*1 One to Count foregoing evidence way in no involved with evi- evidence on the other counts. amply
dence sufficient sustain guilty
verdict of on Count One. au statute court was
Under the impose count
thorized to sentence on each year’s imprisonment
of not than one more $5,000, exceed both.
or a fine of Therefore, U.S.C.A.Appendix, 925(b). all four counts which
the sentence on very imposed in this case was impose
much less than was authorized Thus, count. defendant one even if were prejudiced, there
errors committed to the remain of law
ing counts. sufficiency sup evidence to
port necessity obviates One Count examining
our the other counts to deter sufficiency.
mine al. v. their Abrams et States, 250 U.S.
United
17, 63 1173. find record examined We error, judgment of prejudicial affirmed. Court is District al. et v. CALLAWAY et al.
BENTON 12130.
No. Appeals, Court of
Circuit Fifth. Circuit.
Jan. 1948. 15, 1948. March Granted of Certiorari
Writ
See
HUTCHESON, Judge, Circuit dissent- ing. Hall, Ellsworth Jr., Bloch and
Charles J.
Macon, Ga.,
appellants.
both of
Ga.,
Cunningham,
Savannah,
M.
T.
Harris,
and Walter A.
and Wallace Miller
Macon, Ga.,
appellees.
both
PIUTCHESON, HOLMES, and
Before
LEE,
Judges.
Circuit
HOLMES,
Judge.
Circuit
appeal
from a
below,
entered
exercise of its
permanent-
bankruptcy jurisdiction, which
appellants
ly enjoined
(individually
protective
a stockholders
members of
prosecuting a
filed
committee) suit
County,
South-Western
proposed
was that
Superior
Bibb
Court of
been trustee of
the debtor in
Georgia.
temporary injunction
offi-
submitted
him.
against the
issued
state court
said
*3
Western
cers and directors of the
Objections
by
the
South-
proposal
to
them,
restraining
with-
Company,
Railroad
the district
unavailing
Western were
in
stock-
the
out the unanimous consent of
by the
The
be issued
court.
bonds are to
any
holders,
written
of
from the execution
company,
will
whether that
debtor or
conveying
instrument
be
be
the debtor or a new
to
property
fee-simple title of the
trustee
by
reorganization
determined later
company. This
railroad
of said
managers. Upon
confirmation of
annulled,
proceedings
required
reorganized company
to
enjoined,
by
state court
debtor,
property
all
title
of
have
whether
presented here is
The
court.
issue
requirement is
construed
not to be
but this
stay
jurisdiction to
below had
the court
rejection
as prohibiting of
lease.
to annul
proceedings
state court and
in the
plan provides that, prior
con-
More
therein.
taken
previously
the action
summation,
acquire
debtor shall
the bank-
question is:
definitely,
properties of three railroads leased to the
proceed-
reorganization
court, in a
ruptcy
.
South-Western,
they
company, including
Act, 11
Bankr.
ing
Section
under
acquired
specified
terms
can be
C.A. §
provision may
disre-
be
South-
properties of
whether the
determine
garded as
one
of the leased roads if the
acquired by the
legally
could
Western
reorganized company
acquire
shall not
set
the terms
forth
Georgia,
of
Central
property
Company.
of the South-Western
of
by mere
vote
properties
If
not
these
shall
be ac-
an-
of South-Western?
quired
result of
upon whether
plan by
swer
turns
security holders,
leased-line
jurisdic-
court had
then
acquired
lease
line not so
not
or
conveyance
property
in rem
be disaffirmed. The method
ac-
by
state court.
quisition,
through purchase,
whether
mer-
which had
undisputed,
consolidation,
and are substan- ger,
are
or
facts
to be determined
trustee,
tially
managers
follows:
they begin
when
to function. The im-
Railway Com-
The Central
portance
acquiring
the debtor
South-
ain
pany is
debtor
that,
Western
indicated
if it
fact
the Bank-
Section 77
under
ceeding
so,
fails
acqui-
do
for the
Act,
ruptcy
as amended.
sition of the Chattahoochie &
Rail-
Gulf
below
in the court
the debtor
was filed
Company
road
disregarded.
pending therein. Prior
and is now
The South Western
Company
Railroad
1932),
debtor’s
(beginning
incorporated
ap-
the laws Geor-
operated
receiver
properties were
n
capital
par
equity
in the federal
stock is of
gia
suit
Its
in 1845.
