ll1'COY V.
c.,
I., ST. L. & C. B. CO.
able without regard to the citizenship of the The .condition of the bond sued on is in strict conformity with the condition prescribed by section 788 of the United States Revised Statutes. The exceptions filed raise the question, what is the proper constructioh of the condition, and consequently what is the proper construction of section 783? The court, in passing upon the exceptions, is required to decide what is meant by the words, "the faithful performance of said duties by himself and his deputies," as used in section 783, and to declare whether the acts complained of in the petition are or are not a violation of the condition of the bond prescribed by the statute. There can, therefore, be no doubt that the case is & removable one, and that the motion to remand should be overruled. NOTE. See J ack80n v. Simonton, 4 Cranch, C. 0.255; Killpatrick 2 Grant, 168. V. 81'011,
MoCoy fJ. C., I., ST. L. & C. R. Co. and another.(Circuit Court, 8. D. Ohio, W. D. July 31, 1882.) 1. AOTIONS AGAINST FOREIGN CORPORATIONS IN UNITED STATES CotmTS-SERVICE OF PROCESS UPON AGENTS. .
Where foreign corporations engage iil business in a state whose laws provide that they may be summoned by process served upon an agent in thereof, they are" found" in the district in which such agent is doing business, within the meaning of the act of congress of March 3, 1875, (18 St. at Large,470,) and. may be served in that manner in 8uits brought in the United States courts. Mohr tJ Mohr IJi8tilling 00. v. 1m. 008. 12 FED. R:s:P. 474, followed. 3. PuBLIC NATURE AND DUTms Oll' RAILROADS.
Railroad corporations are quasi public corporations, dedicated to the public use. In accepting their charters they necessarily accept them with all the duties and liabilities imposed upon them by law. Thus a {fUaBi public trust is created which clothes the public with an interest inthe use of railroads, which can be controlled by the public to the extent of the interest conferred therein. 8. .JURISDICTION' OF EQUITY-RAILROADS-INJUNCTION.
In the absence of some statute providing another' and different remedy, courts of equity have jurisdiction to enforce this quasi public trust, and compel railroad corporations to discharge the duties imposed upon them by law; and persons injured by the wrongful action or non-action of such corporations may seek redress by injunction, and are not bound to resort to proceedings in mandamu8 or to an action at law for damages.
4.
RAILROADS-DISCRIMINATION IN DELIVERING LIVE-STOCX TO STOCK-YARDSREMEDY.
A railroad company cannot bind itself to dellver to a particular stock-yard all live-stock coming over its line to a certain point, but it is bound. to trans-Reported bl J. O. Harper, Esq., 0[ the Olncinnati bar,·
4
FEDERAL port over its road and deliver to all stock-yards at such point, renched by its tracks or connections, all live-stock consigned, or which the shippers desire to consign, to them, upon the same terms and in the same manner as under like conditions it transports and delivers to their competitors i and the performance of this duty may be compelled by injunction at the suit of the proprietor of the stock-yards discriminated against.
In Equity.
Motion for preliminary injunction.
Ramsey d; Matthews, for complainant. Hoadly, Johnson x Colston, for defendant Cincinnati, Indianapolis, St. Louis & Chicago Railroad Company. Paxton &; Warrington and Stallo, Kittredge x Shoemaker, for defend-
ant United Railroads Stock-Yards Company. BAXTER, C. J. The facts in this case are few and simple. After averring that he is a citizen of Kentucky, and that the United Railroads Stock-Yards Company is an Ohio corporation, and that the defendant the Cincinnati, Indianapolis, St. Louis & Chicago Railroad Company is a corporation organized under the laws of Ohio, Indiana, and Illinois, the complainant charges that he is lessee of certain stock-yards, referred to in his bill, situated on the line of the Cincinnati & Baltimore Railroad Company's road, in Hamilton county, Ohio; that his yards are connected with said railroad by a suitable switch; that he is there engaged in the business of receiving, feeding, housing, and shipping live-stock; that the Cincinnati, Indianapolis, St. Louis & Chicago Railroad Company's road connects with the Oincinnati & Baltimore Company's road two miles south of complainant's yards; and that the said defendant is, by contract, in the use 'of that portion of said Oincinnati & Baltimore Railroad Company's road lying between said point of junction and complainant's yards, over which it is carrying on the business of a common carrier of livestock, making regular deliveries to, and receiving stock from, its codefendant, 10a4ed in cars standing on the track. He furthermore alleges such receipt and delivery of stock in cars on the track is necessary to the successful prosecution of his business, but that, in disregard of the obligations imposed on it by law, said defendant has entered into a contract with the United Railroads Stock·Yards Company, its co-defendant, whereby it has covenanted to make said United Railroads Stock-Yards Oompany's yards its depot for the receipt and delivery of all live-stock carried by it to and from Cincinnati, and obliged itself, in so far as it could lawfully do so, to deliver all live-stock carried by it to, or received for shipment from, Oincinnati to and from its co-defendant, and that, relying on said contract as a valid obligation and a sufficiellt .i ustification of its action
M'COY V.
