197 F. 669 | E.D.N.Y | 1912
This court has appointed receivers of the South Shore Traction Company in the present 'action, who are operating cars over what is known as the Queensboro Bridge, for a three-cent fare. The South Shore Traction Company has franchises extending over this bridge and further out into Long Island, but the present question has nothing to do with anything except the cars operated on this bridge, in what is known as a shuttle service.
The Third Avenue Bridge Company, according to the papers, has also obtained from the city of New York the right to operate cars in Manhattan and over the Queensboro Bridge upon the same tracks as those used by the South Shore Traction Company. These tracks belong to the city of New York, and the franchise or license to both companies is to use these tracks for the purposes granted by the city.
The suit in which the receivers were appointed was a creditors’ action in equity. The receivers have continued by order of this court the operation of cars upon this bridge, and have succeeded in paying the expenses of that operation and the expenses of the receivership, but have not received sufficient return to indicate that a three-cent or shuttle car traffic over this bridge can do more than to furnish a fair return for the expenditure. In other words, there-is no large profit, or no profit at all, to the South Shore Traction Company, after the expenses of the road’s operation are met; so that the advantage to the South Shore Traction Company is a protection of its franchises, and the advantage of maintaining a road in operation. The Third Avenue Bridge Company announced during the month of April, 1912, that upon the 21st day of April, 1912, it would institute a three-cent fare service, by separate c.ars, from Third Avenue, New York, to the plaza in Long Island City — that is, at the eastern end of the Queensboro Bridge — and that no transfers would be received or given. This service would duplicate that furnished by the receivers of the South Shore Traction Company, except for the block between Second and Third avenues in New York as the shuttle car service of the receivers terminates at Second avenue, or at the western plaza terminus of the bridge. Under these circumstances the receivers applied to this court for an injunction restraining the Third Avenue Bridge Company from instituting the service advertised, and a temporary restraining order was granted until the motion for an injunction could be heard. This restraining order has been in effect and the matter adjourned from time to time. The Third Avenue Bridge Company has now answered the application for injunction by raising several objections, not only controverting and contradicting allegations in the petition, but also, and notwithstanding these denials, claiming that this court has no jurisdiction either to entertain the application for this injunction, or to make any order with respect thereto.
The first ground of opposition to an exercise of jurisdiction by this court is that the matter should not be considered as an incident to the present equity action, nor taken up on motion, but that it can only be considered by a bill in equity, and that the United States District Court as such has no jurisdiction. The Third Avenue Bridge Company cites such cases as N. Y. & Harlem R. Co. v. Forty-Second St., etc., R. R. Co., 50 Barb. (N. Y.) 285, Wheaton v. Daily Telegraph Co., 124 Fed. 61, 59 C. C. A. 427, Horn v. Pere Marquette R. Co. et al. (C. C.) 151 Fed. 626, in support of this contention; and it may
If this contention is correct, it must follow that this court has no jurisdiction to protect the franchises of the South .Shore Traction Company, nor the exercise of those franchises' by the receivers, unless the operations of the Third Avenue Bridge Company go so far as to prevent the receivers from running their own cars and carrying on their own operations. But, on the other hand, the position taken by the receivers is not that of a claimant to title or right of possession as to any of the property or franchise rights of the Third Avenue Bridge Company. Hence a determination of whether the receivers are entitled to an injunction would not be a determination of their right to property in the possession of other parties under a claim of title. The cases cited by the Third Avenue Bridge Company, such as Wheaton v. Daily Telegraph Co., supra, have to do with an attempt by the receivers to obtain possession of property in the possession of their opponents, and claimed by the opponents, and such claim of title must be litigated in a plenary suit. This is the law both of equity .and bankruptcy, and its application in bankruptcy is well known. But the receivers have a right in the primary suit to prevent irreparable injury to their property by any one who upon the record has not a right to inflict that injury. They have the right to prevent an act by any one which will interfere with the possession or value of the property that they are administering as receivers, where the record or rights of the party causing the injury show on their face that they have not a legal right to do what they are attempting to do.
It is pointed out by the Third Avenue Bridge Company that the right to operate tracks in a street is a franchise, while the right to run the cars over the city’s property or tracks on the bridge is a mere license, and that the Third Avenue Bridge Company’s franchise in the
It is unnecessary for us to consider whether or not the Third Avenue Bridge Company might operate cars around the block between Second and Third avenues in New York, if they did not attempt to cross the bridge, nor are we concerned with the way in which the Bridge Company’s cars proceed after leaving the plaza in Manhattan. The receivers’ contention is based upon the attempt upon the part of the Bridge Company to operate a continuous trip over the bridge and over a route in Manhattan; and so long as the Bridge Company attempts to use this continuous trip, involving the passage over the bridge, their acts so affect the property in the possession of the receivers that, if this court had jurisdiction to consider the question at all, it could certainly consider whether or not the operation, as a complete schedule, is legal upon the face of the record.
As to the objection to the validity of the franchise itself, through the fact that the change of route was not covered by an amended certificate of incorporation, until after an application had been made to the board of estimate and apportionment for the franchise, there may be considerable doubt. Such cases as Matter of N. Y. L. & W. R. Co., 88 N. Y. 279, and N. Y. & L. I. R. Co. v. O’Brien, 121 App. Div. 819, 106 N. Y. Supp. 909, seem to indícale that invalidity attaches only to a franchise which the company has not provided for, and which it is not legally able to receive at the time it is granted, and that such invalidity will not follow the anticipatory irregularity of premature preparation for a somewhat different route. The case of the Steinway Tunnel, N. Y. & L. I. R. Co. v. O’Brien, supra, does not seem to be to the contrary, but there is at least doubt enough upon the matter so that an injunction should not issue for this cause alone.
As to the objection which is made by the Bridge Company that the receivers are not in a position to ask relief in equity, because of the alleged abandonment or loss of their own franchise, it need only be said that the charge is contradicted by the receivers. Any such issue can be disposed of upon proof, or by reference upon this application, and, until this court as a court of equity • can see that the petitioners do not come to it with clean hands, the temporary stay should continue and the injunction asked for be granted.
The motion, therefore, to continue the restraining order will be granted, and any issues presented by the answer, which are not disposed of by the rulings upon the present motion, will be set down for further proof or-referred.