dissenting.
We have immediately before us only the plaintiffs’ application for a preliminary injunction (1) to vacate the orders of the I.C.C. in Finance Docket Nos. 14692 and 18656 in so far as it was ordered therein “that unless and until otherwise ordered by this Commission, said Alleghany Corporation shall be considered as a carrier subject to the provisions of Section 20(1) to (10), inclusive, and Section 20a(2) to (11), inclusive, of the Interstate Commerce Act, as amended, 49 U.S.C.A. §§ 20(1-10), 20a(2-ll), to the same extent that these provisions are applicable to the New York Central Railroad Company and its carrier subsidiaries and affiliates”; and (2) restraining the enforcement of the orders of said Commission in Finance Docket No. 18866 of May 26, 1955 (by Division 4 of the Commission) and of June 22, 1955 (by the Commission). The orders in said No. 18866 approved the substance and *150terms of an offer by the Alleghany Corporation whereby holders of its 5%%, Series A, preferred stock may, at their option, exchange their stock for stock in a new issue of convertible 6% preferred stock.
28 U.S.C.A. § 2284(3) provides power to grant “a temporary restraining order to prevent irreparable damage” which “shall contain a specific finding, based on evidence * * * and identified by reference thereto, that specified irreparable damage will result if the order is not granted.” (Emphasis supplied.) In context, the implication is plain that under the Urgent Deficiencies Act an order of preliminary injunction also must comply with this requirement. If there be any doubt as to the validity of that implication it is set at rest by Mayo v. Lakeland Highlands Canning Co., 309 U.S. 310, 60 S.Ct. 517, 520, 84 L.Ed. 774. That was a case in which, as here, a three-judge court had before it an application for a preliminary injunction. The Supreme Court held that the granting of the injunction depended on “whether the showing made raised serious questions” of law “and disclosed that the enforcement of the Act, pending final hearing, would inflict irreparable damages upon the complainants.” For present purposes 1 will assume that the showing before us raises serious questions of law and in this dissenting opinion will discuss only the showing made for its disclosure of the companion requirement of irreparable damage.
The application was submitted at a hearing, duly noticed, held on June 28, 1955 on a record of fact which includes only such facts as were admitted in the pleadings and affidavits in support and in opposition, no oral testimony having been offered. There was no stipulation that the submission made on the application should be deemed also to be a final submission on the merits.
The plaintiffs, who hold a comparatively small amount of Alleghany common stock1 contend, inter alia, that the orders of the Commission, in so far as brought under review in this case, are void for lack of jurisdiction in that on the applicable facts and under the applicable law (particularly 49 U.S.C.A. § 5(3) Alle-ghany was not a person which could lawfully “be considered as a carrier subject to” regulation under the Interstate Commerce Act. The status thus challenged is one depending upon a mixed question of fact and of law. Certainly it is so, and I think not disputed, that the Commission had at least jurisdiction to make a determination of Alleghany’s status and, on finding a carrier status to exist, to exercise the jurisdiction thus resulting. Thus, the situation is not one in which the challenged orders are void on their face. At most, the orders are voidable for error in connection with the finding of complex but essential jurisdictional fact.
For purposes of the application now before us, I make the following assumptions : (1) that when the plaintiffs’ complaint comes on for hearing on the merits, this court will set aside the orders under review for error in the finding of Alleghany’s carrier status and will remand the case to the I.C.C. for further consideration; (2) that eventually a valid order will be entered by that Commission and also by the S.E.C. to the effect that Alleghany is not subject to the Interstate Commerce Act and hence is not. excepted by the Investment Company Act. of 1940, 15 U.S.C.A. 80a-3(c) (9), from those investment companies which are-subject to that Act; and (3) that these plaintiffs have standing to bring this. action.2 Even so, in my view, for lack of *151sufficient showing of irreparable damage the plaintiffs are not entitled to the preliminary injunction sought.
