The interest on the most of this indebtedness, and payable semiannually, is past due.

It has been stated already that this financial condition has not resulted from waste, extravagance, overcapitalization, excessive salaries, or bad management. As heretofore stated, to continue to operate this road under present conditions at the present rates of fare, fixed by the statutes referred to, is impossible, as it will result in defaults on the mortgages and foreclosures.

[20] The rates now established and charged and chargeable under such statutes are also confiscatory. See the following authorities: Stone v. Farmers' Loan & Trust Co., 116 U. S. 307-331, 6 Sup. Ct. 334, 388, 1191, 29 L. Ed. 636; Dow v. Beidelman, 125 U. S. 680, 8 Sup. Ct. 1028, 31 L. Ed. 841-843; St. Louis & San Francisco R. Co. v. Gill, 156 U. S. 649, 15 Sup. Ct. 484, 39 L. Ed. 567; Cotting v. Godard, 183 U. S. 97, 22 Sup. Ct. 30, 46 L. Ed. 92; Detroit United Railway Co. v. City of Detroit, 245 U. S. 673, 38 Sup. Ct. 8, 62 L. Ed. 541, decided January 13, 1919.

In St. Louis, etc., v. Gill, supra, the court said:

*

"A state law, which establishes a tariff of rates so unreasonable as to destroy the value of the property of a railroad company, may be held to be unconstitutional, as taking property without due process of law. As to whether a state law fixing the rates of fare requires a railroad company to do business at a loss and therefore constitutes a taking of its property without just compensation or due process of law, the correct test is the effect of the law on the entire line of such railroad."

There are phases of this matter to which I have not called attention, as I am of the opinion that the Quimby Case is intended by the Court of Appeals to hold that the Public Service Commission is without jurisdiction in any case to increase or, decrease a rate of fare which has been agreed to by the enactment of a statute fixing the maximum rate of fare, and followed by the granting of a consent by the municipality to the construction and operation of the road, and which consent specifies the rate of fare to be charged, assuming, of course, that the contract made by such consent and the acceptance thereof, and by constructing and operating the road, has not been modified or abrogated by subsequent action or agreement, and also that it is immaterial to the question of jurisdiction whether or not such agreement or contract was subsequently ratified or approved by legislative action. It ought to be the law, and I think it is the law, that when these several roads within the city of Binghamton became merged and consolidated pursuant to the general law into the Binghamton Railway Company, and extensions were thereafter made, all such contracts as I have mentioned were abrogated and annulled or became inoperative, and that thenceforth the rate of fare chargeable became that fixed by the general law. In this case it is claimed that some six or more valid contracts are in existence as to rates of fare on parts of this road, as now consolidated in one, and, if so, which is to control? Suppose all were substantially different as to rates of fare? The final consolidation resulting in the creation of this defendant, the Binghamton Railway Company, was effected December 6, 1901, under the pro

visions of the general law then in force, and there have been numerous extensions of the lines since, consented to by the city.

The defendant, Binghamton Railway Company, then became bound under the provisions of that law, so far as the city of Binghamton was concerned, to conform to the rates of fare and provisions as to rates of fare fixed by and found in that statute and subsequent statutes, irrespective of any prior contract or contracts or agreement or agreements as to rates of fare. After such consolidation and extensions the company could not, in the city of Binghamton, operate all these consolidated roads and extensions as one road, and still charge and collect a fare of 5 or more or less cents for a continuous ride within the city on each of these roads as fixed and provided by the alleged contracts. Thereafter it was to charge a single fare, fixed by statute, not by contract, for a continuous ride over those lines within the city of Binghamton. The subsequent legislation is to the same effect as to rates of fare. So far as necessary the statutes on this subject have been quoted hereinbefore. To all this the city of Binghamton has assented. It has availed itself of the terms and benefits of the consolidation, and of the law under which made, and I think the alleged contracts have been abrogated by mutual consent. In Knox v. Lee, 12 Wall. 457, 550, 551, 20 L. Ed. 287, cited and approved in Louisville & Nashville R. R. v. Mottley, 219 U. S. 482, 31 Sup. Ct. 270, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671, the Supreme Court said: "Long before the above cases were decided it was said in Knox v. Lee, 12 Wall. 457, 550, 551 [20 L. Ed. 287], that, 'as in a state of civil society, property of a citizen or subject is ownership, subject to the lawful demands of the sovereign, so contracts must be understood as made in reference to the possible exercise of the rightful authority of the government, and no obligation of a contract can extend to the defeat of legitimate government authority.'

