Gilchrist v. Interborough Rapid Transit Co., 279 U.S. 159 (1929)

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Gilchrist v. Interborough Rapid Transit Co.

No. 159

Argued October 16, 17, 18, 1928
Reargued January 14, 15, 16, 1929
Decided April 8, 1929
279 U.S. 159

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

A New York street railway corporation, operating in the City of New York (1) subway lines belonging to and leased from the City, and which were part of the city streets, in connection with (2) elevated lines belonging to and leased from another corporation, and (3) extensions of such elevated lines, sought to increase the rate of fare, which had been fixed at five cents for all the lines by the leases and by the agreement under which the extensions had been constructed, and to that end proposed a seven-cent fare and applied to the Transit Commission of New York to sanction the change, on the ground that the existing rate was confiscatory. The commission, acting within the time allowed it by statute, made an order denying the application for want of power to change the rate fixed by the subway contracts, and brought proceedings in a state court, as did also the City, to compel the company to observe. that rate. On the same day when this formal action was taken, but earlier and when there was merely a consensus among the commission’s members that it should be taken, the company filed its original bill in the federal court alleging that the five-cent rate had become confiscatory and that the commission had failed to grant relief, and praying an injunction against any attempt on the part of the commission or the City to enforce that rate, or to interfere with the establishment of the one proposed, and thereafter it filed a supplemental bill reciting the action taken by .he commission after the filing of the original bill, renewing its prayer for an injunction, and especially asking that further prosecution of the proceedings in the state court be forbidden. The case, involving complex contracts and intricate state statutes, raised questions of state law, particularly as to the binding effect of the contract rate and the power of the commission to grant a higher one, which had not been authoritatively settled by the state courts. It was not shown with fair certainty that the contract rate was so low as to be confiscatory, that the one proposed in lieu was reasonable, or that, before the original bill was filed, the commission had taken or was about to take any improper action; the attitude of the commission on the questions presented had been manifested on former occasions; .there had been abundant opportunity to test the questions in the state courts, and there was no ground for anticipating undue dely or hardship from having them so decided.

Held that an order of the federal court granting the interlocutory injunction prayed was improvident, and an abuse of discretion. P. 207.

26 F.2d 912 reversed.

Appeal from an order of a district court of three judges granting an interlocutory injunction in a suit brought by the Interborough Rapid Transit Company against Gilchrist and other individuals constituting the Transit Commission, the same being the Metropolitan Division of the Department of Public Service of the City of New York; William A. Prendergast, as Chairman of that Department; The Manhattan Railway Company, and the City of New York. The Manhattan Railway Company filed a cross-bill praying affirmative relief against the other defendants. The order, among other provisions, restrained the commission and the City, pending the suit, from enforcing against the plaintiff a five-cent rate of fare upon the rapid transit lines operated by it, part of which were elevated railways leased to it by The Manhattan Company, and from preventing higher charges and from prosecuting actions in the state court. The commission and the City appealed, and the Interborough and Manhattan Companies appeared as appellees. An ancillary suit brought in the district court after the original bill in this case had been filed also resulted in an injunction. See 25 F.2d 164.