pointed
many
$5,191,100,
suit
which is com-
years prior to the
For
value
court.
properties
free from
equity,
Railroad
Its
are
the South Western
mon stock.
by the debtor under
It owes no bond-
Company
operated
other liens.
mortgage
liabilities
1869. A
of re-
Its current
are
indebtedness.
lease dated
ed
June
equipment
promulgat-
$100,000. Its road and
debtor was
less than
organization
$12,830,257by
Commis-
the Inter-
Commerce
valued
were
Interstate
ed
$14,000,000of
Commission in
to issue
proposed
state Commerce
sion.
bonds,
$9,523,736.81by
due in
its board of directors in
first-mortgage
4%
comprise
some
due
Its
income-bonds
1947.
$16,000,000of 4}4>%
railroads, bridges, depots
ap-
proposed the allotment
South- miles of
purtenances,
portion
in the southern
$2,200,000
first-mortgage
railway system.
Georgia’s
$1,700,000
bonds if
of income
bonds
South-Western,
the Central
convey all of its
Without
operate its trains from
offered to
The allotment thus
could
Florida
the debtor.
west;
right
north
exclusive as to
through Macon to the
or title of a
operate
party
in bankruptcy
to property
the Central
vicinity legally
equitably
trains from coal fields
owned
or claimed
Emanating
Birmingham
Savannah.
debtor. Section
a provides
sub.
Macon,
during the pendency
lines
South-Western
system through Fort
form
of Central’s
court shall have “exclusive
through
Valley Columbus, Georgia;
debtor and his
Americus, Smithville,
Valley
Al-
Fort
By
wherever
c(2)
located.”
bany,
Georgia,
Eufaula, Alabama.
powers
title
assim-
South-
properties,
ordinary
addition to
those
ilated to
of trustees
bank-
*4
government
hands
in its
Western has
ruptcy
Meyer
Fleming,
proceedings.
n
value,
market
municipal
of the
securities
supra.
$1,124,581.25.
as of December
case,
In the instant
assumes
contemplate the trans-
not
The
does
that the fee of the leased lines will
ac
reorganized
securities to
fer of these
quired by
of the
company.
provides that,
accepted,
the lease of
in
bankruptcy
erred
court
We think
such line shall be disaffirmed. Not
jurisdic-
exclusive
exercise
attempting
only that,
but the
itself
Act
looks forward
property which the debtor
tion over
contingency
being reject
to the
of a lease
The
upon which it had no lien.
own and
operate
ed and
the lessor being
unable
the tan-
possession
in
debtor
actual
was
event,
provides
In
Act
line.
by
gible property leased
but it held
duty of
that it shall be the
the lessee to
in
lessee,
The
not as owner
fee.
same as
operation
continue
of the
line
account
always supposes
granting of
lease
lessor until
abandonment
himself a
reserves to
reversion
grantor
by
such line be authorized
Commiss
premises.
estate
the leased
A leasehold
in
danger
public
ion.2 There is no
of the
personal property
which becomes sub-
adversely
by
being
rejec
interest
affected
ject
jurisdiction
to the
exclusive
inability
tion of the lease
bankruptcy
pe-
filing of a
court
operate
lessor to
the railroad.
77;
by
Section
tition
the debtor under said
court,
The
in
suit
the state
which was
fee,
but
title in
the lessor’s
out of which
below,
judgment
awas
carved,
leasehold was
was
an asset
personam,
parties
between
debtor,
claim
and no
of title there-
reorganization,
property
over
lien
to or
thereon made
the debtor
might
acquired by
never be
or its trustee.
company.
recognized
Commission
The
fact,
expressly provided
nothing
jurisdiction
federal
grant
should
be construed as a
bankruptcy
district
limit
sitting
courts
authority
express
for the transfer of the
debtor’s
conferred
statute
matters
ed to
action of
jurisdiction
para property
the Com-
ly
impliedly. Such
until
contemplated
that the
exclusive in the administration
mission.
mount
acquired upon the
bankrupt’s
lines should be
estate.
basis
question
rem
sub-
is its
stated
exclusive
terms
court’s
possession
court for decision was
of the mitted
constructive
actual or
fee
South-Western’s
property.1
limited to the whether or not the
debtor’s
lease,
property
belonged
properties,
administration
question,
conveyed by
owner
a vote
legally
extends
the debtor
simple majority
determination of
of title
stockholders.
of a
affecting
peculiarly
It is
was
of state
debtor’s
law.
liens
estate.
