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On the other hand, the evidence convicts the steam tug of neglect of duty on her part, and the law requires the loss to be divided. After having undertaken to tow the Alcalde to sea, it was her duty to exercise ordinary care and vigilance for the safety of her tow until her contract had been completely performed. The Margaret, 94 U. S. 191, 24 L. Ed. 146.
There was negligence in her management and breach of duty on her part in two particulars: In the first place, the two schooners were not spaced with sufficient distance between them. In view of the warning of danger given by the increasing velocity of the wind on that day, ample room should have been allowed for paying out sufficient chain to afford the greatest security, but, on account of her position to the windward and upstream and the lack of sufficient distance between them, if the Alcalde had paid out as much chain as the W. J. Patterson did, a collision would have been almost inevitable. In the second place, the facts that the Alcalde's port anchor chain broke as soon as she began to pull on it, and that the tug did not render assistance when she commenced to drift, proves that she was left to her own resources with undue haste. In the condition of the weather then prevailing, the tug had no right to go away until after her tow had been securely anchored. Connolly v. Ross (D. C.) 11 Fed. 312; Hastorf v. Governor (D. C.) 77 Fed. 1000; Hughes v. Railroad Co. (D. C.) 93 Fed. 510; The Thomas Purcell, Jr., 92 Fed. 406, 34 C. C. A. 419; The American Eagle (D. C.) 54 Fed. 1010; The Snap (D. C.) 24 Fed. 510; The Battler (D. C.) 55 Fed. 1006.
The libelants contend that the tug was in fault for not proceeding to take the Alcalde directly to sea on the day of starting, notwithstanding the condition of the tide and the threatening weather. The most that can be said with regard to the argument on this point is that there was a possibility of success in such an undertaking. The captain of the tug, however, had a pilot's responsibility. He was required to act with discretion, and would have been responsible if a disaster had resulted from any lack of prudence in attempting to cross the bar under the conditions stated. Humbolt Lumber M'fg Ass'n v. Christopherson, 73 Fed. 239, 19 C. C. A. 481, 46 L. R. A. 264. His conduct must be judged by circumstances which necessarily had to be considered at the time, rather than by theories based upon afteracquired knowledge. I therefore acquit the respondent of all blame and responsibility in this particular, and I hold that it is liable for half the damages only, for the reasons above stated. I grant the respondent's request for leave to amend the answer by denying that the value of the Alcalde at the time of the loss was greater than $3,000, in order to have the benefit of that issue if desired in an appellate court. Notwithstanding the amendment, however, I find the value of the vessel with her equipment and stores to have been $10,000, and the value of the personal effects of Capt. Harris to have been $700, making the total loss $10,700 to be divided.
Accordingly, I direct that a decree be entered in favor of the libelants for $5,350, and that the total amount of taxable costs be divided equally.
PERKINS et al. v. NORTHERN PAC. RY. CO. et al. KENNEDY et al. v.
GREAT NORTHERN RY. CO. et al. WOODWARD et al. v. CHICAGO,
Nos. 857–865, 870.
A suit to enjoin state officers or a state commission from enforcing a state statute or regulation fixing maximum railroad rates is not one against the state, of which a federal court is prohibited from entertaining jurisdiction by the eleventh constitutional amendment; no property or revenues of the state being affected by such suit.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 13, Courts, $ 84442.
Federal jurisdiction of suits against state, see note to Tindall v. Wes
ley, 13 C. C. A. 165.] 2. EQUITY-PLEADING-MULTIFARIOUSNESS OF BILL.
A bill which seeks to enjoin the Attorney General of a state from taking steps to enforce state statutes fixing railroad rates is not multifarious because it also joins the members of the State Railroad and Warehouse Commission as defendants, and asks an injunction restraining them from enforcing an order made by them under legislative authority also affect
ing rates. 3. CORPORATIONS-SUITS BY STOCKIIOLDERS-CONDITIONS PRECEDENT.
