221 F. 440 | S.D.N.Y. | 1915
The motions were noticed by Benjamin S. Catchings, Ésq., as solicitor of “Accident Creditors’ Fund, a corporation.” No such person has heretofore intervened in this proceeding or made any application to be allowed to do so. It has no present standing to notice motions such as these. Mr. Catchings, however, also gave notice on behalf of the “Tort Creditors’ Committee,” which was long ago recognized in these proceedings. Such notice therefore entitled
. [1] When the first motion was called for hearing, counsel for the Tort Creditors’ Committee raised the objection that the judge then sitting could not hear the motion because it dealt with the question of seting aside orders he had himself made; it being stated that, when a similar motion was made a week before to the Circuit Court of Appeals, he had withdrawn from the bench, stating that he was disqualified to hear it. As member of an appellate court, a judge cannot sit on a review (in whatever form) of his own order. The present motion, .however, in the District Court, is directed to the vacation of four orders (one in each of the above causes) made by this same judge and entered in the District Court. A motion to set aside an order, on the alleged ground that it was improvidently made, may always be heard by the judge who made it. It not infrequently happens that some order is made in the District Court, which one party or the other wishes to modify or set aside, and makes a motion so to do. If when that motion appears on the motion calendar, some other judge is hearing that calendar, it is common practice in the District Court to send the parties to the judge who made the order. If they satisfy him that he had made a mistake, he corrects it himself; if they fail to do so, he denies the motion to vacate or modify, and from his refusal appeal may be taken, as it might have been from the original order. The protest now made by the moving party is noted, and his exception to the hearing of the motion is allowed, whereupon he presents his motions, without prejudice to his rights.
The four orders (one in each suit) which it is sought to vacate were made in conformity with the provisions of the Judicial Code:
“Sec. 18. Whenever, .in the judgment of the senior Circuit Judge of the circuit in which the district lies, or of the Circuit Justice assigned to such circuit, or of the Chief Justice, the public interest shall require, the said Judge, or Associate Justice, or Chief Justice, shall designate and appoint any Circuit Judge of the circuit to hold said District Court.”
■ This provision for designation of a Circuit Judge was not in the original bill. It was inserted, while said bill was under consideration in Congress, on application of the United States attorney for the Southern district of New York. Attention was called to the fact that, on whatever day the existence of the Circuit Court should terminate and its business be transferred to the District Court, there would probably be found on the equity side of court suits which had been in part tried and disposed of by interlocutory decrees or decretal orders before some
The old Circuit Court ceased to exist December 31, 1911. As had been expected, at that time there were, besides those above entitled, soiue causes in the Southern district of New York a.nd one or more in Connecticut which had been theretofore conducted each before a single Circuit Judge, and which had been well-progressed towards conclusion, but not yet completed. In each of these an order was made by the senior Circuit Judge, designating the particular Circuit Judge who had bad it. in charge to finish the cause. A like condition existed in this street surface railroad receivership. All prior proceedings had been had before the senior Circuit Judge. Many decrees and decretal orders had been made, which had been reviewed by the Circuit Court of Appeals. Very many claims had been liquidated. On December 31, 1911, at midnight the property which receivers had operated was turned over to purchaser at foreclosure sale. Further liquidations and accountings remained to be disposed of. The situation was like that in the other unfinished causes, and designation of the Circuit Judge was as desirable in the one case as in the others. The circumstance that, since he was the senior Circuit Judge, he would thereby designate himself seemed unimportant. There was no selection involved in the appointment, that was determined by the condition of the causes, and it seemed unnecessary to trouble the Circuit Justice or the Chief Justice of the United Plates with a mere detail of local administration. Had any one at the time advanced this technical objection, an order of designation with a statement of the situation could have been presented to one or other of them. But no one objected, the proceedings have gone on as usual for three years, much has been done, and the end of the voluminous and complicated proceeding is now in sight.
The notice of motion is accompanied by a statement of grounds on which it is asked that the orders of designation be vacated or the designation revoked. The proposition that the senior Circuit Judge could not designate himself in a case where conditions were such that designation should be made has been already considered. The suggestion that a Circuit Judge should not sit in a District Court, because appeal from his decision will come before his associates in the Court of. Appeals, is sufficiently disposed of by section 18, supra, and by a reference to the debates on the Judicial Code. One objection seems to be that, when a single judge has sat for a long time in the disposal of the
The next objection is that the “validity of the original appointment (of Judge Dacombe) is uncertain.” It may be gathered, however, even from the moving papers that the original appointment was made while Congress was not in session. After it assembled in December, 1887, and the Senate took up the subject of confirmation, it objected to confirming a so-called ad interim appointment, whereupon the old appointment was withdrawn, and a new one, made while Congress was in session, was confirmed by the Senate February 28, 1888.
The further objection that recent legislation abolishing the Circuit Courts has practically deprived all the Circuit Judges of the right to hold any court is not found persuasive.
The motion to- set aside the orders or to vacate the designation therein made is denied.