Beeler,
595;
L.Ed.
In re Retail
Stores
Schumacher
433;
Corporation, D.C.,
F.Supp.
Delivery
Continental
L.Ed.
55 S.Ct.
Co.,
892;
Inc., D.C.,
Bank &
&
Nat.
Trust Co.
re Straus
Illinois
v. Chi
Ry.
F.Supp.
cago,
& Pac.
11 and 46.
§§
Rock Island
U.S.C.A.
e(6).
11 U.S.C.A.
Fleming,
Meyer v.
reorgan
controversy over
the district court
It was not a
bankrupt
ization
possession
is that
constructive
actual or
cy
possessed.3
courts
customarily
trustee.
case,
entering
annul
in this
had
court below
Whatever control
ling and staying proceedings in the state
was not
over South-Western’s assets
court,
in a
undertook
proper-
reason of the fact that its
summary proceeding
exercise exclusive
court, but
custody
ties
were
in rem as to
that the
simply
the leasehold
was
because
estate
seeking
own
to ac
did not
but was
specifically
property of
debtor.
quire. The proceeding in the state court
pointed
Commerce
the Interstate
enjoined,
that was
petitions
reorgan-
annulled,
strictly
personam.
were
Un-
ization
the lessors
been filed.
had
appear
It does not
from this record that the
doubtedly the Commission intended
any jurisdiction
what
get
reorganized company
good
controversy; but, conceding
ever of that
ques-
property in
marketable title
did,
concurrent,
such
tion.
*5
exclusive,
not have been
ex
acquired,
If the
shall
leased lines
summary proceeding.4
ercised in a
plan provides
railroads
each
envisaged merger
The Commission
or
three,
and all the real
owned
estate
purchase
consolidation
as well
as
lessor,
conveyed
each
must be
to the reor-
lines, but
the activities
the trustee
ganized company; each of said
must
lessors
so far as this record shows have been di-
any damage to which it has become
waive
principally
acquisition
rected
to the
of South
entitled;
or shall
and the South
become
properties by purchase.
Western’s
Company
Railroad
waive
prop-
lessor has been made an offer
respect
equipment.
claims in
to
Such con-
terms,
erty upon specific
which must ac-
veyances
will
con-
waivers
be the sole
offer,
reject.
rejects
cept or
If
delivery
sideration
of the re-
each
nothing
There
lease will be disaffirmed.
spective
proposed
lessors of the securities
indicate that an ultra vires
in the
specified
to be allocated to it
thereafter
as
required,
is authorized
plan.
There much that
needs
prohibits accept-
any state law which
that
carrying
be done
the Commission’s
disregarded. The
does
ance should be
reorganization,
and the sooner an
provide
leased lines
be ac-
decision
court is
authoritative
quired
simple majority
vote of the
suit,
obtained
the nearer the
above
company.
parties may be to the consummation of that
the debtor’s
has ac
Because
possession under its lease of certain
tual
The modernization of American
tangible property of
South Western
bankruptcy law the enactment of Section
Company, the trustee claims to be
Railroad
Act,
legislation,
77 of
and kindred
possession
in con
of all
alter, lessen,
or abolish the
dis
several
troversy.
con
We do not concur in this
jurisdiction
exercised
tinct classes
seeking (not
The debtor is
to en
bankruptcy
in tention.
Such
court.
upon tangible property as in
force a lien
personam,
in rem or in
civil cases is either
Palmer,
132,
310
60
U.S.
S.Ct.
concurrent,
v.
ple Warren
summary
exclusive or
acquire
1118, but)
865,
the in
84 L.Ed.
adjudicate
nary.
as to bank
reversionary
lessor,
corporeal
interest of its
ruptcy,
grant
discharges,
or refuse
ad
by operation of law when the
bankrupt,
which arose
minister assets of the
and to
fee-simple
was carved out of the
estates,
leasehold
exclusive. The exclusive
close
ner
S.Ct. 364.
Kline v.
Meyer
New
v.
Burke
Jersey,
Fleming,
Construction
327 U.S.
cited in Gard
49 S.Ct.
A.L.R.
Co.
Canterbury,
v.
B. &
L.Ed. 605.
A.
Central
L.Ed.
R.