I., ST. L. & C. R. CO.
5
in the premises, said defendant unlawfully and wrongfully refuses to receive stock from, or deliver stock to, complainant, except through the United Railroads Stock.Yards Company's yard, whose yards, it appears, adjoin the complainant's yards. Complainant thereupon prays for an injunction to restrain said defendant from so discriminating against it, and to compel it to receive and make deliveries of stock to him in the same manner and on as favorable terms as it receives from and delivers to complainant's said competitor. The application for a preliminary injunction came on for argument before me at Knoxville on the twelfth of July, 1882, when the Cincinnati, Indianapolis, St. Louis & Chicago Railroad Company filed its plea denying the jurisdiction of this court, because, as the plea avers, it is not a corporation of Ohio, as it alleged, but that it is a corporation under and in virtue of the laws of the state of Indiana alone. It does not, by its plea, deny service of process or raise any question in regard to its regularity or legal sufficiency. But the counsel insisted in argument that as defendant was an Indiana corporation, and a citizen of that state, it could not be lawfully served with process in this jurisdiction, atld that it was, therefore, not legitimately before the court. We need not stop to demonstrate that the question argued by coun· sel is broader than the plea, inasmuch as if such question was raised by the plea I would not hesitate to overrule it. We concede that corporations-mere ·legal entities-can only legally exist within the territorial limits of the sovereignty creating them; that they must dwell in the places of their creation, and can not migrate to other sovereignties. But it is as equally well settled that they can do business, if not inhibited by law from so doing, in foreign states and countries, and that they may be there sued in relation to the same. 1 Redfield, Railw. p. 63, § 4. Hence, if it were conceded that the defendant is an Indiana corporation, as alleged in its plea, it appears that it owns and operates· a railroad in Ohio, where its president resides and its principal office is located, and that it is there, by legislati"e permission, engaged in the business of a railroad carrier. If so, it is liable to be served with process in this jurisdiction. "This court," says Judge Force, of the superior court of Cincinnati, in a case recently decided by him, "has, by statute, jurisdiction of an action against a foreign corporation when such corporation can be found within the city. A corporation can be found where it can be served with a process according to
6
FEDERAL REPORTER.
law. A foreign corporation can be served with a summons accord. ing to law (in Ohio) by service upon a. managing agent." And about the same time Mr. Justice Matthews said, in a similar case, pending in this court, that "where foreign corporations establish an agency in a state whose laws provide (as in this) that they may be summoned by process served upon an agent, they are ·found ' within the district in which such agent is doing business, within the meaning of the act of congress of March 3, 1875, and may be served in the same manner in suits brought in the United States court." Mohr et Mohr Distilling Co. v. Ins. Co. 12 FED. REP. 474, and authorities cited in the note thereto. These adjudications are conclusive of the question attempted to be raised in this case. The defendant is duly before the court, and it only remains to be determined how far, if at all, tbe complainant is entitled to relief upon the facts herein stated. Railroads are potential agencies, constitute a very considerable part of the national wlilalth, and deserve to be fully protected in all their chartered rights. But while they are essential to the continued prosperity and to the further development of the varied resources of this great country, they are susceptible, when manipulated in the interest of selfish schemes, of being perverted to the most unjust and oppressive uses. They necessarily monopolize all inland carrying business, and if unrestrained can, by unjust discriminations, favor some individuals and communities to the very serious detriment of others. Hence the frequent efforts made to control them in the interests of individuals and communities. By establishing or abandoning a depot they can depreciate or enhance the value of private property, and by extending or withholding facilities increase the profits or inflict losses on all persons engaged in commercial or other pursuits dependent on their favor. An advance of two cents per bushel on the grain annually carried from the grain-producing west to the eastern cities, with a corresponding increase upon all other classes of freight, would impose a tax upon the industry of the country exceeding in amount the annual levies made by congress for the support of' the national government. If permitted, they can so regulate their freight charges as to exact from each locality dependent upon them the utmost farthing which the circumstances of each particular case and the absence of wholesome competition enable them to 'impose. For instance, where competition is sharp, they can carry passengers and freight over their entire lines for less than they charge for short intermediate distances, simply because in the cue case they are controlled by compe· tition, and in the other, in absence of such competition, they have
M'COY
v.