The second motion is “to dismiss the petition of the Guaranty Trust Company, verified January 15, 1915.” It was argued with the motion on such petition, and both will be disposed of in a separate memorandum.
The third motion is to require the receiver of Metropolitan Street Railway to file certain accounts. The fifth motion is to vacate a so-called “omnibus” petition of said receiver. These were argued at the same time as the motion on the “omnibus” petition, to which they were germane. All will be disposed of in separate memorandum.
The fourth motion is to instruct the New York City receiver to “pay and carry in suspense a sufficient amount to enable the Tort Creditors’ Committee to continue its work of assisting and defending the rights of accident creditors as a class,” or in the alternative “that the receiver employ separate counsel to represent him in so far as he is charged with the duty of representing the said creditors and all creditors whose claims were entitled under the creditors’ bill to participate in the benefits thereof as of September 24, 1907.” There is also a motion, made some little while ago and held up to await the presentation of these later motions, in which it is asked that “an advance payment of not less than $5,000 on account of the services and disbursements of
The Tort Creditors’ Committee was appointed by a number of owners of claims for damages for personal injuries which have been allowed by the special master (no one disputing the propriety of such allowance) against the estate of the New York City Railway Company. These claimants have been held to rank with other unsecured creditors, and it is the general expectation that upon final distribution of that estate, after payment of all claims entitled to priority, there will be enough left to pay some dividend to each unsecured creditor. Where any such creditor lias retained counsel to represent him, and such counsel has appeared and rendered services, reasonable compensation therefor would be due from client to counsel, and upon the amount of such creditor’s dividend counsel would have a lien for such compensation. The court in which the proceedings had been conducted would also, in the event of controversy between client and counsel, determine the amount of such reasonable compensation. The same results will follow where many creditors of the same class have united in the prosecution of their claims and through a committee of their own appointment have selected a counsel to represent them collectively.
If the situation now were such as is indicated above, there might be no objection to advancing a proper sum on account of the amount which will ultimately be received in the way of dividends by the group of claimants who selected the committee (or agreed to the selection) and retained solicitor and counsel. But it is not now certain that such is the situation. How many of these tort claimants originally agreed to be represented by committee nowhere appears. It lias always been assumed that they were considerable in number and amount. But it was stated on the argument, and the same is set ionh in one or more of the answers, that all of those who agreed to such representation accepted the offer made by the reorganization committee, assigned their claims, and were treated on reorganization as if they were holders of first mortgage bonds of the Metropolitan Company, even though in law their claims were provable only against the New York City Company. They received their new securities, which were salable at amounts equivalent to a large percentage of their liquidated claims. Of course, none of these persons are any longer claimants against the estate in receivers’ hands; no dividend will be paid to them, since they have already been paid. It is uncertain, therefore, whether there are any claimants (whose claims have been allowed) who have agreed that this committee, its solicitor, or counsel should represent them. In the absence of proof that there are such claimants now of tlieir own volition represented by this committee and its counsel, it would not be safe to make any advance payment. The question whether deductions can be made for committee and coitnsel from the dividends of those claimants who never agreed
Since the argument of the motion some lists of names have been filed, purporting to be those of claimants, who have not assigned their claims and accepted reorganization securities, and who are now in agreement that the committee, its solicitor and counsel should appear in their behalf. If there is any money to be now paid—in the language of the motion, “as an advance—to be ultimately charged against the distributive share” of these tort creditors, it should first be ascertained in some way that these creditors assent to such payment as one properly to be charged ultimately against their distributive shares.
From what was said in argument on the motion made prior to these 11 motions, it would seem that a payment on account to committee for its counsel is to be made on another theory. Reference was made to an opinion of the Circuit Court of Appeals for this circuit (Robinson v. Mutual Reserve Life Insurance Co., 189 Fed. 347, 111 C. C. A. 79), where the court said:
“Where a complicated controversy involving many different interests in a fund is before the court, and some particular interest is not so represented that the facts supporting its claim are likely to be fully brought out and properly presented, we know no reason why the court may not assign some competent person to do such work, and compensate him as receivers’ counsel are compensated, viz., out of the funds in the hands of receivers. We think it would be unfortunate if the courts did not possess such power, because the receivers necessarily represent so many different interests that they must generally stand neutral, and there will be many occasions where correct conclusions can be reached only after all sides of the controversy have been vigorously presented.”
In the early’stages of these receiverships, it may be urged that the situation was such as that referred to in the quotation, and that committee and counsel for the original group of tort creditors, above referred to, should be awarded an allowance for services out of the general funds as an expense of administration. But applications for such special allowances are to be passed upon at the conclusion of the whole case. Then only can it be determined whether the services, considered as a whole, have or have not been generally helpful towards an equitable and expeditious disposition of the proceedings. It would not be safe to make an advance against some such expected allowance, unless there were assurance that, should such allowance not be made or finally approved, the amount of the advance could be charged against the dividends of claimants. Speaking for myself personally, I would state that, if the question of special allowances of this sort were before me to-day as part of a final decree, I should be inclined to make such allowance from the general funds of the estate. But whether or not I shall be sitting in this court, when those questions come up for determination, no man can tell. It cannot be safely assumed that on some unknown day in the future the particular allowance asked for will be made.
