Motion of David Donoghue — Texas v. Donoghue

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| ee | er Office - Supranse Coury, U. $

FILE COPY 3 FILED

ocr 23 1937

TX, FP GHARLES ELMGRE CROPLEY

CLERK

‘

Supreme Court of the United States

OCTOBER TERM, 1937

No. 28

ee = .

STATE ‘OF TEXAS aAnp J..€. CLOPTON AND

BULLOCK HYDE, RECEIVERS, ETC.,

= Petitioners,

a5 Mil ;

DAVID DONOGHBE, TRUSTEE oF TRINITY

_ REFINING COMPANY, DEBTOR.

Motion of David Donoghue, “Trustee, Under an

Order to Liquidate, to Be Substituted as Respondent

for David Donoghue, Trustee.

a

rs an ll

R. W. KELLOUGH, »*

Tulsa, Oklahoma,

? ‘ Attorney for Movant.

H. T. McGown, oo ee oe

H. L. LOGAN, JR., ac & )

Fort Worth, Texas,

Of Counsel. | °.

ad

‘Supreme Court of the United States

OCTOBER TERM, 1937,

1». No. -

@

’ STATE OF TEXAS anp'J. C. CLOPTON AND

BULLOCK HYDE, RECEIVERS, ETC.

Petitioners,

VS.

DAVID DONOGHUE, ta, OF TRINITY

_ REFINING COMPANY, DEBTOR,

Respondent.

Motion of David Donoghue, Trustee, Under an

Order to Liquidate, to Be Substituted as Respondent

. for David Donoghue, Trustee..

—

rd

To the He norable the Chief Justice of the United

States, and the Associate Justices of the Supreme

Court/of the United States:

Your petitioner, David Donoghue, Trustee, re-

spectfully. —

*

Your petitioner shows that he was heretofore and

on the 18th day of December, 1935, appointed Trus-

a .

sills

tee of the estate and property of Trinity Refining |

Company, debtor, in a proceeding for the reorgani-

zation of a-corporation, No. 1969, in bankruptcy,

in the United States District Court for the Northern

. District of Texas; that he qualified and acted as

such Trustee; that he was the respondent named

and described in this cause and the writ of certiorari

granted by this Honorable Court to the United States

Circuit Court of Appeals for the. Fifth Circuit.

II

.Petitioner shows that on the 24th day of Septem-

ber, 1937, an order was entered by the Honorable

District Court for the Northern District. of Texas

_ at Fort Worth, in Cause No. 1969, Trinity Refin- |

ing Company, Debtor, for the liquidation of the es- .

. tate and. property of the debtor corporation under

the provisions of Section 77B*fc) (8) and Section

77B (k) of the Bankruptcy Act of the United States;

a copy of said order is attached hereto and made

a part hereof and marked “EXHIBIT A.”

I

Petitioner shows that in pursuance of the terms

_ of the order to liquidate aforesaid he was, on the ©

14th day of October, 1937, appointed Trustee at a

meeting of the creditors called for that purpose in

pursuance of Section 44 of the Bankruptcy ‘Act; —

that he has qualified as such Trustee and is the duly

: |

P it

acting TPustee under the terms of the order to liqui-

date-aforesaid.

; IV

_ Petitioner says that by virtue of Section 46 of

the Bankruptcy Act he should be substituted in his

capacity as a Trustee under the order to liquidate

aforesaid in liew and)instead of as Trustee before

liquidation under the provisions of Section 77B; there

is attached hereto and marked “EXHIBIT B” a:

copy of the order of the Honorable Glenn Smith,

Referee, dated October 14, 1937, appointed petition-

er Trustee, and there is attached hereto and marked

“EXHIBIT C” a copy of the order of the Honorable

Glenn Smith, Referee, dated October 14, 1937, ap-

proving tHe bond of petitioner as such Trustee.