Stockholders in corporations, who made demand either upon the directors or the managing officers of their corporations to refuse to comply with a state statute alleged to be unconstitutional, and whose demands were in each case refused on the ground of the severe penalties imposed by the statute upon such officers and directors for their failure to obey its requirements, held to have sufficiently complied with equity rule 94 to entitle them to maintain a suit in a federal court to enjoin the corporation from complying with such statute.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations,
§ 793.] 4. CARRIERS-STATE REGULATION OF RATES-DETERMINATION OF VALIDITY.
Where a state enacted successive regulations of rates to be charged by railroads on intrastate business, each of which necessarily affected the earnings of the railroad companies, the validity of such regulations as to whether they are unconstitutional as confiscatory is to be considered separately; the first without reference to the subsequent ones, and the
latter with reference to the effect of those previously enacted. 5. COURTS-JURISDICTION OF FEDERAL COURTS-FEDERAL QUESTION.
A suit to enjoin the enforcement of state enactments regulating railroad rates, on the ground that the same are confiscatory and would deprive the railroad companies of their property without due process of law and deny them the equal protection of the laws, in violation of the fourteenth constitutional amendment, is one arising under the Constitution of the United States, of which a federal court bas jurisdiction on that ground.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 13, Courts, &$ 820, 822.
Jurisdiction in cases involving federal question, see notes to Bailey v.
6. INJUNCTION-PRELIMINARY INJUNCTION-GROUNDS FOR DENIAL.
Where rates of charge by railroad companies for the intrastate carriage of commodities and passengers have been fixed by the state, and such rates have been accepted and put into operation by the railroad companies, a preliminary injunction will not be granted at suit of stockholders of such companies to restrain further enforcement of such rates by the state or obedience thereto by the companies; the legitimate purpose of such an injunction, except in cases of fraud, being to preserve the status quo pending a final hearing on the merits.
[Ed. Note.—For cases in point, see Cent. Dig. vol. 27, Injunction, $$
302-306.] 7. CARRIERS---STATE REGULATION OF RAILROAD RATES-CONSTITUTIONALITY OF
A preliminary injunction granted restraining the putting into effect of Act Minn. April 18, 1907 (Laws 1907, p. 313, c. 232), fixing rates for the carrying of commodities by railroads within the state on the ground that such rates, if enforced, in connection with reductions in both commodity and passenger rates made by prior acts, would on the showing made be confiscatory, and would deprive the companies of fair compensation for the services performed and a fair return on the property invested.
In Equity. On motions for preliminary injunctions and demurrers to bills.
How, Butler & Mitchell, Robert Thorne, and Robert A. & Henry W. D. Forest, for C. E. Perkins, J. S. Kennedy, J. T. Woodward, C. Livingston, G. S. Brewster, W. Shillaber, J. J. Carle, and H. A. James.
Stiles W. Burr, for J. A. Humbird.
E. T. Young, Thomas D. O'Brien, Royal A. Stone, C. S. Jelley, and George T. Thompson, for Atty. Gen. E T. Young and Railroad and Warehouse Commission.
William C. Bicknell, for J. R. Reeve.
Stringer & Seymour and R. A. Jackson, for Chicago, R. I. & P. Ry. Co.
LOCHREN, District Judge (orally). Gentlemen, I feel that it is a subject of congratulation that through this long-continued contest there has been such uniform courtesy displayed by counsel on both sides, not only towards the court, but towards each other. The cases have been fully and ably presented to the court, upon both sides. If circumstances permitted, I should be glad to give the cases further consideration than I feel myself able to. In view of the necessity of attending to other business, and especially in view of the fact that the October term in Minneapolis is coming on, I think it better that I dispose of the cases according to my first impressions than to detain them for further examination, which would hinder the ultimate settlement of the issues.
