproducing the property may be ascertained with a proper degree of certainty.”
Complainant estimates the total value of its property ori June 30, 1912, at $24,031,001.58. Defendants object to this valuation upon the basis of cost to reproduce all the physical property, less the amount of depreciation, as being excessive by from 4,000,000 to 5,000,000. Complainant’s estimate included the value of its franchise estimated at about 4,000,000, which was arrived at by taking the value as assessed by the State Tax Commission, which was supposed to be 60 per cent, of the full value, and raising it to 100 per cent, thereby improperly (as defendants contend) -adding nearly 2,500,000 to its estimate. Other items objected to were: (1) Interest during construction; (2) the value of the right of way; (3) addition of cost for "seasoning;” (4) apportionment of equipment to complainant by Louisville & Nashville Railroad; (5) material and supplies, and other minor items.
The court has carefully read the testimony and examined the record On this point, and it would seem the complainant has given itself the *485benefit of every doubt in arriving at its valuation, and thus has placed a “railway value” on its property when present value should govern.
Aside from this question, however, taking the valuation as fixed by complainant upon which it should be allowed a reasonable return, has complainant shown that the net passenger earnings on a 3-cent basis are not a fair return on the value of its property? It must establish this proposition before a 2%-cent rate could be claimed as confiscatory. Adopting its own valuation and its method of apportionment of passenger earnings and expenses, the court fails to see wherein a 2%-cent rate would be so unreasonable, arbitrary, and unjust as to entitle complainant to the injunction as prayed. The volume of business of complainant as shown by the record is increasing, it is enjoying a growing business. It is beyond dispute that the more business of this character done, the less the expense, for the reason that as passenger trains have to be run on schedule time, a certain equipment used, a train of coaches crowded with passengers can therefore be hauled and operated at the same expense required to operate a train of coaches with few or no passengers. Under the proof, under existing conditions, considered in the light of past experience, with both a 2%-cent rate and a 3-cent rate in effect, it is difficult to conceive that a reduction in its rate of one-half cent alone could or would opérate to that extent as to render a fair return impossible on complainant’s property devoted to passenger business.
On the theory that complainant, by reason of a 2%-cent rate, would lose $92,500 annually, with its passenger business steadily increasing with the country’s development,'if for no other reason, the future for it would indeed have a melancholy tinge. Passenger business would have to be discouraged, in fact refused, or bankruptcy would surely follow, graphically illustrating the paradox, “The more you win, the more you lose.” Certainly no hindrance or obstruction should be ever placed in the way of a transportation company, upon which the development of a country’s resources so much depend. A vital necessity exists for them, and unjüst and discriminatory laws enacted against them should be frowned upon, and public sentiment be directed to the community of interest and interdependence, one upon the other. Railroad companies should be allowed as a matter of simple right, as they are entitled under the law, to a reasonable return on their capital, and 'the court has most carefully considered this case, with this idea in mind, but is unable from the record to sustain complainant’s contentions on the application for a temporary injunction.
Great stress has been laid in this case to the fact that, since August 12, 1913, a 2%-cent rate has been in force on the Louisville & Nashville Railroad Company, which company is principal owner and operates complainant’s railroad. An application was made by the Louisville & Nashville Railroad Company for an injunction pendente lite to restrain the enforcement of an order of the Railroad Commission of Alabama, establishing a 2%-cent rate for that road. This application was heard before Circuit Judges PARDEE and SHELBY, and District Judge GRUBB, who held that the 2%-cent rate was not confiscatory, and the injunction was denied; that because of the relations of the Louisville & Nashville Railroad Company and this complainant^ *486no rate which had been held.not confiscatory as to the Louisville & Nashville Railroad Company could be, when applied to complainant, a mere division of the Louisville & Nashville Railroad Company; that because the Louisville & Nashville Railroad Company accepted the 21/2-centrate for itself and all its other branch lines in Alabama, and because, too, the density of traffic, both passenger and freight, of the complainant is enormously greater than on the aggregate other Louisville & Nashville Railroad Company Lines in Alabama, and that of any other road in Alabama, this complainant should not ask nor expect a higher passenger rate than its less fortunate competitors.
It was not considered necessary to discuss the Louisville & Nashville Railroad Company Case in order to arrive at a conclusion in this case, though in passing, the Louisville & Nashville Railroad Company Case preseiits many similar points of controversy, and the court is in full accord with that decision.
For the reasons.advanced herein, the court is of opinion that the temporary injunction should be denied, and the restraining order dissolved.