It seems to me impossible to hold or find that any contract as to rates of fare now exists between the city of Binghamton and this railway company, or with either of the companies named, which interferes with the jurisdiction and power of the Public Service Commission to authorize the increased rate above suggested and recommended, which under the present circumstances and conditions is conservative.

There will be an appropriate order of authorization and direction to the receiver as to the roads where an increase is desired, such as is above indicated.

TEXAS CO. v. ATLANTIC REFINING CO.

(District Court, E. D. Pennsylvania. March, 1918.)

No. 5528.

1. PLEADING 343-JUDGMENT ON PLEADINGS-SUFFICIENCY OF GROUNDS. A judgment should not be rendered on the pleadings unless the right thereto is clear.

2. PLEADING 348-MOTION FOR JUDGMENT ON PLEADINGS-FINDING OF DAMAGES.

Motion by plaintiff for judgment for want of sufficient affidavit of defense denied, where, on the allegations of the pleadings, no finding of damages could be made as a basis for a judgment, and the right of recovery depended on questions which could better be ruled after the facts were developed on the trial.

At Law. Action by the Texas Company against the Atlantic Refining Company. On motion by plaintiff for judgment for want of sufficient affidavit of defense. Denied.

Foss, Walnut & Faught, of Philadelphia, Pa., for plaintiff.

Ira Jewell Williams and Brown & Williams, all of Philadelphia, Pa., for defendant.

DICKINSON, District Judge. This rule might be disposed of by an order simply allowing or refusing judgment. A "decent respect," however, for the opposing views of the parties and their counsel, who have discussed the questions involved with marked ability and clearness and brought to the aid of the court the fruit of much labor expended upon the preparation and presentation of their respective views, as well as the large sum involved, impels us to set forth with fullness the reasons which lead us to the conclusion reached.

The following general observations will show the grounds of the ruling now made:

Cases calling for a judicial judgment roughly classify themselves into uncontested and contested cases. We are concerned now only with contested cases. In each of these, as in the instant case, the court is asked to enter a judgment. Every judgment must proceed upon. some finding of fact. Sometimes the finding is made by a jury or other trier of fact and judgment is entered on the verdict. Sometimes the facts are found as asserted, or explicitly or tacitly admitted to be, by the party against whom judgment is rendered. If the defendant disputes, not the facts, but the right of the plaintiff to judgment on the plaintiff's statement of facts, the judgment rendered proceeds upon the finding that the facts are as averred by the plaintiff. If the plaintiff accepts the defendant's version of the facts, the judgment proceeds upon a finding of the facts as averred by the defendant, and the judgment is a like demurrer judgment. If no such finding can be made, all issues between the parties become trial issues.

The theory of the system of practice governing the entry of judgments assumes that the ultimate facts upon which the judgment is

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 255 F.-27

pronounced are either thus admitted or found, or that such evidential facts are admitted as permit of only one and that a certain ultimate fact finding.

[1] In the class of uncontested cases the machinery provided works with precision. It is only in some of the contested class that difficulties are encountered. Difficulties arise because the defendant throws into the machinery the proverbial "monkey wrench," which interferes with its operation. Every case has its psychology and its business or other ethics, as well as its facts, and the legal principles by which its. legal justice is determined. Sometimes a defendant is merely contumacious and obstructive. He has no defense to the action and knows he has none. Sometimes, however, there has been something in the transactions between the parties leading up to the litigation which causes the defendant honestly (whether mistakenly or not) to feel no sense of obligation to the plaintiff, and to deny any legal obligation to exist. Such cases, if the defendant can bear the expense of litigation, are always fought to the utmost and to the end, because the defendant is defending himself against what he believes to be legal injustice. Such cases should always be patiently heard and the defenses fully considered in order that courts may fulfill their established mission, which is, not merely to strive to do legal justice, or even to do it, but also to act with such circumspection and care that the appearance and danger of doing injustice may as far as is practicable be averted. It is the part of practical wisdom not to enter summary judgments in such cases unless the right of the plaintiff to judgment is clear. is not enough that the question raised may be ruled as a question of pleadings. As it may also be ruled as a trial question, it should be so ruled if the case is not entirely clear; and, on a view of the whole case, such is the better course to follow. This gives us a subdivision of contested cases into those in which there is no real, in the sense of honest, dispute, and those in which the dispute is real and honest on the part of the defendant, but perhaps baseless. If it is clearly baseless, however honest it may be, there is no justification for refusing. to plaintiff the judgment to which he is entitled.