The only facts upon which the plaintiffs appear to rely for the preliminary injunction are as follows. Alleghany proposes immediately to complete the distribution of an issue of convertible 6% preferred stock for distribution to holders of an outstanding 5% %, Series A, preferred stock in exchange, at the lat-ters’ option, for the Series A stock held by them. The distribution of the new stock, immediately upon entry of the I.C.C. order approving the issue, was partially accomplished before halted by the temporary stay order of this court (which was continued in force pending decision on the application now before us) and will be shortly completed (in so far as holders of the outstanding preferred stock elect to make the exchange) unless the injunction sought is granted. In the record as submitted, I find no other facts pertinent to the issue of irreparable damage. All else is by way of assertion and argument as to the impact on the plaintiffs’ rights, as common stockholders, of a distribution of the new stock if the distribution is completed before approval, or disapproval, by S.E.C.
The plaintiffs’ assertion of irreparable damage, if of any substance whatever, depends on the validity of their contention that the terms of the issue are such that it will necessarily or probably be disapproved by S.E.C. if and when, by hypothesis, it shall be submitted to S.E.C. That S.E.C. under the Investment Company Act might not approve the issue is, I concede a possibility. But the possibility is too remote for present relevance unless under the facts presently before us and under the provisions of the Investment Company Act It is reasonably certain that the issue would be disapproved by S.E.C. For this result, the plaintiffs in all their oral argument, and in their voluminous briefs cite neither chapter nor verse. I find nothing in the Investment Company Act which would preclude an approval of the issue by S.E.C. For aught that appears even if the injunction is granted and eventually the proposed stock issue is submitted to the S.E.C., that tribunal after full exercise of its investigative and regulative powers may approve the issue. If this shall prove to be the end result, the plaintiffs will have gained only such satisfaction as they may take from the fact that action which they dislike has the sanction of two tribunals instead of one. Deprivation of such emotional satisfaction is no more irreparable damage than the “sentimental” loss which was held to be insufficient basis for an injunction in Moffat Tunnel League v. United States, 289 U.S. 113, 53 S.Ct. 543, 77 L.Ed 1069.
In this connection, I do not overlook the conclusory assertion in the complaint, wholly unsupported by proof, that officers of Alleghany stand to gain, directly or indirectly, from the proposed issue of preferred stock. The possibility of gain has no connotations necessarily sinister. The issue has been approved by large majorities both of the preferred stock and the common stock. Presumably all who voted to approve expected gain. The achievement of that objective by others does not import damage to the plaintiffs,. *152If, however, the assertion was meant to insinuate conduct by directors violative of fiduciary responsibility, it suggests that this litigation may be motivated by a decision to embarrass management by fomenting investigations by S.E.C., or that its true objective is by S.E.C. investigations to obtain ammunition for a stockholders suit. Certainly loss of opportunity to give vent to malice is not the equivalent of irreparable damage. And it seems equally clear that plaintiffs are not entitled to an injunction merely because they would like to supplement the discovery provisions of the Federal Rules of Civil Procedure by S.E.C. investigations. The mere frustration of such a hope is not of itself “irreparable damage.” In this connection, it may be noted that by its report in Finance Docket No. 18866, the I.C.C. showed that it was fully apprised of the directors' stock interests in Alleghany.
My brothers point to the declared policy of the Investment Company Act to “mitigate and * * * to eliminate the conditions” which adversely affect “the interest of investors” * * * “when investment companies are organized, operated [or] managed * * * in the interest of directors, officers, •x- * */> They seem to hold that, even absent any showing of harm to these plaintiffs flowing from the assumption of jurisdiction by I.C.C. and absent any showing that the assumption of jurisdiction by S.E.C. will result in action more advantageous to their interest, they are entitled to the beneficent protection which the Investment Company Act provides against the improvidence or skulduggery of their own management. The possibility of deprivation of that protection, my brothers seem to feel, is proof enough without more to warrant the injunction.
