Opinion ID: 302501
Heading Depth: 1
Heading Rank: 5

Heading: Retention of Jurisdiction and In Personam Jurisdiction

Text: 37 Appellees would have us hold that the Connecticut district court, in its order transferring the New Haven's assets to Penn Central and ordering inclusion, retained jurisdiction to act on any question respecting claims between the two railroads. However the order cannot be properly interpreted as either encompassing this type of equitable action or, indeed, any action based on events occurring subsequent to the transfer order. See Towers Hotel Corp. v. Lafayette Nat'l Bank, 148 F.2d 145 (2d Cir. 1945). 38 Even assuming that the reservation of jurisdiction could be construed as encompassing the type of action involved here, once the property came within the exclusive jurisdiction of the Pennsylvania reorganization court by virtue of that court's approval of Penn Central's petition for reorganization, the policy of Sec. 77(a) would prevent acceptance of appellees' contention. Due consideration of the congressional purpose in granting exclusive jurisdiction over the debtor's property to the reorganization court, would preclude permitting another district court to exercise jurisdiction on the ground that such jurisdiction was reserved in a related proceeding when the effect of the exercise of retained jurisdiction would be to hinder the ability of the reorganization court to administer the property of the railroad pending reorganization. Thus, even if the Connecticut reorganization court's order were construed to include the reservation of jurisdiction to declare an equitable lien and a constructive trust, the subsequent approval of Penn Central's petition by the Pennsylvania reorganization court served to oust the Connecticut court's jurisdiction and to vest exclusive jurisdiction in the Pennsylvania court. 39 Appellees' final contention, that the Connecticut reorganization court had jurisdiction to declare the lien and constructive because it had in personam jurisdiction over the Penn Central trustees, is without merit. Even if the Connecticut court had in personam jurisdiction, it lacked subject matter jurisdiction; the Pennsylvania reorganization court had exclusive jurisdiction over the subject matter-the former property of New Haven-and only that court was competent to take action with respect to that property.