Co.,
New
279 U.S.
England
Mandeville
R.
holding
title. This
interest
is a vested future
bankruptcy
lease.
possession
commence in
after
the deter
in rem
reversion,
mination
is not
the lease. The
lessee
but
leasehold.
disputing
title,
seeking
suppose
lessor’s
From
angle,
another
let us
acquire it,
claiming
bank
and is
both Central
were in-
South-Western
ruptcy
administering
intangible
court is
solvent,
each
the debtor in
fallacy
argument
asset. The
is this:
proceeding pending in dif-
res,
the case
a tangible
judicial
anyone
there can be ferent
Can
doubt
districts.
possession
contempla
in fact as well
one court would have
law;
something
but in
case
rem of
of the re-
the leasehold and another
intangible, possession
purely
legal
con
symmetry
the Bank-
version? Then
cept
only through
manifests
Act,
amended,
itself
rupcty
would come into
recognition
consequences.5
legal
judicial
So far
power would
view. The federal
pertinent here,
legal consequences
by vested
exercised
courts to
extent
possession
of a
tangible
of a
in them,
delegated power
debtor’s
asset
the time of
Congress
regulate
his
his
would be
commerce
trustee in bankruptcy
succeeds
the debt-
Com-
exercised
the Interstate Commerce
possession;
reorganiza-
and that
or’s
mission.
harmonious
tion,
thereby,
possession
court, acquiring
promulgated
of both
would be
roads
Commission, subject
ap-
adjudicate
jurisdiction in
summary
rem to
and an-
proval
court as
of one
respecting the
There
adverse claims
asset.
South-Western, with final
court as to
other
reasons, the law attaches
fore,
practical
Supreme Court.
intangible
ownership
property the
*6
possession
tangi
a
legal consequences of
of
which has
corporation,
A solvent
law
limits the
ble res. Thus in this case
and lessor
appeared specially
creditor
possession
to
of
lessee
the duration
of the
cannot
proceeding,
reorganization
in a
lease,
ownership
to
attaches
while it
compelled against
its will
constitutionally
legal consequences
in fee the
reversion
larger and better
convey
the debtor
reversion,
being
possession.
Such
not
lease. The
granted
was
than
title
petition
at
time
owned
its
provision
this,
made
knew
Commission
filed,
reorganization
legal
is in
con
was
Its use of
of the lease.
for disaffirmance
possession
templation
of the
not now
something
“acquired” implied that
the word
court; and,
bankruptcy
since the law at
estate. The
to the debtor’s
added
was
ownership
legal con
mere
to its
tributes
contemplate
the limited
plan
that
sequences
possession,
debtor
lines
interest of the
jurisdiction in rem of said re
has
court
no
fee-simple
title
into
be converted
versionary interest.
owners. Such
consent of the
bankrupt
It is well settled
an
blood transfusion
economic
summary
juris
cy
has
or
court
no
strained;
matter
with
is a
contract
it
tangible property
adverse
diction
rem
reorganization.
carrier that is not
party
fide
ly
under a bona
held
a third
appellants
ask that
ownership.6 The
here do not
true of
The
claim
same is
except
property,
ownership
Commission be set aside or
intangible
legal
approving
con
the order of the court below
latter carries
it
it
They
possession.
ask that full
sequences
the case of a be reversed.
effect be
reversion,
ownership
language
given
attributes
law
to the
Counsel
consequences
posses
stated
jurisdictional
stockholders’
illustrate,
you
suppose
let
“The
makes
offer to
meeting:
us
sion. To
here,
is all
gentlemen;
were the debtor
does.”
South-Western
attempt
the charter
corporation
to amend
solvent
did not
that Central were
Worrall,
Cir.,
Harrison, Trustee,
Chamberlin,
5 In re
F.2d
Marsters,
Cir.,
In re
F.2d
897.
865.
Const,
late
cl.
its
commerce.
art.