I cannot agree. It is true that in their complaint plaintiffs allege that Allegha-ny’s affairs have been, conducted primarily in the interest of those in control. But for this we have only the plaintiffs’ bare assertion: no evidence whatever has ever been offered to support that allegation. My brothers make no finding on the point. Thus, for aught that appears this case does not even come within the policy declaration of the Investment Company Act which my brothers are assuming indirectly to enforce.
But that aside, I find nothing in that Act which gives investors in investment companies a right to enforce its policies. Section 42 of the Act, 15 U.S.C.A. § 80a-41(a), specifies that “The Commission shall permit any person to file with it a statement in writing” as to the subject matter of possible investigations but. leaves it to the Commission in its discretion to “make such investigations as it, deems necessary to determine whether any person has violated or is about to violate any provisions” of the Act. And by Section 80a-41(e) S.E.C. is given power “in its discretion” to bring actions, to enjoin violations in a district court. In the light of these carefully limited provisions I think it wholly inadmissible to interpret the Act as according to any private party, whether an investor or a potential investor, a right to enforce the policy of the Act as he conceives it to be. Nor do I think that this court, in the exercise of jurisdiction under the Urgent Deficiencies Act, has carte blanche to enforce its conception of the policy of the Investment Company Act. I conclude that at most these plaintiffs may derive an incidental benefit under the Investment Company Act; that the deprivation of such a benefit, which the plaintiffs concede has no measurable pecuniary value, is not “irreparable damage.”
Further, my brothers seem to feel that the plaintiffs are entitled to the injunction sought because without it the proposed issue will be accomplished and, at least as a practical matter, the immediate cause of controversy will become moot. Granted that they are right as to the postulated result, I submit that the conclusion based thereon is faulty. The extraordinary and drastic remedy of injunction is not the product of a slot machine into which any disgruntled stockholder can insert a nickel. It does not issue in every case as of right merely to preserve the status quo pending final de*153■termination of the merits. Nor is its function merely to support hopes or malice. It issues only at the discretion of the chancellor on a showing of irreparable injury. And that injury must be more than a vague statement of a remote and contingently potential harm. This principle was recognized — although, to be sure, in quite a different setting — in State of New Jersey v. Sargent, 269 U.S. 328, 46 S.Ct. 122, 70 L.Ed. 289; State of Arizona v. State of California, 283 U.S. 423, 51 S.Ct. 522, 75 L.Ed. 1154; Commonwealth of Massachusetts v. Melon, 262 U.S. 447, 48 S.Ct. 597, 67 L.Ed. 1078; and Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 53 S.Ct. 345, 77 L.Ed. 730. I am not so much concerned by the possibility that the proposed stock issue may in the long-range future turn out to be disadvantageous to the common stock. After all that is essentially a question of business judgment primarily for management which in the normal course minority stockholders must accept. Here management has made its decision and the decision has been affirmed by a large majority of the voting stocks and approved by the I.C.C. To be sure, Alleghany may eventually be found to be subject to the Investment Company Act, with a result which may, or may not, be more advantageous to common stockholders. The loss of this remote and contingent advantage the law does not, I think, classify as irreparable damage.
Consequently, in the situation here, I am more concerned with the hardship that the injunction will impose on others. From the affidavit of Alleghany’s secretary-treasurer received in opposition to the injunction sought, I find that the effect of the injunction will be seriously to embarrass Alleghany (a) in obtaining the renewal of various bank loans aggregating $8,200,000 which will mature on or about September 15, 1955 and (b) in its negotiations for refunding these loans on a more favorable basis. As a result it may become necessary to pay off the loans and for that purpose to liquidate part of its portfolio. (In this connection, I think it may be inferred that the most favorable terms cannot be obtained by forced liquidation to meet a fixed deadline and that such a liquidation, whatever the terms, is likely to interfere with investment policies). I find further that it will be necessary, if Alleghany is to maintain its policy of parity of representation between outstanding preferred stock issues and the common stock on its Board of Directors, for it either to pay in full the large arrearages of dividends on the 4700 shares of Series A preferred stock which declined to accept the offer of exchange for the new 6% issue, thereby stripping that small block of the right to elect two directors, or to redeem that block of stock. Notice to redeem the stock cannot be given as long as an injunction precludes the distribution of the 400,000 shares of the new preferred still awaiting exchange, and even then under the Alleghany charter redemption can be accomplished only on a stated quarterly dividend date. If this course is precluded by an injunction, to maintain its policy of class representation Alleghany will be required to pay off the arrearages in dividends on this block of stock, — a course which is far more burdensome, tax-wise, to the stockholders involved than redemption which would classify as a capital transaction.