Vv :

Petitioner further says that, as Trustee under the

order to liquidate aforesaid, he succeeded to all. of

the rights and powers of his former status as Trus-

‘tee and that by virtue of the provisions of Section

77B (k) his appointment .as Trustee is analogous

and comparable to the appointment of a Trustee in

general bankruptcy. _ 7

VI

Petitioner further says. that upon his appoint-

ment as Trustee, under the order to liquidate, coun-

ae. ok Ale ie

_ sel was appointed by the Court to represent peti-

tioner in such ‘capacity; that this cause is set down -

for submission to this Honorable Court and for ar-

gument during the week of the 18th of October,

1937; that petitioner desires that his change in

status be made known to this Honorable Court and >

that petitioner’ be permitted.to file a supplemental

brief in such capacity for the purpose of supple-

menting the brief: heretofore filed by petitioner in

his former capacity. |

WHEREFORE, this etitioner prays that an

order be entered substituting him as respondent. ~

herein in his capacity as Trustee under an order to

liquidate in lieu and instead of his former capacity

- as Trustee, and that he may have leave i in such ca-

pacity to file a supplemental brief upon the propo-

sitions involved in this cause. :

~ DAVID DONOGHUE, Trustee.

. bd / ;

Attorney.

R. W..KELLOUGH, Tulsa, Oklahoma,

H. T. McGown,

H. L. LOGAN, JR.,

Fort Worth, Texas,

Of Counsel. ©

a Se

I, R. W. KELLOUGH, duly appointed attorney

for DAVID DONOGHUE, Trustee; hereby certify

that a copy of this motion has been delivered in

‘persorito-counsel for petitioners and to counsel for ,

- the original Bi si this cause.

a

a ea Lis Lg.

VU

SWORN TO AND SUBSCRIBED before me this

15th day of October, A. D., 1937.

,

. * Notary Public in and for Tarrant

County, Texas.

~ a

-

rs _ EXHIBIT A

IN THE UNITED STATES DISTRICT’ COURT.

‘FOR THE NORTHERN DISTRICT

OF TEXAS,

“At Fort Worth. -

In the Matter of TRINITY REFINING

COMPANY, Debtor.

In Proceedings for the Reorganization of a

Corporation. .

No. 1939. |

Order Directing the Trustee to Liquidate the Estate

of Debtor Corporation. — 2

On the 20th day of April, 1937, there came on

to be. heard the motidn of H. U. Everett, D. K.

-Hutchcraft and Howard Hali, Secured Creditors’ a

- Committee, Trinity Refining Company, for an order

‘directing the liquidation of.- the property and assets

_of the debtor corporation in. this cause, in pursuance ©

of the terms of Section 77b(k) of the Bankruptcy

Act of the United States, as amended, and thereupon

an order was entered on the 21st day of April, 1937,

continuing ‘the hearing thereon, reserving to mov-

ants the right to be heard thereon at such time as

might be fixed and determined by the Court; on the

ilies

17th day of July, 1987, the motion again came on

to be heard and by order made and entered as of -

that date it was thereupon continued to the 2nd.day

of August, 1937; upon said date the matter was

again continued by order made and entered in this

cause to the 21st day of August, 1937; upon said

date it was again continued to the 15th day of Sep-

tember, 1937, by order made and entered in. this

cause; on the 15th day of September, 1937, it was

- not Mssible to be heard and it was thereupon con-

tinued until the 22nd day of September, 1937, at

10 o’clock in (" forenoon. <7 de -

On the 22nd day of September, 1937, the. motion:

then came on, to. be heard and-there appeared H. U.

Everett, D. K. Hutcheraft and Howard Hall, Se-

cured Creditors’ Committee, Trinity Refining Com-

pany, by counsel, Trinity Refining Company, debtor

corporation herein, by its officers in person and by

counsel, David Donoghue, Trustee herein, in’ person

‘and by ¢ounsel, The State of Texas, by W. J. Holt.

and Wm. C. Davis, Assistant Attorney Generals, |

the Department of Internal Revenue and W. A.

Thomas, Collector, by J. L. Backstrom, Special At-

torney of the United States, General American Tank

Car Corporation, by counsel, John Tancred, Sr., in.

person, and Taleo Pipe Line Company, by counsel.