The motion is denied, without prejudice to renewal when it is shown how many claimants in number and amount are now agreed that this committee and counsel should represent them.
The sixth motion is to confirm a report of the special master, dated January 25, 1915, in re claim of Guaranty Trust Company. The seventh motion is to confirm a like report of the same date in re a claim of Farmers’ Loan & Trust Company. The eighth motion is directed to the same reports.
'flie time to file exceptions to these reports has not expired. When the reports come up regularly for confirmation, the present applications may be considered. They are now premature.
The ninth motion is to instruct the receivers to collect the sum agreed to he paid into court by the purchaser at foreclosure sales. If is premature. Until some proceedings yet undisposed of, referred to in the “omnibus” proceeding, are disposed of, it cannot be known how much of the total sum the purchaser should pay.
The tenth motion is to vacate the order of December 29, 1914, in re Breach of Lease claim of Metropolitan road. Reference may be had to the opinion filed on that claim. As the solicitor of this committee filed no exceptions to the special master’s report and presented
The eleventh motion is to permit the filing nunc pro tunc of exceptions by Tort Creditors’ Committee to the special master’s report on Metropolitan’s claim for breach of lease. The excuse for not doing so—temporary absence—might be good enough, if it had been promptly presented. It comes too late when offered months after the case was heard and decided.
Motion denied.
On Application to Vacate the Order of December 29, 1914, in the Matter of the Claim of Metropolitan Street Railway Company for Breach of Lease.
The day before memorandum was filed (February 10th), disposing of the 11 motions made by Tort Creditors’ Committee, a statement was filed on its behalf, which the court did not understand referred to the tenth motion. As it seems, however, to suggest the grounds for that application, viz., to vacate the order allowing the receivers of Metropolitan estate to file claim'for breach of lease,- nunc pro tunc, some reference should be made to it.
Apparently the application is made on the theory that; in making the order allowing that claim to be filed, some special fávor was accorded, to the detriment of the tort creditors. The facts do not support this contention. The final date for filing claims was fixed originally as December 10, 1907. For a long time thereafter belated claimants appeared, and whenever any reasonable excuse was offered for their delay such claims were ordered filed nunc pro tunc as of the original date. When over two years had elapsed, it was thought that something should be done to end this filing of claims. Therefore on January 12, 1910, the City receiver was instructed to give notice that after March 1, 1910, no more nunc pro tunc orders of that sort would be made. This notice was not only advertised in the usual way, but also in the various newspapers in this city which were published in foreign languages. To the publisher of each of such newspapers a letter was sent, suggesting that it would be a kindly act if his paper should in its news columns make some reference to the advertisement, as some of the belated claimants were possibly foreigners, who did not read newspapers other than those printed in their own language. In consequence a number of tort claims were filed, and also several other claims. The Third Avenue Railroad Company, the Union Railway Company, the Forty-Second, etc., Railway Company, the Dry Dock Railway Company, Montague, as receiver, the Central Park North & Fast Railway Company, the Mercantile Trust Company, the Equitable Fife Assurance Society, the Metropolitan Securities Company, the Second Avenue Railway Company, Hemphill et al., and the Central Crosstown Railway Company all filed claims in January and February, 1910. This claim of the Metropolitan for breath of lease was filed February 28, 1910. No special order of allowance was then -made. Counsel apparently assumed that it was properly filable under the order of January 12,
If the present contention is that the court should have allowed tort creditors to file claims as late as February 28, 1910, but should have refused the same relief to all other creditors, it does not commend itself to a court of equity. Since March 1, 1910, the trustees under the two mortgages have been allowed to file claims; but those claims are for deficiencies on foreclosure, and, of course, could not have been filed until it was known whether there would be any deficiency. This could not be known, until confirmation of the sale in foreclosure—late in 1911.
An order nunc pro tunc was also made subsequent to March 1, 1910, allowing the Waterbury Committee to file h claim; but it was expressly stated in the memorandum accompanying the order that this was no new claim, but merely an assertion of some special interest in a claim already filed.
Counsel for 'fort Creditors’ Committee knew of the order in reference to Metropolitan claim for breach of lease when it was made. He did not appeal from it, although other orders, some allowing and others disallowing the filing of claims nunc pro tunc, have from time to time been brought before the Court of Appeals. He appeared in this court when the special master’s report on the claim was being reviewed, but raised no such objection as that now presented.
When receivers were appointed October 1, 1907, they took over the lease referred to as part of the estate of the Metropolitan Street Railway Company. The claim in question is for damages sustained by that estate for breaches of said lease.
No ground for vacating the nunc pro tunc order appeared, and the motion was therefore denied.