C.,!., ST. L. & C. R. 00.
7
it in their power to extort the utmost farthing whioh- suoh interinediate business is oapable of bearirtg. Those who have .them inoharge can organize side or oollateral busiuess enterprises, and so their roads as to seriously oripple their competit()rs and add to their own profits. These are but some of the possibilities inoident to· railroad management. Nevertheless, with all their capaoity for injustioe, they oannOt be dispensed with. But are their duties and - obligations to individuals and to the public to be measured by thejudgment of the-interested p8lrtiilsf using them to further their own selfish sohemes, or by the courts? . And if by the latter, to what extent may the courls:'go in supervising their aotions and in restraining abuses? These are gravequestiolls; which we will now endeavor to .. . answer. The greatandfundameiltal prinoiple on whioh we rest the oonclusions hereinafter stated is the conceded fact that railroad corporations are quasi publii:o corporations dedicated tothepublieuse. It is upon this idea that they have been invested with the power of eminent domain,the authority to take and appropriate private property to their use by paying a just compensation therefor. They have been created for the purpofile of exercising the functions and performing the duties of common ·carriers. Their duties and liabilities are defined by law. In accepting their charters they neoessarily aoceptthem with all the duties and liabilities annexed; that is to say, they undertake to oonstruct the roads contemplated by their several oharters; to .keep them in good condition; equip them with suitable rolling stock and safe maohinery; employ skilled and trustworthy laborers; provide suitable mean s of access to and egress from their trains; erect depots and designate stopping-plaoes wherever the publio necessities require t1.lem; supply, to the extent of their resources, necessary and adequate facilities for the transac.tion of all the business offered; deal fairly and impartially with their patrons; keep pace with improvements in railroad machinery, and adapt their service to the varying necessities and improved methods of doing business. The granting and acceptance of such charter creates a quasi public trust, and clothes the publio with an interest in the use of',railroads, whioh can be controlled by the public to the extent of the interest granted therein. Munn v. Illinois, 94: U. S. 126 to 134:, inclusive. But how and by whom can this quasi public trust be administered? The defendant insists that relief cannot be given by this court. .The contention is that all peraons injured in their property or persons by the wrongful action or non-action of a railroad corporation
8
can have adequate relief in a court of law by a suit to recover damages for the wrong done, or by mandamu8 to compel a fulfillment of its corporate obligations. These remedies undoubtedly exist; but is there no other and better remedy for the redress of such wrongs? Suppose defendant should entirely suspend its operations and refuse to run trains upon its road, it would be in default, and everybody injured thereby could sue and recover the specific damages sustained. But is the public without redress, and are the courts without power to interfere, at the instance of one or more individuals, and protect the public as well as individuals from the threatened deprivation of the benefits and advantages intended to be provided by the building of the road? Or suppose the defendant should ignore the claims of some populous neighborhood, whose business justified and whose necessities required depot accommodations for the receipt and discharge of passengers and freight, and in this way force the people of such locality to transact their business through a depot eight or ten miles distant-is there no redress except through a multiplicity of suits to be prosecuted at law by each injured party, or such relief as could be obtained through the tardy and inadequate process of mandamus? These remedies exist. But they are not the only means of relief. The defendant, by accepting its charter, assumed certain obligations in favor of the public in the nature of a qtlasi public trust, and the duty of enforcing the execution of this trust, in the absence of some statute providing another and different remedy, devolves upon courts' of equity. All matters of confidence and trust are within their peculiar cognizance. They may restrain or command, remove a trustee and substitute another in his stead, or execute the trust themselves, as the exigencies of each particular case may require. Their jurisdiction has been well established and defined. No court, I presume, exercising equity powers would hesitate, upon pi'oper application, to command the defendant, in the contingencies supposed, to provide a depot or operate its road, for the obvious reason that the road was authorized and built for and dedicated to the public, and the public has a right to use it; and if the officers representing the corporation were to refuse to execute the trusts repose'd in them, in the particulars mentioned, or in any other respect, it would be the imperative duty of the courts of equity, on due application, to interfere, and by an exercise of their extraordinary powers compel a faithful observance and discharge of all of its obli. gations. If these courts can lawfully do this, their supervising authority over such corporations to the extent of the public interest