New-York tribune., 1907-11-30
STATE RECEIVERS NOW
LOCAL. TRACTION SN4RL.
Justice Seabury Names Three for
City RaiISoay and u. S. r.

Justice Seabury IL the Supreme Court ap-
pointed yesterday Paul Fuller J. Hampden
Dougherty and Melvin @. Pallser receivers for
t1e New York City Railway Company in an
action by Attorney General jackson to dissolve
that company and declare forfeited all its cor
]'orate rights. These same men were appointed
receivers for the Metropolitan Street Railway
Company in companion action to GUST the
directorate Of that road and compel its members
10 render an accounting for their acts since 1896.
Since Adrian H Joline and Douglas Robinson.
appointed receivers by Judge Lacombe in the
UEted States Circuit Court, already hold pos
session Of the books and properties of both COM
panies Justice Seabury by his action has pre-
'ipitated long struggle between state and
federal courts for jurisdiction over these COM
panies which viii probably go finally to the
United States Supreme Court.
There is little likelihood of a physical clash,
;le probability OF which short time ago caused
Judge Lacombe TO instruct United States Mar
shaI Henkel and his deputies TO take charge Of
The properties under - fed ral receivers and
Yield them 10 no one Jus--ce Seabury in his
decision expressly directed his receivers 10 pre-
sent the question OF jurisdiction in an orderly
fashion to the United States court and in the
mean time not TO molest interfere with the
federal receivers in any way other than by
due process of law.
Little likelihood exists. also. that the federal
receivers will relinquish their task unless or
dered TO do so by the court of last resort
Adrian H. Joline listened 10 a synopsis of Jus
tice Seabury's decision with interest, and then
remarked in most matter OF fact fashion:
Well, don't care especially This is a mat
Ter Of entire Indifference to US. Well continue
our work the companies affairs as Judge
Lacombe directed TO do when we were ap-
pointed. and I don't expect we'll be disturbed.
If there is any interference with our duties. the
affair will have TO go to the courts. But, then.
! don't look forward TO any conflict or clash of
authority. The courts will settle it."
NO PHYSICAL CLASH FEARED.
Judge Lacornbe last night said that he was
certain the case would not result in any at
tempt TO take physical possession of the rail-
road properties by the state receivers
The Attorney General has said that there
would be physical conflict" said he This
situation viii come before the courts in due
course, and be carried UP until a final decision
IS reached"
The state receivers. who must qualify in
100000 in each case, held a conference last
evening with the Attorney General, and agreed
partially on their course of action. This will be
decided at a further conference to-day, and
without much doubt the preliminary steps will
he taken to carry out Justice Seabury's instruc-
tions. Already they have engaged Herbert r.
Lirnburg counsel. Mr.. Limburg is Hearst
man and an Independence Lacquer, as are Mr.
Palliser, and the Attorney General.
Attorney General Jackson. in his action
against the New York City Railway Company
asked that its corporate existence be ended as it
had been insolvent for at least year. AS to
the Metropolitan, Justice Seabury's decision de-
clared that proof before him established beyond
question the fact that not onlt had the COM
pany been insolvent for one year. but for sew
eral years. Taking up the Attorney Generals
charges that the New York City Railway re-
ceivership was brought about by collusive ac-
ton Justice Seabury tartly terms the action
suspicious.
While the unity of action and purpose" he
SAYS which seems to have actuated the plain
tiff and defendant in that suit, together with the
Extraordinary, if not unseenlly, haste which
characterized the action taken cause much sus-
picion TO arise in every unprejudiced mind, 1t
must be remembered that suspicion, no matter
how well founded 1t may be, does not rise 10 the
dignity of legal proof, upon which alone courts
may base the judgments or DEGREES which they
render in judicial proceedings"
PURPOSES OF TWO ACTIONS.
The purpose of the suit in the federal court
and the action in the state courts are, he goes
on. radically different, the suit in the federal
court being based on an assumption of the con-
tinued existence OF the corporation, and seeking
20 liuuidate its affairs only SO far as necessary
10 protect the interests of the pettioning credit
ors while the action in the state court Is prl-
nlarily to terminate the existence of the corpora
ton by forfeiting its charter
Justice Sea bury quotes opinion by Justice
Bradley IN which he held that where two courts
h.a concurrent jurisdiction over subject oI
conrrovergv the court which first assumed juris-
diction had it exclusive of the other; but where
the objects OF the suits were different TINS RUE
did not apply, although the thing about "hlcn
the litigation was brought was the same IN both
cases
After quoting decisions in the cases OF the
state against the Port Royal S Augusta Rail
way Company and the Louisville, New Albany
and Chicago Railroad Company i'll the Indiana
courts as furnishing precedents in line with
Justice Bradey's rule Judge Seabury goes or
10 say:
Courts will not indulge in considerations OF
comfy when 10 do SO would disoWn their owr
jurisdiction in reference 10 matter OF whlct
they have the exclusive right to act or wher
10 do so would work to the prejudice or injury
OF residents Of their own state. A corporator
can only cease TO exist by virtue OF surrender
forfeiture repeal Of its charter ana sucf
surrender can only be made to and such for
feiture or repeal effected by the state.
Neither the federal court nor any other power
than that Of the sovereign to which the cor
poration owes its life and franchises can cause
4 forfeiture of these privileges There Is M
principle more firmly fixed in English and Amer
ican Jurisprudence than that the state whicl
gave can alone take away the life and privilege
OF a corporation.
JUSTICE or REGULATION.
corporation owning and operating publ,
franchises owes primarily duty TO the stat'
which created 1t. Such being the case, they ar
subject, as has been repeatedly held, to govern
mental regulation and supervision. But tn,
effective exercise OF the power of regulation an
supervision depends upon the continuance o