Company.7 In
South Western Railroad
concluding
This
sentence
opinion
below
accounts for the
court
approving
pro
paragraph
no fed
effect that
to the
“If
said:
do not
lessors
thereby,
are,
lines,
eral
created
posal
acquire
they
is deemed
their
any
disaffirmance,
prop
granted
but
therein
liberty to take their
modi
stockholders, carrier
be in addition
and in
erties back.”
letter to
corporate
powers
its
under
company quoted that
its
president
fication of
of the
opinion,
charter or
the laws
state.11
and said: “So
court’s
of the
the Com
approved
not authorize
it is
does
that under the terms
compel
corporation,
required
mission to
a railroad
to ac
South Western
pro
cept
purchase,
which not a
debtor
the Trustee’s offer
but
lease,
sale,
merger,
operate
may
ceedings,
to enter into
back
take
carrier,
consolidation,
require
authorizes the
petition
new or
but
or
the Court
stockholders,
required
operate
rail with the
assent of
company South Western’s
participate
for the account of
such transaction
risk and
roads at
provided by
approval
Bank
Neither
South Western
Commission.
ruptcy
does
authorize the
Act.”
compel
sell
a lessor not
brigaded
judicial process
debtor,
reorgan
to a
to the
process in reor
administrative
company.
application
ized
77,8
ganization
under Section
being litigated in
state
controversy now
bankruptcy courts and the Interstate
court between the stockholders of South
cooperatively,
Commerce Commissionwork
was
Western.
suit in
statutory
does
mean that the
illegal conveyance
intended to
powers
departments
blended
the two
of South-Western’s interest that
may
functions
so that either
exercise
subject
contingency
Such
lease.
Each exercises
own distinct
other.
contemplation
within the
approve
powers.
judicially
The court
promulgated.
when
legislative
affirm
action
executive
Commission,
only
but it is
latter
Every plan
*7
ap
power
5(11) to
under Section
full
railroad,
meaning
a
within the
Section
sale,
prove
merger, or consolidation of
a
adequate
77,
required
provide
is
means
majority
two railroads with
assent of
execution,
may
for
which
include “the
its
stockholders
different vote
unless
debtor”;
charter of
amendment
applicable
required under
law.9
state
is
but
no authorization
there is
Commission,
only
action
is
to amend the charter
a creditor or lessor
court,
subject
confirmation
that
in reorganization.12
debtor
company may carry
such
Upon
confirmation
which is
invoking any
effect
transaction into
debtor,
subject
judicial review, the
authority
approval under state
and without
any
organized for the
other
prohibitions.10
regard
state or federal
purpose
carrying out
shall
have
effect;
put
into
and shall
transcending
full
existing
In thus
state
con
Commission,
do so:
laws
legislation, it is the
not the
notwithstanding.13 Evidently
trary
there
court,
reorganization proceedings
real
substantial
conflict be
exercising
delegated legislative power must be
plan and
state law before
regu-
tween the
Constitution to
Congress under
York,
7 Compare
Warren v.
168 A.L.R.
Palmer. 310
In re New
New Haven
865,
138,
Co., Cir.,
84 L.
R.
ity, heavily majority opinion the error the rely pointing on of in giving acts, complete ab- graceless enormity, comfort to his -aid and obstructive which, judge error, margin power, excerpts sence state district of of the This as in the opinion3 show, attempting stay proceeds from the scope of proceedings, and possessed the nature view that and and enjoined filing reorganized anyone company District “from or to acceptance any properties i-ailroad, Court or the else the Commission” of and plan enjoined finally, provided “specifically they of the and that “be and, any doing performing they from behalf of pany and such "be, act directors and officers hereby enjoined Railroad Com- South Western restrained might doing any performing tend consummate which act in plan of of of control com- railroad behalf of defendant Georgia respect pany Railway might to the the tend to consummate acquisition properties plan Georgia of the Central Rail- Company respect South Western Railroad road Co.” ac- (IS) quisition having company prop- rule show issued hearings having cause had on been erties the South "Western Railroad”. March did State Court (17) Whereupon, the trustee amended enjoin meeting of the stockhold- petition injunction bring his acceptance ers or their Reorganization the attention of the Court reserved his decision matters adjudication present and to Reorganization argued. wheth- Court laws (14) On the stockholders March er, under the met cepted ac- two-thirds ease, circumstances of this consent of the unanimous day and on that same stockholders South South resolution ers mailed to the Western accordance with the precedent is a condition Western its directors