The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-06-05
Federal Receivers to Control
Outside of State.
JUDGE MARSHALL'S DECISION
COntending Sets of Receivers
Are Both Retained.
State Receivers in Majority on
Joint Receivership.

receivers appointed by Judge I. j.
FlannelIy of Independence, Kan. are
to have charge of that portion of the
Kansas Natural Gas company prop
critics within the state of Kansas, and
the federal receivers appointed by
Judge John C. Pollock will have juris-
diction of the company's properties
outside of Kansas, according to de-
cision rendered in the federal district
court in Kansas City, Kan. today by
Judge Marshall of Utah.
AS result of Judge MarshalIs de-
cision the affairs of the kansas Nat
uraI Gas company which Tor more
than a year have been in tangle, ana
which since last october have been in
the hands of three receivers, appoint
ed bv the federal court, will be under
the Joint control of two sets of re-
ceivers, four appointed by Clrcult
Judge FIanne11y and the three named
by Judge Pollock. In making his ruI-
ing Judge Marshall. who was called
in TO decide the case by Judge Pollock,
said:
Judge Expresses Regret.
'I regret very much having to make
this decision. I appreciate the d1tn-
Guilty attendant to placing the COM
pany's affairs in the hands of separate
groups of receivers, yet upder the law
there is no other course for me. The
federal and state receivers must work
together for the good of the company
and the consumer. That is the only
recourse"
Judge Marshall was called in to de-
eide the case by Federal Judge Pollock
who appointed the federal receivers
and who was asked to decide the Jur-
iSdiction question after the claim for
management of the gas company's af-
fairs was made for the state receivers
by Judge FlanneIly of Independence.
The state asked that the federal re-
ceivers be discharged on the ground
that action which resulted in the ap-
pointment of the state receivers was
instituted prior to the federal court
action.
The question as to which of the re-
ceivers, the state or the federal, should
have jurisdiction over the Kansas
Natural company's affairs was put di-
rectly up to the federal court Febru-
ary 1S last when a petition asking the
discharge of the federal receivers was
filed in the federal district court in
Kansas City, Kan, by John H. Atwood.
attorney, acting for Attorney General
Dawson of Kansas, and the two re-
ceivers appointed in the state court at
independence. The petition also asked
that the gas company's affairs be
placed in the hands of the. state re-
ceivers.
History of Case
The federal receivers, Eugene F.
Mackey, Conway Homes and George
Sharitt, were appointed by Federal
Judge Pollock, October 9, 1912, upon
petition of attorneys for the gas COM
pany.
With view to rehabiIitating the
company, receivers put experts to
work investigating the condition of
the gas supply and distribution. De-
cember 80. 1912, based upon the re
port of the receivers, a decree of
T-1do Do abr
price of gas delivered to distributing
companies in dozens of towns in both
Missouri and Kansas. While litiga-
tion concerning these increases were
under way Judge ]. T. Flannelly of the
district court of Independence. on Feb |
ruary Is, appointed new receivers for
the Kansas Natural. Incident to his
action Judge Flannelly declared the /
Kansas Natural and the Independence
Gas company and the Consolidated
Oil. Gas and Manufacturing company,
two subsidiaries. formed an illegal
"trust." The action was the result of
quo warranto proceedings brought by
the Kansas attorney general a year
previous or long before the federal re
ceiverS were appointed. Judge Flan-
nelly's decision asserted precedence
over the federal court action and in
structed the state receivers to go be
fore Judge Pollock and demand a
judgment of property.
It recited that the acts of the Kan
sas Natural and the two subsidiaries
were inimical to public interests in the
point of raising the price of oil or
gas, and that they should forfeit their
corporate existence. He ordered that
the price of gas be not increased
The receivers named by Judge Flan-
nelly We're John Landon and r. S.
Litchfield for the Kansas Natural and
A w. Shultis and George P. Guern-
Sey for the subsidiary com panies
Judge F1annelly also issued an injunc-
ton restraining any producing or dis
tributing company allied with the
Kansas Natural from increasing the
price of gas or shutting off the supply
to consumers He said it was apparent
that the appeal for the right to raise
the prices in order to conserve the gas
was "a mockery," and that the com
pany would sell its last foot of gas
without scruple.
Judge MarshalI's decision allows the
attorneys for the receivers 20 days
within which to appeal the case, and |
in the meantime, pending a decision |
of the federal court of appeals the af- /
fairs of the Kansas Natural are to |
under the auspices of the fed |
eral receivers. Judge Marshall placed /
the federal receivers under $4,000
bond pending the result of appeal.
Attorney General Dawson and At |
torneys John H. Atwood and Chester !
L Long, representing the state receiv- |
ers, asked that the affairs of the gas
company be placed under their juris- |
diction pending appeal.
When this was denied by the court |
Atwood asked that the fed |
eral receivers be required to furnish 4
appeal bond in the sum of $1.000,000; |
this also was denied by Judge Mar !
Despite the reverses. attorneys for |
the state receiYerS said .Iudga Mar