Thereupon evidence was adduced and argument

of counsel had and the Court finds that notice of

the time, plaee and purpose of this hearing was duly

given in the manner provided by the order hereto-

: |

ee

4

,

v P \

. fore entered on the 1st day of April, 1937, as is evi-

denced by the order heretofore entered in this cause

on the 20th. day of, April>-+937; That theeorder -

heretofore made and entered in this cause on ‘the

15th day of January, 1936, purporting to ‘confi#m

a plan of reorganization in this cause was not in-

tended to confirm a completed plan of ‘reorganiza-

_tion; that rgquisite acceptances of the plan of re-

organization. filed in this cause have not been se-

cured or tendered in conformance with the plan of .

reorganization; that the debtor corporation is fy

solvent; and that it is not possible that an acceptable

plan of .reorganization can be filed or offered in

this cause; and that the Court is of the opinion that |

the property and estate of the debtor’ corporation

_ should be liquidated by directing the Trustee to-

liquidate the estate in pursuarice of the provisions

of Section 77-b(k) of the Bankruptcy. Act’ of the

United States, as amended, it is, therefore,

ORDERED— — ;

That the order heretofore made and entered in

_ this cause on the 15th day of danuary, 1936, approv-

ing and confirming the plan of reorganization pro-

posed by the debtor corporation be set aside in so

far as the said order purports to-confirm a plan of

seceuiadilis in this cause, and it is further

ORDERED— .'_ .

That the Trustee liquidate the estate of the debtor

corporation herein pursuant to the provisions of Sec- -

\

tion 77-b(c) (8) and Section 77-b(k) of the Bank-

ruptcy “Act of the United States, as amended, ang =

‘it is further

ORDERED— .

‘That this cause be referred to the Honorable Glenn

Smith, one of fhe Referees of this Court, for all

matters pertaining to,the further administration

and liquidation of the estate of the debtor corpora-

tion herein, except as to such matters as are herein

—— reserved, and it is further

ORDERED— ;

That the Honorable David sanaian Trustee, !

now in possession of the assets and property of debtor

corporation under orders of this Court, be and re-

main in possession thereof -as Trustee, pending the*

appointment of a Trustee or Trustees at the first

meeting of creditors ta be held by the Referee in

pursuance of Section 77-b(k) (3) of the Bankruptcy

Act of the United States, as amended, and it is

further

ORDERED—

That all of the orders heretofore entered in this

cause with respect to the possession and custody of»

the estate and property of the debtor corporation

- andor the conduct of thé business of debtor corpora-

_ tion by the Trustee be and remain in full and bind-

.. ing force and effect until the appointment of a Trus-

tee or Trustées, as hereinabeve ordered, and be it

further |

GA

— = +r

—10— :

“ORDERED. ee.

That ho orders shall be entered by the Siting

to whom the matter is here referred, or any action

- taken by the Honorable David Donoghue, Trustee,

or the Trustee or Trustees to be hereafter appointed,

as hereinabove ordered, with respect to certain crude

oil or petroleum products now in storage in posses-

sion of the Trustee in this cause which shall in any~

manner conflict with or be violative of an order

entered in Cause No. 28, October Term, 1937, Su-

_ preme Coupt.of the United States, on the 3rd day

- of July, 1937,-by the ‘Honorable Benjamin M. Cor-

dovo, Associate ‘Justice, in the case of the State of.

Texas and J, C.-Clopton and Bullock. Hydet, Re-

ceivers vs.. David Donoghue, tee, Trinity Re-

fining Company, debtor, in which case the right of:

title and custody-to the-crude oil or petroleum prod- -

ucts is involved, and be it further

ORDEKED—

. That all claims of creditors heretofore’ filed with

the Honorabk Glenn Smith as Special Master in

‘this cause, shall be delivered to avid filed with the —

Honorable Glenn Smith as Referee in Bankruptcy

. and shall be considered to be filed with the Referee

_ag of the date of the delivery of the elaims to the

Referee by the Special Master gnd that the status

‘of all claims heretofore passed i and determined

by the Honorable Glenn Smith as Special Master

in this cause and as reflected by his reports as Spe-

» cial Master, heretofore filed in this cause, shall be

¢ :

‘

hear and determine all matters_with respect to al-

_lowances for Trustee’s fees, counsel fees and dis-

"© “—jI— .

