The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-03-21
A TRUST COMPANY LOSES
The Union Pacific Receiver
Will Retain Charge of
the Short Line.
JUDGES REVIEW THE CASE
The Application of Plaintiffs Should
Have Been Made to Wy
oming's Court.

PORTLAND, Or, March 20.-Judges Gill
bert and Bellinger to-day in the United
States Circuit Court rendered a decision
denying the motion of the American Loan
and Trust Company for the removal of the
Union Pacific receivers from the receiver
ship of the Oregon Short Line and Utah
Northern and the appointment of others,
with leave to the American Loan and
Trust Company to renew the motion after
the matters involved shall have been sub
mitted to the Circuit Court for the District
of Wyoming. After reviewing the case
Judge Gilbert said:
The disposition of these applications must
depend upon the effect to be given to the fact
that the Oregon Short Line and Utah Northern
Railway Company was first taken into the re-
ownership by the Circuit Court of the United
States for the District of Wyoming upon the
foreclosure of the Dillon mortgage. The court
had unquestionably jurisdiction of the subject
matter and of the parties. 1t was the proper
court for the institution of the suit The cor
poration defendant was organized under the
laws OF Wyoming, where had been its principal
place OF business. The fact that but a small
percentage of its railway lines is within that
State is unimportant. The right of the court
whose jurisdiction is first invoked over a cor
poration whose property lies in various dis
trlcts is not TO be measured by the proportion
ate extent OF the property interest in that jur-
isdiction. There is no rule that the court
within whose limits the greater portion of the
property is shall be the court of primary juris-
diction. 1t is sufficient that the corporation
had its home in Wyoming and had portion of
its property there.
The legal authority OF receiver extends no
further than the territorial limits of the iuris-
diction OF the court whose officer he is. Within
that limit his right of possession will be re-
spected by all other courts; without that limit
no court is bound to recognize his authority
But by principle OF comfy, courts whose
jurisdiction is exterior to that of the court
which appointed the receiver will concede
to the latter the right to reduce to his posses
sion and control the property of his trust which
may there be found. This comfy will not be
extended to the detriment OF local creditors of
the person or corporation whose property is in
receivership. By another rule OF comfy,
equally well established and universally recog-
nized by the Circuit Courts of the United
States, the action OF the Circuit Court which
first acquires jurisdiction Of the parties OF the
subject-matter of a suit by the appointment of
a receiver will be respected by the Circuit
Courts OF the other districts in which the prop
erty of the insolvent is situated.
! 1t is urged that if the Oregon Short Line and
| Utah Northern were operated under manage
ulcIiI NuOllY INDEPENDENT OF Vle L mon PaclNc
system, 1t would be free TO enter into traffic
contracts with other and competing roads. and
that thereby its earnings might be greater than
under the present management; and il is in
sisted that the lienholders of the road have the
| Eight to demand that the property over which
| their liens extend be segregated from the
| system, since the traffic agreement has been
| broken, and that it be free to be operated in
| such manner that advantage may be taken of
| its situation and surroundings to earn the
| greatest possible income for those who are in
terested therein, and this regardless OF the ef-
! feet that may thereby be produced upon the
remainder of the system.
If the Oregon Short Line and Utah Northern
Railway were susceptible of ACKNOWLEDGMENT
without injury to either portion if that por
ton OF its line within the State of Wyoming
were separate branch, capable of & separate
management, or If the action of this court
were necessary to the preservation of the rights
| ofthe lienholders by whom the applications are
made, it might be urged that a case is pre-
sented which would justify the court, in the ex-
ercise OF its discretion, to disregard the settled
rule OF comfy. But no such exceptional state
| OF facts exists. There is nothing presented in
I the record in these cases which makes the gem
eral rule inapplicable. The reasons which are
| urged for the removal of the receivers already
| appointed and the appointment of others in
! their stead have not been presented to the con-
s1derations of the Circuit Court for the district
| OF wyoming. That court has had no oppor-
| tun1ty to pass upon them. Those reasons ara
| as potent and convincing in that court as in
| TINS, and 1t must be assumed that all courts
| equally Will mete out to the sutton the justic
and the relief to which he is entitled