and stockhold- company plan by acceptance ballot conveyance by the and its consummation accepting com- of its pany. (15) April 18, 1947, On no further ac- prayer or- was a There having tion taken the State Superior Court of Bibb Coun- Court der of the suit, trustee filed Re- his bill ty and that void and declared be annulled Court, calling organization to the atten- the court is confirmed when pendency na- passed tion of will make orders such asking suit and Benton ture and' South Western’s effective prosecution further consummation. with the interference May (18) case was On judge whereupon ceedings, the district right heard, Western of South down, tempo- issuing the matter set the properties agree sell its prayed. rary injunction as of its consent the unanimous judge April 24, 1947, (16) On declared, the in- Court, reciting that fed- the State junction was made issued theretofore injunction had issued an eral court temporary permanent. is- prosecution against judge State sued acting and, purporting suit, on his to be in excess null void declared junc- sweeping- motion, issued own invasion and an that Court’s against defendants State jurisdiction of the opinion that based on his Court suit Court. no charter ma- unanimous the statement Contrast railroad without sell its injunc- opinion, jority the- “Section of its stockholders. consent tion, alter, terms, stayed legislation, sweeping Act, kindred most carrying lessen, into several distinct effect or abolish the “from South Western by the exercised sale or for the lease classes * * * court. exclu- of the defendant the railroad any accept- pursuant company court in district sive reorganization proceedings sale or such ance pos- customarily courts a unanimous authorized lease this, entering judgment in *10 the defendant com- sessed. stockholders vote staying proceedings precisely case, annulling prayer following and pany”, the and court, petition, court the state in undertook Benton’s of summary proceeding filing ain with and directors officers the Court, in rem as exclusive or the exercise District United States Commission, any Interstate Commerce seeking acquire.” selling acceptance but was of own such
887
its
proceeding,
than
including
is no more and no less
exercised here
plait
controversies
and the
ordinary bank-
in an
and
be exercised
bring
instituted to
about.
of
ruptcy proceeding,
the res
and that
Reorganization Court
is said
As the
of the District
conclusions of law
possessed
Judge, excerpts
to have
and
I have set
from which
margin,4 show,
great
physical
of the debtor
in
he
with
merely
saw
of,
law,
majority opinion
being
clearness
not on-
as is the
res
what
instead
Plan are all
Mass.,
ceptance,
Commerce
ance to bo made
L.Ed.
Central,
of
powers
acceptance, and
ization
cy
preventing
plan expressly
and the administrative
rejection must be made in the
South Western
ization
Western
holders
dicial functions
R.
brigaded
ess of
stand,
cy
84
erties to
Western.
consolidation
rupt
South Western
Commission
organization.”
“We
4
(5)
(2)
(4)
(1)
(3)
Court
R.
done
L.Ed.
These are
Bankruptcy,
purposes
State
U.S.
the sale
merger or consolidation of South
proposal
proceeding,
exclusive
Warehouse & S. S.
South
“The
1123,
the effect
308
injunction
hold
proceeding.
conferred
if the
the Commission”.
and the Commission.
and is a
attempt
93, quoted
123,
1118.
Court,
reorganization proceeding
the consummation of the
U.S.
Bankruptcy
acceptance
purpose,
Commission,
judicial process in
sufficient
under the
questions for
168 A.L.R.
work
reorganized Company. The
Western
is made
connected
132,
in
plan is
control
the administrative
provides
Warren
involves
79,
in consummation
conveyance
this Court as
abbreviated
of the Plaintiff
validity
act,
party
reorganized Company
66 S.Ct.
and to the
the suit
cooperatively in re-
connection
What vote
87,
validity
60 S.Ct.
in this
and,
railroads of South
accepted by
Smith
77
Federal
functions
60 S.Ct.
Court and
with it.
v.
497.
Connecting
completely
the Interstate
authorize
is,
validity
of Benton
Palmer,
947,
matter,
creditor
reorganiza-
v.
allowed
as it
merger
Palmer v.
form:
Bankrupt-
matter of
Company.
bankrupt-
sole
“The
Hoboken
reorgan-
reorgan-
Statutes
the ac-
convey-
952,
34,
stock-
South
of its
prop-
were,
proc-
867,
dis-
ju-
38,
90
of
in
stated
551,
55 S.Ct.
Company by a vote of its stockholders
comes
them,
Code Sections.
ration
ny,
does
self
Feuerstein,
stockholders.
of
sary
116],
holders
of the contract as between the stock-
Co. v.
Court which
power
mation of
under the authorities
any Corporation.
Equity.
eral
State Court suit to
and can be annulled
Rock
S.E. 536.”
Baldwin,
Magnolia
defeat
Western,
risdiction.
acted in
exclusive
risdiction
60
Court.”
(8)
(7)
(6)
the Code Sections.
L.Ed.
