The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-09-03
Cited to Appear in Court to
Answer to the Charges
Preferred.
JENKINS DECLARED IN ERROR.
Ing the Entire MANAGEMENT of
the Road.

them in an affidavit filed recently by Presi-
dent Brayton Ives of the Northern Pacific
Railway Company. AS to the validity OF
the S., 000, 900 certificates issued by the re-
ceivers, with the consent of Judge Jenkins,
the court holds that they are not valid and
are not liens against the Northern Pacific
property unless confirmed by courts of
jurisdiction.
Judge Hanford ordered the receivers to
give bonds to this court, and hereafter the
entire management of the great Northern
Pacific property will be under the direction
of Judge Hanford.
Two decisions were rendered, that of
District Judge Hanford and that of Circuit
Judge Ebert. They hold absolutely that
Judge Jenkins had no authority whatever
to appoint receivers for the property. In
their decision Judges Gilbert and Hanford
in part say:
We find in this case no question attacking
the jurisdiction of the Circuit Court for the
eastern district OF Wisconsin. 1t must be con-
ceded that that court had jurisdiction to ap-
point receivers, take into its possession the
property of the railroad company that was
within its territory, and to remove the same.
The question for consideration here is not one
pending before it, but it is whether or not that
court is to-day the court of primary jurisdic-
ton for the management and control of the
property of the Northern Pacific Railroad Com
pany in the hands of receivers, and whether
the rule of comfy, as settled by the decisions
of courts, requires this court to decline the jur-
isdiction motion until matters here in issue
shall have been adjudicated by another tri-
bunal.
All bills that were filed in various jurisdie-
tons in which property OF the Northern Pacific
Railroad Company is situated were original
bills. 1t is true that each bill filed after the
initiation proceedings in the Eastern District
of Wisconsin recited and referred to those pro-
ceedings as the basis OF action in other courts,
and 1t is also true that other courts in follow
ing the rule OF comfy appointed in their own
districts without question the receivers so
named by the first court. Actual possession of
the property OF an insolvent corporation by
the first court, through its receivers, however,
could extend no further than the territorial
limits of that courts jurisdiction. The rights
OF receivers as accorded in courts whose juris-
oiction is exterior to that of the initial pro-
ceeding have their basis in comfy. Such COM
ity rests upon the fact that another court Is in
actual possession of portion of the property
which cannot well be segregated, and which
the best interests of all concerned require to be
managed as single system.
Here, however, it is shown that at the time
of filing this application to remove the re-
ceivers there is no part of the railroad line OF
the Northern Pacific Railroad Company within
the jurisdiction of the court that first ap-
pointed them, and that there is in that district
no personal property held in receivership. All
property that remains to be disposed of is in
other jurisdictions. 1t follows from this state
of facts that the court is powerless to make an
order which affects in any way the manage
ment or the possession of any property of the
corporation.
No foreclosure sale of said mortgages can be
had, no possession to purchasers can be given
until the courts which have actual possession
of said railroad shall consent thereto. The
rule of comfy which has been invoked by the
opposition to the motion does not apply to
such case as this. 1t is predicated upon the
fact that another court has first taken and re-
tanned possession of the property. It's reason
consists in the fact that the court of initiatory
proceeding has in its possession and must
necessarily minister portion of the property,
which wise policy declares must not be disn-
tegrated. That reason does not exist in this
case. Many considerations lead US to believe
that wiser, more satisfactory management of
the railroad may be obtained by the court
which has jurisdiction over at least some terri
tory wherein the same is situated or in which
the home Office is located.
In a well-considered case in the Supreme
Court of Texas (Texas and Pacific Railway
Company vs. Gay ct al.) it was held that the
United States Circuit Court of the District of
Louisiana had no jurisdiction to appoint re-
ceiver and through him to take possession and
control the railroad, no part of which
was within that State. Said the court:
'No case can arise in which the court will
have power to appoint receiver unless there
be property OF which the court may take pos
session through its receiver; and If the prop
erty be immovable Tor movable, but so con-
nected with immovable as cars or other like
property necessary to and used in operating
the railway, then the suit in which the re-
ceiver to take possession of them may be ap-
pointed is necessarily one local in character,
for in such case the court operates directly
upon things. Such proceeding is not one
strictly in rem, but such Is its nature, and un-
der genela al rules everywhere recognized, such
proceedings can be had only where the thing
to be taken in possession is within the territory
within which the court has power to act"
The fact that certificates OF stock in other
corporations which were held by the Northern
Pacific Railroad Company have, since the
receivership, been transferred to the receivers
and stand in their names, has no bearing upon
the question under consideration. The status
such transfer. Shares of stock held by the
Northern Pacific Railroad Company must be
presumed to have been held by it at its home
office in New York. If those shares have been
transferred to receivers such transfer has been
made at the home Office, and must have been
made under the authority of the Circuit Court
for that district; and If they are held by the
receivers they are held under the direction
and control of that court and they are not in
possession or under the custody of the court
for the Eastern District of Wisconsin.
1t is strongly urged against the assumption
of jurisdiction by this court to entertain the
motion that during the receivership of these
receivers, certificates have been issued to
large amount, and that the same are now held
by innocent purchasers, and that to deny the
primary jurisdiction of the court for the East
ern District of Wisconsin over the receivership
is to hold that these certificates were unlaw-
fully issued. We find no ground for such con.
tention. If the receivers certificates have
been authorized by courts of the various dis
tricts in which the property in recelvership is
situated, they are valid liens upon tn at prop
erty, irrespective of the question whether the
court for the Eastern District of Wisconsin had
the jurisdiction to order their issuance If
they have not been so authorized 1t is not per-
ceived how the action of this court can in any
way affect the question of their validity.
It is further contended that If the Circuit