Further, I find from the affidavit of the intervenor Blatt, that at least 100,000 shares of the new preferred stock were traded on a “when issued” basis between May 26, 1955 and June 22, first in the over the counter market and commencing on June 8, 1955 on the New York Stock Exchange; and that trading therein proceeded in a substantial volume on an actual basis on June 24 when further trading on the New York Stock Exchange was suspended because of the stay order herein. From this it is fairly inferable that trading in the stock will not be resumed on the Stock Exchange if the stay order ripens into a preliminary injunction. The further inference is required that during the pendency of an injunction the marketability of the new stock which was issued, and consequently its *154value, will be substantially impaired and its acceptability as collateral will be largely destroyed. It is further inferable that an injunction which precludes stockholders who deposited their Series A stock for exchange from receiving the new stock will intensify the confusion and the hardship caused them by the stay order. Their rights, during the penden-cy of an injunction, to a return of the deposited stock and the obligation to return it involve complicated legal questions which may well require protracted litigation for resolution.
These findings I have tested against the affidavits of Mr. Phillips, one of the plaintiffs who has appeared throughout, pro se. His main affidavit shows that he is indeed a man of experience in the field of finance: that for a time prior to November 1941 he was “Executive Assistant” to the Chairman of Alleghany’s Board. He states that “In July 1953 I became Financial Consultant to Alle-ghany Corporation and the C. & O. I was the first expert to be consulted by Mr. Young and Alleghany Corporation in connection with the contest for control of New York Central by the Alleghany-Young-Kirby nominees. Thereafter I was a member of the strategy board that successfully developed and executed the subsequent proxy campaign.” But notwithstanding this background, neither by his main affidavit nor his reply affidavit does he show facts — as distinguished from self-serving conclusions — which controvert my findings as above stated. As to the damage to Alleghany which would result from an injunction, he bases his conclusion vaguely on his alleged knowledge of Alleghany’s affairs as an insider. But he does not directly assert status as an insider subsequent to July 1953. He also professes to have “general knowledge of I.C.C., S.E.C., and banking practice.” On this basis he offers as proof only his assertion of the very proposition which it was for him to prove, viz.; “there is no substantial difficulty which will face Alleghany in the renewal of its $8,200,000 loan, due on Sept. 15, 1955.” He says that Alleghany’s annual report for 1954 showed “marketable se» curities on hand with an indicated market quotation of $67,944,633. He did not explain how these securities can be liquidated without loss or interference with investment policies before a deadline two months distant. And as to the impact of an injunction on Alleghany’s negotiations to refund its bank loans, he says nothing. As to the impact of an injunction on the composition of Alleghany’s Board he seems to think that there is no limit to the extent to which this court can officiate as Alleghany’s Board, saying; “it is obvious that this Court of Equity has full power to deal with the situation and to indicate that all holders of the Series A and the 6% Preferred Stock, together, should be entitled to elect two directors.” As to this, he assumes more knowledge of the powers of a chancellor than I, at least, possess.
As to the injurious effect of an injunction on Series A stockholders, Mr. Phillips says only that some at least may have deposited their stock as early as February 10, 1955 and thereby voluntarily consented that it should be “frozen” until the closing date of the exchange offer. He does not exclude the possibility that such stockholders might normally be expected to withhold deposit until the closing date was near at hand and deposit then in reliance on the terms of the exchange offer whereby they would receive marketable stock on a fixed date in the near future. He argues that because for a limited period accepting stockholders voluntarily assented to a freeze until a fixed date, it must follow that they will not be injured by an involuntary freeze continued into the indefinite future while this litigation winds its weary way through the courts and the two Commissions. I think the argument specious: without relying on the cries of anguish from frozen stockholders which were expressed informally at the hearing on this application, I think my findings of injury to them as above stated are clearly required as the only sensible inferences from proved facts.