Bankruptcy,
Wall.
cases cited.”
purport
operation
94-329
888
ly
(note 3)
to see but
“A
failed
denied
step
vances another
lib-
the direction of
proceeding under section 77 is not an ordi- eralizing
bankrupt-
law
subject
on -the
nary
bankruptcy.
proceeding
spe-
It is a
corporations
cies. Railway
been defi-
had
cial proceeding
seeks
only
bring nitely
which
operation
from the
of the
excluded
* * *
reorganisationt
about
satisfactory
law in 1910
probably because such
to that
prevent
can be
end
devised
corporations
liquidated
could not be
in the
object
the attainment
tois
ordinary way
byor
a distribution of assets.
defeat
accomplishment
very
railway
end
which A
unit;
is a
it can not be divided
section,
stock,
was the sole aim the
there- up
disposed
piecemeal
like a
toby
(Em-
its provisions
render
of goods.
sold,
all,,
It must be
if sold at
futile.”
phasis supplied.) Continental Illinois Nat. as a unit
going
and as a
Its
concern.
Bank
Chicago
& Trust Co. v.
Rock Island activities cannot be
its con-
because
halted
Co.,
Ry.
595,
&
648,
Pac.
294
55
U.S.
S.Ct.
tinuous, uninterrupted operation
neces-
79 L.Ed. 1110.
sary public interest; and,
for preservation
interest,
of that
saw,
as well as
complete
He
too,
clarity
private
protection
for the
of the various
under the
the Su
controlling decisions of
involved, reorganization
interests
evi-
preme
States,5
Court of
the res
United
regarded
most
dently
as the
feasible solu-
has
which
Court
corporation
had
tion whenever
become
merely, or
exclusive
is not
‘insolvent
unable to meet its debts
mainly,
physical
even
”
they mature.’
It is
debtor railroad.
claims,
reorganisation, including
issues
all
question
Then
whether the
posing
affecting
relating
controversies
enjoin
authority
bankruptcy court
had
reorganisation,
prime res
collateral,
pledge
the sale
held under
proceeding,
formulation, accept
Finance Cor
banks
the Reconstruction
saw
ance
out. Because he
carrying
hinder,
poration,
a sale
ob
would so
“if
control,
clearly
juris
so
saw that the
he
delay
preparation
struct
con
diction,
judge
Reorganiza
which
reoganization
summation of
exercise,
he
must
it”,
answered
properly
com
absolutely
affirmative, saying,
at
controversies,
plete
over all
676,
U.S.,
page
page
294
55
might
the decision of which
af
would or
ordinary
S.Ct.: “It
be that in an
bank
fect, delay, consummate,
interfere with
issue of an
ruptcy proceeding the
of,
quo
consummation
few
presented
circumstances here
* *
will,
tations
the controlling
authorities
proceed
not be sustained
*. But a
I think,
completely
make this
clear.
ing
ordinary
77 not
pro
under section
ceeding
bankruptcy.”
&
Continental Illinois
Bank Trust
Nat.
Ry. Co.,
Chicago,
Jersey,
Rock
& Pac.
Co. v.
Island
Gardner New
U.S.
supra,
page
page
671 of 294 U.S. at
of 67 S.Ct.
a railroad
S.Ct.,
reorgan-
ad- ceeding,
said: “Section 77
court declared
cerned,
any private
corpora-
“There is no law
of Geor-
State
as would
requires
gia
consent of
unanimous
tion.”
compa-
(9)
exigencies
to enable
“In
which confront
ny
Western,
clearly
pow-
to sell
its railroad.
There is no
law
property
newly
er
sell
and no decision
Courts
Geor-
Re-
gia
organized Company
hold that under no
circumstanc-
without
unani-
corporation
railroad or other
es can a
mous consent
its stockholders.”
transfer
Continental
Illinois Nat. Bank &
Chicago,
of its stockholders.”
unanimous
consent
Trust
Rock
&
Co. v.
Island
Pac.
Ry. Co.,
Code
are consent on
“The
Sections
U.S.
part
1110; Thompson
that under
the cir-
State
L.Ed.
Mexican
Texas
Co.,
R.
stated
Code Sections
cumstances
Company may
Railroad
sell all of its
L.Ed.
Smith v. Hoboken
R.
that with this consent on
railroad.
So
State,
quasi public
168 A.L.R.
and Gardner v.
position
Jersey,
stands in the
same
New