The class which we have in mind is that of cases in which there are real disputes, the merits of which are not entirely clear, but which, when they are decided, are decided in favor of the plaintiffs. In the class of cases in which there is no real defense, if the defendant swears to a state of facts on which, if found, judgment could not be entered for plaintiff, the case must go to trial in order that the true state of facts may be found by a jury. If, however, the defendant merely denies that plaintiff is entitled to judgment, and makes an uncandid and evasive statement of facts in which no real defense can be found, and the purpose to merely delay judgment is sufficiently manifest, the court should enter judgment. The real ground of the ruling is the finding that there is no defense, and that the affidavit is evasive and a feature of mere dilatory tactics. As, however, in their rulings in entering or refusing judgments the accompanying opinions have not been confined to the bald statement of this ground for the ruling, but have sought support for the finding in the phraseology of the

affidavit, the reported affidavit of defense cases may be cited in aid of almost any theory which may be advanced. This is because the cases are misquoted, in that the real ground of the ruling is sought to be found in the words of the affidavit, instead of where it is to be found in the finding of a defense or no defense, to which finding the words of the affidavit are merely contributory. Erie v. Butler, 120 Pa. 374, 14 Atl. 153, is a cited instance.

Let us, discarding from the statement of claim and the affidavit of defense the purely jurisdictional averments, which are not called in question, analyze the respective averments of fact made by the parties, and thus determine to which of the classes, above referred to, the present case belongs.

The plaintiff's cause of action thus disclosed is that the parties entered into a written agreement bearing the date of March 14, 1916, supplemented by a paper writing dated March 15, 1916, by which the plaintiff contracted to sell and deliver in successive part shipments, and the defendant to accept and pay for, 150,000 barrels of oil at an agreed price. By the bargain thus made the defendant was bound to accept the oil, and the further averment is made that the defendant refused (in part) to accept, and that out of this contract and breach a cause of action has arisen.

There can be

The affidavit of defense as a presentation of the theory of the defense to the cause of action thus pleaded is criticized because of the absence of clearness and definiteness in statement. gathered from it, however, two thoughts. One is an unwillingness (at least) to admit that the contract is as set forth in the two writings Exhibits A and B.

The position taken in defense can be best stated circumstantially. The writing "A" is admitted to have been made and signed by both parties, but the inference that it thereby became the contract of defendant is denied, and the denial is supported by the averment of fact that it was not delivered, but had been signed and forwarded to be delivered upon condition that plaintiff should stipulate in writing that the defendant was not to be bound to accept further and future deliveries unless the earlier deliveries were found to be satisfactory in quality. Writing A was thus signed and committed to C. E. Bedford, to be delivered upon compliance with the above condition, or otherwise to be returned to defendant. Bedford, it is averred, was in this acting for plaintiff, but it is not averred that he had any authority from plaintiff to so act. The writing "B" is unilateral-signed only by plaintiff. Its receipt by the defendant is not denied, and a fair inference is that its receipt is admitted. A further fair inference is that it was at least intended by plaintiff to be a compliance with the condition imposed by defendant, of which plaintiff had been informed.

The defendant, at this point, might have challenged the judgment of the court upon the question of what was the contract-the one set forth in the paper writings, or the one set forth by defendant in this conditional delivery. This finding, however, we are not asked to make, but the affidavit of defense proceeds to the second thought, which is to challenge the correctness of plaintiff's construction of the contract