Opinion of the Court.

261 U.S.

In its opinion upon the second appeal the court reaffirmed the view expressed upon the first appeal and sustained the validity and operation of the state statute against the acts of Congress and the proclamation of the President, rejecting the defense set up that the carrier was an instrumentality or agency of the Federal Government, citing Missouri Pacific R. R. Co. v. Ault, 256 U.S. 554.

It was deduced from that decision that the Director General was to be treated as a Director General of each separate system of transportation and, that the separate systems being operated by the Director General, are separate parties within the meaning of the purposes of the Federal Control Act, and that, therefore, the judgment against the Mobile & Ohio Railroad Company was, in effect, in view of the substitution made, a judgment against the Director General of the Mobile & Ohio Railroad Company and that the Lumber Company was entitled to recover.

It was, however, decided that the Director General could not be required to pay the amount of the judgment into court but that the Lumber Company would have to secure it in a manner provided for by the Federal Control Act.

We think the decision of the Supreme Court is based on a misunderstanding of the Ault Case. The liability of the Texas & Pacific Railway Company occurred before the Mobile & Ohio Railroad Company passed under government control, and while the liability continued and the Texas & Pacific Railway Company was subject to suit after the assumption of such control, necessarily, the procedure had to be in accordance with the acts of Congress.

As to what this procedure should be, the contentions of the parties are in conflict. We have seen that the Supreme Court upon the first appeal, 119 Miss. 328, decided that a carrier, though operated under government

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Opinion of the Court.

control, might be subject to garnishment and that judgment could be rendered against it for a debt it owed to the principal defendant, and further, that the indebted company-in this case the Mobile & Ohio Railroad Company-could not plead any defense which was personal to the principal defendant-in this case the Texas & Pacific Railway Company. From these conclusions the court considered it was not precluded by § 10 of the Federal Control Act, which provided that no process, mesne or final, shall be levied against any property under such Federal control."

This makes the question in the case.

The Lumber Company contests the pertinency of the provisions and their control. It asserts that no decree in rem had been rendered in the case, and that "the final decree of the Supreme Court of Mississippi discharged the fund, and this court is dealing solely with a judgment in personam against the Director General, which there has been no effort to enforce." In other words, it is said, "The Supreme Court expressly released the fund and rendered a decree in personam, and not a word in the decree or the opinion relates to a refusal to pay the money into court, but the opinion expressly provides this is not to be done or any other sort of execution to issue."

And again, the contention is, that the Lumber Company was proceeding as it unquestionably had a right to, but for Federal control, and the Director General came into the suit saying in effect, 'because of Federal Control I am the one to sue "," and procured dismissal of the other defendants.

And further: "He cannot assume the liability for the purpose of raising or attempting to raise a federal question, and then deny the liability on the merits." It would be unjust therefore, is the contention, " now for the Director General to be even heard to say that he is not responsible for the debt", and "the natural consequences to

Opinion of the Court.

261 U.S.

follow his substitution, upon the grounds stated by him, was to render the decree against him as such substitute and he is complaining of the very ruling he himself invoked." And this, it is contended, contravenes the Ault Case.

The view is partial and overlooks antagonistic thingsoverlooks that the Mobile & Ohio Railroad Company was made a defendant through garnishment, attempting thereby to defeat the provision of the Federal Control Act which provides "no process, mesne or final, shall be levied against any property under such Federal control." And the prohibition was necessary to the unity and effectiveness of control in the President and, under him, in the Director General. Such is the ruling in the Ault Case where it is decided that the railroad systems could be "dealt with as active responsible parties answerable for their own wrongs," but it was also decided that "levy or execution upon their property was precluded as inconsistent with the Government's needs". "Thus, under § 10", is the declaration, "if the cause of action arose prior to government control, suit might be instituted or continued to judgment against the company as though there had been no taking over by the Government, save from the immunity of physical property from levy

To repeat, the right of suit against the carriers was decided, but there was also decided the exemption of their property from levy or execution. The garnishment proceedings against the Mobile & Ohio Railroad Company were an infraction of the exemption-an infringement of the prohibition of the proclamation of the President and congressional enactments. It is not excluded from the condemnation because it is a procedure under the statutes of the State.

The defense was seasonably made. It is to be remembered that the Mobile & Ohio Railroad Company, im

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Opinion of the Court.

mediately in the proceeding against it, attacked the jurisdiction of the court and adduced the proclamation of the President exempting the property of any of the railroad systems of the United States from process, and also adduced § 10. The attack was successful in the trial court. It was declared impotent by the Supreme Court of the State and the case was remanded for further proceedings in accordance with the law of the State, that is, in execution of the garnishment proceedings against the indebtedness of the Mobile & Ohio Railroad Company to the Texas & Pacific Railway Company. The Director General then entered the case and took up the contest commenced by the Mobile & Ohio Railroad Company against the law of the State and the jurisdiction of the state court to enforce it.

This the Director General did, and nothing more. In other words, the Director General contested the jurisdiction and power of the court to proceed against property under the control of the United States, and which the proclamation of the President and the statutes of the United States had exempted from state control.

Reversed and remanded for further proceedings not inconsistent with this opinion.

Statement of the Case.

261 U.S.

OKLAHOMA NATURAL GAS COMPANY v. RUSSELL ET AL., CONSTITUTING THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA, ET AL.

OKLAHOMA GAS & ELECTRIC COMPANY ET AL. v. CORPORATION COMMISSION OF THE STATE OF OKLAHOMA, ET AL.

APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF OKLAHOMA.

Nos. 406 and 419. Argued February 20, 21, 1923.-Decided March 5, 1923.

1. In its application to cases involving orders of state administrative boards, Jud. Code § 266 was not confined, by the Amendment of March 4, 1913, to those in which the constitutionality of a statute is challenged, but applies also where the order is attacked as in itself unconstitutional. P. 292.

2. A public service company which is being actually subjected to a confiscatory limitation of its rates imposed by an order of a state board, and which has appealed to the State Supreme Court for a revision of the order, pursuant to the state law, and been denied a supersedeas, is not debarred by the fact that the appeal remains undecided from obtaining injunctive relief from the federal court. P. 292. Prentis v. Atlantic Coast Line Co., 211 U. S. 210, distinguished.

3. Where the District Court has erroneously declined to entertain an application for a preliminary injunction, this Court as a general rule will remand the case for determination of the merits, and not decide for itself in the first instance. P. 293. Reversed.

APPEALS from orders of the District Court denying applications for preliminary injunctions to restrain the enforcement of state orders fixing the rates of the appellant gas companies.