» = :

deemed to have been heard and determined with

respect to the amounlyand status thereof, Without

reference to rights of pridrities between the cred-

itors whose claims are therein reported, or otherwise;

ajl cldims hereafter to be filed shall be proved, .as

provided in Séction 57 of the Bankruptcy Act of

the United States and in conformance with Section -

7 7-b(k) (4) of the Bankruptcy Act, and it is further

ORDERED—

Thatthere is reserved to this Court the right to

_ -bursements to the. Trustee herein, counsel for the

- Trustee, counsel for debtor corporation, creditors’

committees and counsel for creditors’ committees,

and it is further

ORDERED—

That all applications for allowances for Trustee’s

fees, counsel fees and disbérrsements. by the Trustee

o .

herein, counsel for the Trustee, counsel for debtor

corporation, creditors’ committees, and ~ counsel

therefor, shall be filed with the @terk-ef this Court

on or before the 2nd day of November, 1937, to be

thereafter heard and determined by this Court at

such date as-may be convenient. — ;

Dated at Fort Worth, Texas, this 24th day of ©

September, A. D. 1937. aes

t ae . J, c. WILSON,

District Judge. |

s

ae eo

EXHIBIT B°

IN THE DISTRICT COURT OF THE

‘UNITED STATES

FOR THE NORTHERN DISTRICT OF TEXAS

AT FORT WORTH

Office of Glenn Smith, Referee in Bankruptcy,

Fort Worth, Texas .

t

wae

Appointment of Trustee .

In the Matter of Trinity Retains Company,

Debtor, No. 1939 in Bankruptcy.

At Fort Worth, in said District, on October 14;

1937, before. me, Glenn Smith, Referee in Bank-

ruptcy:

' This being the day nore by the Court for

the first meeting of creditors under said Bank-

ruptcy, and of which due notice has been given in

the Gladewater Times, Gladewater, Texas, and by

mailing notices to all creditors listed in the sched-

ules, I, the undersigned Referee of said Court in

Bankruptcy,-sat at the time and place above men-

tioned, pursuant to such order, to take the proof

_ of debts and for the choice of a Trustee under said

ee

» °

bankruptcy, and I do hereby certify that the creditors

whose claims had been allowed and were present,

or duly represented, failed to make choice of a

Trustee of the bankrupt’s estate, and therefore I_ -

lees

—

do hereby ieee David Donoghue of Fort Worth

of the County of Tarrant and State of Texas, as

Trustee of the same, and I do hereby fix the —

sum of his bond at $10,000.00.

GLENN. SMITH,

Referee in Bankruptcy.

_ EXHIBIT C

“3 ‘ e ws :

sd _IN THE DISTRICT COURT OF THE

| UNITED STATES on

FOR THE NORTHERN DISTRICT OF TEXAS

AT FORT WORTH ©

Office of _— Smith, Referee in Bankruptcy, |

«Fort Worth, Texas

At a Court of Hieilecepteg, held in ‘ji for the

Northern District of Texas, at Fort Worth, this

14th day ef October, 1937.

Before Glenn Smith, Referee in Bankruptcy, in -

the District Court of the United States for the North-

ern District of: Texas.

In the Matter of Trinity Refining Company,

| ‘Debtor, Order Approving Trustee’s Bond, No. 1939

in Bankruptcy.

_)

It appearing to the Court that David Donoghue _

of Fort Worth, in said District, has been duly ap-

pointed Trustee of the estate of the above named

bankrupt, and has given a Bond with sureties -for

the faithful performance of his official duties, in

the amount fixed by the Court, to-wit, in the sum

of Ten Thousand Dollars,

_ IT IS ORDERED, that the said bond be, and the

same. is hereby approved.

GLENN SMITH,

Referee in Bankruptcy.

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Baath

OCTOBER a 1937

-- % ; . a. qs om

No. 28 | .

