Source: https://www.legalcrystal.com/case/97225/palmer-vs-webster-atlas-bank
Timestamp: 2018-05-26 20:08:59
Document Index: 333501904

Matched Legal Cases: ['§ 77', '§ 77', '§ 65', '§ 77', '§ 77', '§ 77', '§ 65', '§ 2']

Palmer Vs Webster and Atlas Bank - Citation 97225 - Court Judgment | LegalCrystal
Palmer Vs. Webster and Atlas Bank - Court Judgment
LegalCrystal Citation legalcrystal.com/97225
Case Number 312 U.S. 156
Respondent Webster and Atlas Bank
.....england line. during the period involved in this case, there was no use of the terminal by the new haven trustees on behalf of the new england line. [ footnote 8 ] page 312 u. s. 160 in 1931, the department of public utilities of massachusetts determined that the proportion of use of the union station and facilities was seventy percent by new haven and thirty percent by new york central. no reapportionment has since been made. new haven filed its petition for reorganization in the district court for connecticut october 23, 1935. at that time, the lines of old colony and boston and providence came into the custody of the court as a part of the new haven system. the court directed continued operation of the system, and appointed trustees. old colony filed its petition.....
Palmer v. Webster & Atlas Bank - 312 U.S. 156 (1941)
U.S. Supreme Court Palmer v. Webster & Atlas Bank, 312 U.S. 156 (1941)
1. Trustees of a railroad in reorganization proceedings under § 77 of the Bankruptcy Act, who, after rejection of leases of other lines, continue pursuant to § 77(c)(6) to operate them "for the account of the lessor," are not required by the Act of June 18, 1934, by § 65 of the Judicial Code, or by § 77(c)(6), to advance funds, without security, out of the estate of the railroad for the payment of obligations to creditors of the former lessors, which payment is not essential to continued operation of the lines. P. 312 U. S. 162 .
are necessary to continued operation are all questions to be decided by the District Court having jurisdiction of the reorganization proceedings. Upon the facts of this case, the District Court exercised a sound discretion in ordering the trustees to withhold further cash payments in respect of obligations of the former lessors. P. 312 U. S. 167 .
3. The question whether, under a statute of the State, the railroad is directly liable in respect of the obligations in question is not presented by the record, and is not decided. P. 312 U. S. 168 .
In proceedings for the reorganization of the New York, New Haven, and Hartford Railroad under § 77 of the Bankruptcy Act, [ Footnote 1 ] the District Court, in response to a petition of the trustees, ordered them to withhold payment of taxes assessed upon the property of Boston Terminal Company and franchise taxes and bond interest owed by the same company. [ Footnote 2 ] The Circuit Court of Appeals reversed on the ground that statutes of the
United States compelled payment by the trustees. [ Footnote 3 ] The importance of the questions involved, and a conflict of decision, [ Footnote 4 ] moved us to grant certiorari. 311 U.S. 624.
In 1896, Massachusetts, by a special act, incorporated the Boston Terminal Company, [ Footnote 5 ] with power to construct and maintain a union passenger station in the southerly part of Boston, and to provide and operate terminal facilities "for the several railroad companies" by the act "authorized to hold the stock" of the company. The Act sets the capital stock at $500,000, and provides that Boston and Albany, New England, Boston and Providence, Old Colony, "and the New York, New Haven and Hartford Railroad Company, being lessee of the Old Colony Railroad Company, may each subscribe for and hold" one-fifth thereof.
In 1905, New England was merged into New Haven. [ Footnote 6 ] Later, Boston and Albany leased its property to the New York Central. Thereafter, in 1921, the Massachusetts Act of June 9, 1896, was amended [ Footnote 7 ] to give the New York Central, as lessee, the right to hold stock of the terminal company and, during the term of the lease, to exercise all the powers by the Act conferred on Boston and Albany. The total use of the terminal thereafter was by New York Central, as lessee of Boston and Albany, by New Haven, as lessee of Old Colony, and by New Haven, as owner of the New England line. During the period involved in this case, there was no use of the terminal by the New Haven trustees on behalf of the New England line. [ Footnote 8 ]
New Haven filed its petition for reorganization in the District Court for Connecticut October 23, 1935. At that time, the lines of Old Colony and Boston and Providence came into the custody of the court as a part of the New Haven system. The court directed continued operation of the system, and appointed trustees. Old Colony filed its petition for reorganization in the New Haven proceeding June 3, 1936, and the court appointed the same persons trustees as had been appointed upon the New Haven petition. Boston and Providence initiated a reorganization proceeding in the District Court for Massachusetts August 5, 1938, and trustees of its property were appointed by that court. The New Haven trustees disaffirmed and rejected the Old Colony lease June 2, 1936, and the trustees of Old Colony rejected the Boston and Providence lease July 19, 1938. Under orders of the District Court for Connecticut, made pursuant to the provisions of § 77(c)(6), the New Haven trustees have continued to operate both Old Colony and Boston and Providence railroads for the account of the former lessors. [ Footnote 9 ] The trustees have kept their accounts covering the operations of the two lines according to a segregation and allocation of expenses and revenues approved by the Interstate Commerce Commission and by the District Court and confirmed by the Circuit Court of Appeals. [ Footnote 10 ] In the accounting, the seventy percent of the use of
It held that the Act of June 18, 1934, [ Footnote 11 ] which provides that
The legislative history of the Act discloses its purpose. The committee reports accompanying the bill which became the Act of 1934 state: [ Footnote 12 ]
The Court of Appeals was of opinion that an obligation is imposed upon the New Haven trustees to pay the bond interest of the terminal company by § 65 of the Judicial Code, [ Footnote 13 ] which provides:
Section 65 is not a new enactment. It has its origin in § 2 of the Act of March 3, 1887, [ Footnote 14 ] and it has frequently been interpreted and applied by the courts. [ Footnote 15 ] Its obvious purpose was to negative the idea that a federal receiver or trustee could ignore the rules of law of the state of operation affecting the conduct of the business committed to his charge. In this sense, it has been interpreted and applied and, in this sense, it is certainly binding upon the trustees of New Haven so long as they operate the property of the former lessors. The application of the Act by the court below goes much farther
See Philadelphia Co. v. Dipple, post, p. 312 U. S. 168 .
See Palmer v. Palmer, 104 F.2d 161; Palmer v. Warren, 108 F.2d 164, aff'd, 310 U. S. Palmer, 310 U. S. 132 .
See e.g., United States v. Harris, 177 U. S. 305 ; Erb v. Morasch, 177 U. S. 584 ; Gillis v. California, 293 U. S. 62 ; Hornsby v. Eddy, 56 F. 461; Peirce v. Van Dusen, 78 F. 693.