The Sun

THE INTER-MET. MUST DEFEND

JUDGE RAY OVERRULES DEMURRERS IN VENNER SUIT.

Merger, If Correctly Described, in the Complaint, a Monopoly and a Cause of Action Therefor Set Up—Receiverships Do Not Affect Conditions.

Judge Ray of the United States District Court overruled yesterday the demurrers interposed by the defendants in the suit brought by C. H. Venner's Continental Securities Company against the Interborough Rapid Transit Company, the Interborough-Metropolitan Company, the Metropolitan Securities Company, Thomas F. Ryan and others. The defendants now have thirty days to answer the complaint. The gist of the decision is that the merger as the complaint describes it is a monopoly and that therefore the complaint sets forth a cause of action.

The complaint asks to have the Interborough-Metropolitan Company adjudged a monopoly and not allowed to hold stock in the Interborough Rapid Transit Company; that the Windsor Trust Company, one of the defendants, and the Interborough-Metropolitan Company be required to surrender the pledged stock and that a receiver be appointed for the Interborough Rapid Transit Company. The bill alleges violations of section 7 of the stock corporation law of New York, of section 168 of the Penal Code and of section 80 of the railroad law. Judge Ray says:

The Century Dictionary thus defines monopoly:

'An exclusive privilege to carry on a traffic.' However it further says: 'The possession or assumption of anything to the exclusion of other possessors; thus a man is popularly said to have a monopoly of any business of which he has acquired complete control.' But even as first defined, an exclusive privilege to carry on a traffic,' the combination made (as described in the bill of complaint) constitutes a monopoly. The right given by the Legislature and city to each of the companies was as to its lines and territory exclusive. There could be no competition except by a further, legislative grant to some other company. When these companies combined their exclusive privileges they had an actual exclusive right to construct and operate railroads and transport passengers by railroads in and over that territory and the exclusive privilege to carry on that traffic. The combined action of the Legislature and capitalists was and is necessary to destroy or affect that right unless the combination was prohibited by statute: I think this just such a monopoly as was aimed at by the Legislature.

Of the contention of the defendants that if a monopoly did exist in violation of the statutes cited it was destroyed when the courts took over the control of the various surface lines and appointed receivers to operate them Judge Ray says:

I do not consider this to be the result of the action of the court in appointing these receivers. The same contracts and agreements and stock issues and ownerships exist as heretofore. The court in administering the affairs of the companies and in running and operating the roads must recognize and treat such contracts, &c., as valid and subsisting.

One of the demurrers was that the receivers were not joined as defendants. Judge Ray says that the receivers do not own the property or any part of it and that they are not necessary parties to the action. Further he says:

If it be a defense, as to which I express no opinion, that this vast combination, affecting the population of a city having some four million people and other millions who visit this city for business or pleasure, taking under one management and control and ownership all its parallel and heretofore competing railroad lines, with their feeders, is a benefit to the stockholders and the public, and that no injury has resulted or can result, that defense may be pleaded and the facts shown.

'The allegations of the bill are that injury has resulted and must result; that the rights of the public and of many stockholders have been invaded; that the statutes of the State have been and are being violated; that the combination described is illegal and injurious. Concede the premises and we have a proper case for the interposition of a court of equity.

Whether the policy expressed in the statutes be wise or unwise is a question with which the courts have nothing to do. It is their duty to ascertain the law and when appealed to to declare and enforce it.'