*155■ The proved hardship to Alleghany and preferred stockholders is perhaps irrelevant if, as I think, plaintiffs have made no showing at all of irreparable damage. If, however, an appraisal of the record affords some support for a possible finding of such damage to them, I think the impact of injunction on Alleghany and the intervenors is a solid factor which should be given appropriate weight in the formulation of our discretion.
Lastly, I think it not permissible on the submission of a preliminary application which raises the issue of irreparable damage, to proceed, at least in the setting of this case, to a determination of the underlying merits. I freely concede that for its impact on the validity of the orders under review the exegesis of my brothers demonstrates that the showing made is enough to satisfy the first requirement of the quotation in an early page in this opinion from the Mayo opinion, viz., the existence of “serious questions” of law. But their exegesis, even if sound, goes no further than to demonstrate that the plaintiffs have solid ground for attacking the underlying jurisdiction: it does not reach the issue of irreparable damage. Before it can be reflected in a final decree, the defendants and intervenors are entitled as of right to a trial on the merits. At the trial the claim of irreparable damage will be in issue and may be expected to provoke a record of fact not now before us, on the basis of which the right to a permanent injunction must be determined. Even if, after trial, the court feels constrained to annul the orders under review for error in the proceedings before the Commission or in the Commission’s jurisdictional findings, it may nevertheless decide that on the record as then made for lack of irreparable damage to the plaintiffs no injunction should issue to restrain Alleghany from completing the stock distribution. Such a disposition would leave Alleghany free to proceed at its own risk in confidence, if so advised, that on appeal the orders annulled would be reinstated. Surely the preliminary injunction now sought should not be granted merely because it is presently thought that at a later stage this court will annul the orders under review.
My conclusion is based not at all upon Alleghany’s offer made in open court at the hearing to post a bond in a principal sum exceeding many times the value of the plaintiffs’ stock to indemnify them from any loss resulting from the accomplishment of the proposed stock distribution. Nor am I affected by the plaintiffs’ indifference to that offer. Since we are not now concerned with an application for a supersedeas bond, I view the offer as irrelevant.
I would terminate the stay order forthwith and deny the application for a preliminary injunction.
. An intervenor has computed the plaintiffs’ interest as comprising only .002% of the outstanding common stock.
If plaintiffs’ standing to sue is predicated upon a threatened loss of the protection afforded by the Investment Company Act, 15 U.S.C.A. § 80a-l et seq., it is difficult for me to reconcile my brothers’ holding on this point with Pittsburgh & W. Va. Ry. Co. v. United States, 281 U. S. 479, 487, 50 S.Ct. 378, 74 L.Ed. 980. Eor I find nothing in that Act which suggests that it was intended, or is effective, as a protection peculiar to common stockholders. Nor have plaintiffs *151shown that os common stockholders they have peculiar need of protection under that Act not available to all classes of Alleghany security holders under that Act. The Pittsburgh plaintiffs were held to he without standing because their ■“financial interest does not differ from that of every investor” in the Company. Even if it were so that the interest of these plaintiffs to protection under the Investment Company Act is as efficacious for purposes of standing to sue as a ■“financial interest,” nevertheless it would seem to me to be an interest which “does not differ from that of every investor” in Alleghany securities. In New York Central Securities Corp. v. United States, D. C., 54 F.2d 122, 287 U.S. 12, 53 S.Ct. 45, 77 L.Ed. 138, the plaintiff’s standing was not based on a claim of right to protection under the Investment Company Act. ^Reorganization cases and cases under 49 U.S.C.A. § 20b involving the involuntary modification of rights of security holders are not pertinent to the standing of these plaintiffs.