These suits have been brought by one or more stockholders of each of nine railroad companies doing business within the state of Minnesota, and each of them also engaged in interstate business, claiming that the rates fixed by the Railroad and Warehouse Coinmission, and which have been termed by counsel the “Merchandise Rates," as well as the rates fixed by the Legislature of the state by the act of April 4th of the present year (called the "Passenger Rate Law"), and the rates also fixed by the Legislature by the act of April 18th of the present year (chapter 232 of the statutes of this year [Laws 1907, p. 313]) are so low as to not afford adequate compensation to the railroad companies for the services that they are required to perform and a reasonable return upon the property which is invested by these railroad companies, and used in the business, and therefore are confiscatory under the provisions of the Constitution of the United States that no state shall deprive any person of life, liberty, or property without due process of law, or deny equality under the laws; that the requiring of the railroad companies to do business at these rates would not afford adequate compensation, and are equivalent to taking their property without due process of law. These bills of complaint are met by demurrers upon various grounds, one of which is that, being brought against the Attorney General and other state officers, but especially the Attorney General, they, in fact, amount to actions brought against the state, which are prohibited, so far as the federal courts are concerned, by the eleventh amendment to the Constitution of the United States. This matter I disposed of at a preliminary hearing, contrary to that contention, holding that, although the state is interested in this matter, these suits are not, in terms nor in necessary effect, actions against the state. No property of the state is affected, no revenues of the state are affected, by the result of the litigation, and although the eleventh amendment to the Constitution prohibits suits, or actions, against the state, by citizens of another state or of a foreign country, the fourteenth amendment provides that the state shall not deprive any person of life, liberty, or property without due process of law. There must be some way to enforce that provision of the Constitution. It is a provision which requires no action of Congress to make it effective. It is a prohibition against the state, and, if the state by any act attempts to deprive any one of life, liberty, or property, without due process of law, the courts must provide some adequate remedy for the protection of such person. It would be a reproach to the courts did they fail to provide an adequate remedy in a case of that sort. And it is unnecessary in these cases to hold that the eleventh amendment would be ineffective as against the later provision, in the fourteenth amendment, if the remedy can be reached in another way; and it seems to me that it can-by tying the hands of the officers of the state, if necessary, in a proper action, and restraining them from attempting to enforce or put in effect a provision of the law of the state which is unconstitutional under the terms of the fourteenth amendment. This has been done in so many cases that it seems to me it does not now require argument to sustain that position, and I therefore hold that that ground of the demurrer is not well taken.
Another ground is that the bills are multifarious, in joining the Warehouse and Railroad Commission and the Attorney General, because the acts complained of are separate and distinct acts and the acts of different bodies. The order of the Railroad and Warehouse Commission, of September 6th of last year, was promulgated by that commission under the authority of a legislative act, and, as has been decided in many cases, such an order has the same effect as a legislative act; that is, that the Legislature has a right to empower administrative bodies to act in respect to this matter of rates and other matters of regulation concerning public corporations engaged in the business of transportation, so that its order has the same effect as a legislative act. And the other two acts complained of are acts passed by the Legislature. They all amount to legislation that has been put forth by the state, and it seems to me that complaints against all these acts may properly be joined in one action, and that the Railroad and Warehouse Commission have such charge in respect to the enforcement of these rates that they can properly be made defendants in an action of this kind, as well as the Attorney General.
Another objection is that the bills do not show compliance with the ninety-fourth equity rule; such compliance being necessary to permit actions of this sort to be brought by stockholders. Whereas, matters in which a corporation is concerned are properly under the management only of the officers and directors of the corporation, who should ordinarily be parties to an action to enforce corporate rights, and providing that such suit will not be allowed to be maintained by a stockholder unless it appears that he has first applied to the officers and directors of the corporation, demanding that they should enforce the rights which he complains are being infringed, and secure the safety of his property; the property being, of course, ultimately the property of the stockholders, and only upon their refusal to do so will he be allowed to bring an action to protect himself. It seems to me that that has been done sufficiently in these cases. In every one of them an application has been made, either to the directors or to the controlling officers of the corporation whose duty it would be, in a proper case, if it was necessary, to call a meeting of the directors to act upon the matter, and either where the directors have met together, or where the matter has been disposed of by the officers, the stockholders have been met with a direct refusal to take any action to protect the property against these alleged illegal attacks upon it. The reason alleged by the officers of the company and by the directors for not taking such action was, not that they soubted or denied the claim of the stockholders that this order and these acts were confiscatory, and null and void under the Constitution, but that by the provisions of the acts themselves such severe penalties were denounced for any attempted violation of the acts that they ought not to be called upon to incur the danger of those penalties, and would not assume that danger, and, for that reason, would not act in the mat