Source: http://openjurist.org/289/us/479/johnson-v-manhattan-ry-co-boehm
Timestamp: 2015-09-01 10:23:55
Document Index: 683260773

Matched Legal Cases: ['§ 22', '§ 22', '§ 22', '§ 22', '§ 27', '§ 27']

289 US 479 Johnson v. Manhattan Ry Co Boehm | OpenJurist
289 U.S. 479 - Johnson v. Manhattan Ry Co Boehm Home
289 US 479 Johnson v. Manhattan Ry Co Boehm 289 U.S. 479
53 S.Ct. 721
77 L.Ed. 1331
JOHNSONv.MANHATTAN RY. CO. et al. BOEHM v. SAME.
Nos. 711 and 721.
Argued and Submitted April 18, 19, 1933.
Mr. Charles Franklin, of New York City (Messrs. Alfred C. B. McNevin, Herbert Goldmark, and Leonard H. Goldenson, all of New York City, on the brief), for petitioner Johnson.
Mr. Louis Boehm, of New York City (Messrs. Harry Shulman, of New Haven, Conn., and Samuel Zeiger, Harry M. Edelstein, and Elliot S. Benedict, all of New York City, on the brief), for petitioner Boehm.
Messrs. Charles H. Tuttle and Paris S. Russell, both of New York City (Messrs. Breed, Abbott & Morgan and W. K. Petigrue, all of New York City, on the brief), for respondent American Brake & Shoe Foundry Co.
These cases exhibit an acute controversy between the Senior Circuit Judge of the Second Circuit and the District Judges of the Southern District of New York respecting the authority of a judge specially assigned to that district—particularly the Senior Circuit Judge when so assigned—to entertain an application for the appointment of receivers in a suit in equity.
In 1930, the Senior Circuit Judge, acting under 28 U.S.C. § 22 (28 USCA § 22), and reciting that the public interest required it, assigned himself to hold at any time a session or sessions of the District Court for that district, for the purpose of trying causes and entertaining and disposing of any matter which might come before him.
In June, 1932, at the suggestion of counsel in an intended suit in equity for the appointment of receivers for the Fox Theatres Corporation, the Senior Circuit Judge sought informally to persuade one or more of the District Judges that a trust company ought not to be selected as receiver, but failed to secure an acceptance of his view. Thereupon, acting under his assignment of 1930, he entertained the application for a receiver and appointed individual receivers.
August 25, 1932, counsel representing the parties in an intended suit in equity by the American Brake Shoe & Foundry Company, against the Interborough Rapid Transit Company, informed the Senior Circuit Judge that an application for the appointment of receivers would be made in that suit, and laid before him an affidavit, entitled therein, alleging generally that a trust company or other corporation would not be a suitable receiver, and particularly that the defendant company's complicated and involved daily operations, its enormous staff of operating officials and employees, its contracts and relations with the city of New York, and the use of its facilities by the public, required that the receiver or receivers be a competent individual or individuals who could give constant and undivided attention to the matter. Thereupon the Senior Circuit Judge, conceiving that a District Judge might select a corporate receiver and that this would be unwise and should be prevented,1 concluded to assign, and did assign, himself to hold a District Court for the Southern District, 'particularly to hear and determine all applications and proceedings' in the intended suit for a period beginning that day and continuing until the suit came to an end. This assignment, like that of 1930, recited that it was made under 28 U.S.C. § 22 (28 USCA § 22), and that the public interest required it.
Sec. 22. 'The Chief Justice of the United States, or the circuit justice of any judicial circuit, or the senior circuit judge thereof, may, if the public interest requires, designate and assign any circuit judge of a judicial circuit to hold a district court within such circuit. * * *
'During the period of service of any judge designated and assigned under this chapter, he shall have all the powers, and rights, and perform all the duties, of a judge of the district, * * * to which he has been assigned (excepting the power of appointment to a statutory position or of permanent designation of newspaper or depository of funds).'
Immediately after making the assignment last mentioned, the Senior Circuit Judge turned to 28 U.S.C. § 27 (28 USCA § 27), which declares:
'In districts having more than one district judge, the judges may agree upon the division of business and assignment of cases for trial in said district; but in case they do not so agree, the senior circuit judge of the circuit in which the district lies, shall make all necessary orders for the division of business and the assignment of cases for trial in said district.'
That order was filed and entered in the District Court, and on August 26 the American Brake Shoe & Foundry Company filed therein its bill of complaint against the Interborough Rapid Transit Company, together with the affidavit before mentioned. The bill disclosed that the plaintiff was a simple contract creditor, suing on its own behalf and on behalf of all other creditors who might choose to join in the suit, and that the defendant was engaged as a public carrier in operating an extensive system of transportation within the city of New York and its environs; set forth with much detail that the defendant was in greatly embarrassed financial condition, had made default in the payment of taxes and other claims, and could not avoid making default in the payment of installments of interest and principal about to fall due upon bonds and other obligations secured by mortgages; alleged that its properties were in danger of being dismembered and largely wasted through competitive efforts by its many creditors to obtain satisfaction of their claims, that such wasteful strike would seriously impair and interfere with the discharge of its duties as a public carrier, that its properties could be preserved for equitable distribution among those entitled thereto only through the intervention of a court of equity, and that such intervention would make for a realization for all of the creditors of a substantially larger amount than if that relief were not granted. The prayer was that receivers be appointed to take charge of and preserve the defendant's properties, continue the operation of its railroad system for the accommodation of the public, and collect and properly appropriate the income until the final decree, and that the court marshal and administer the assets and by its decree ascertain and enforce the rights, liens, and equities of the several creditors.
Immediately after the bill was filed the defendant appeared and, conformably to a resolution of its board of directors, answered the bill, admitted the allegations therein, joined in the plaintiff's prayer and consented to the appointment of receivers.
Later in the same day, August 26, the parties appeared before the Senior Circuit Judge, sitting under the assignment and order of the day before; and, after examining the bill, affidavit and answer, the judge made an interlocutory order appointing temporary receivers and granting the usual temporary injunction against the institution of suits against the defendant company, except on leave granted in that suit. The order also directed (1) that on September 22, the parties show cause before him, as such assigned Circuit Judge, why the receivership should not be continued during the pendency of the suit, and (2) that at that hearing 'any other creditor of the defendant or other party in interest may be heard.'
September 6, the Manhattan Railway Company petitioned for leave to intervene as a efendant in the Interborough receivership suit and set forth in the petition many facts showing the Manhattan'