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Law School Case Brief

Smyth v. Ames - 169 u.s. 466

Rule:

The adequacy or inadequacy of a remedy at law for the protection of the rights of one entitled upon any ground to invoke the powers of a Federal court, is not to be conclusively determined by the statutes of the particular State in which suit may be brought. One who is entitled to sue in the Federal Circuit Court may invoke its jurisdiction in equity whenever the established principles and rules of equity permit such a suit in that court; and he cannot be deprived of that right by reason of his being allowed to sue at law in a state court on the same cause of action.

Facts:

Plaintiff stockholders filed suit against defendant railroad companies challenging the constitutionality of 1893 Neb. Stat. 24 (Act), which reduced rates for local freight. The stockholders claimed that the Act deprived the railroad companies of the right to obtain just compensation. The circuit court ruled that the reduction in rates was unjust.

Issue:

Is the law fixing the maximum rates to be charges for freight transportation of railroad unjust?

Answer:

Yes.

Conclusion:

The Court affirmed the lower court's decree and held that there was no ground for concluding that the operating expenses of any of the railroad companies were greater than necessary. A general reduction of rates could not have been made without injury to the business of the state and to the interests of the stockholders, whose means were invested in railroad property. A corporation performing public services and the people financially interested in its business had rights that could not be invaded by legislative enactment in disregard of the fundamental guarantees for the protection of property.

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