STATE OF TEXAS AND J. ¢ (LOPTON AND

, BULLOCK HYDE, RECEIVERS, ETC., rie

316 : : Petitioners, “ts

VBE : Sie?

DAVID DONOGHUE, TRUSTEE OF TRINITY

Yaa, COMPANY, ‘DEBTOR. '

4.

ON WRIT OF CERTIORARI TO THE UNITED STATES CIR-

_ cur coURT OF APPEALS ‘FOR THE FIFTH CIRCUIT.

Gee ‘Senplddleetah' Bitef'of © the.

David Donoghue, Trustee, following Order ‘ to

~*

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1

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INDEX

5; . Page

ss a EG ae 2

- RESUME: CONTENTION OF PETITIONERS... 3

CONTENTIONS OF RESPONDENT... 4

‘1. Proposition No. 1 ............ ee ene io

2. Proposition,.No. 2%... SPL SP SES TaEOR| 5

8. Proposition No. 3............ As. Ne Viiteah OY Water teed ale ae

- 4, Proposition -No. 4..00...0.0...00000000ccccceesceeeeeeeee dirs ‘. 6

—B. Proposition No. 5........-.......-....-eeeeeees See Se 6

‘STATEMENT, AUTHORITIES AND ARGUMENT

- under: -

Proposition No. bee... pssst ees eesenss ese sene 6-9 inc.

_ Proposition No. 2.2.0.2... 0 cee seecesecee eens 10-16 inc. ,

Propositions Nos. 3 and 4...... eer an URE ST 17-21 inc.

Proposition No. 5.................. iedhneadaaasacadibeatde 22-26 ince:

IN ct ye Bae 26

(EE 5 Ais a OO 27

— 3

x

:

ii | .

TABLE ad AUTHORITIES CITED s

Page

Abramson and a ae Matter of (Cir. Ct. 2nd

‘Cir. 1914), 210 Fed. 878........... i aR en 20

The Antelope, 10 Wheat. 66... miaiet ae ARR ISTO RUT 21:

Berry vs. S. Maris, 76 N. J. L., 302e...0000 ee. 13

Board of Trade vs. Johnson, 264 U. S. 1, 11, 44S. Ct.

Fe 8 eee Bsnanigghennneennes 9

Chez Marianfie, In Re, 15 F. Supp. 327.........0..0....0........ 23, 24

Clark vs. Protection Insurance Co., 1 Story 134, ,

EE SR EP ee, oe 14

Commonwealth of Penn. vs. York Silk Mfg. Co. (Cir.

Ct. Sed Cir. 1911), 192 Ped. @1...............:...........:.... 20

Craig vs. Kline, 96 Pa. St. 399, 3 Am. Rep. 636 lames 13

“Darsp vs. People, 51 Ill. 386, 2 Am. Rep. 301.......... a

Ex Parte Baldwin, 291 U. S. 619, 615, 54S. Ct. 551,

: Te Ts Be tnietiiesnctnelncissanininianistsacnnnasiansaninian 9

‘Heidretter vs. Elizabeth Oil Cloth Co., 6 Fed. 141... 14

‘Herbert vs. Crawford, 228 U. S. 204, 205, 33 S. ct

73 2% fF PRR eee 9

* snpermational Shoe Co: vs. Pinkus, 278 U. S. 261, 265,

pe ee de YY. Sh ee 19

Isaacs vs. Hobbs Tire & Timber Co., 282 U. S. 734,

737, 788, 51 S. Ct. 270, 75 L. Ed. 645:............... 9

Kate Heron, The, 6 Sawy. 109, 111, Fed. Cas. 7619... 15

Matlow vs. Missouri, 295 U. S. 97, 79 L. Ed. 1327........ 14

’ Murphy vs. Hoffman, 211 U. S. 562, 568, 569, 28 S.

Se eee aaeeeceecnsenenanses 8

New York vs. Irving Trust Company, 288 U. S. 329,

8 eS | eee * 18

New York vs. Jersawit (1923) 263 U. S. 493, 68 L.

EET, GI” ssh ict esticsednetasdiconeneenannsiniaeiamapeiaebeaaniedenedaeann 20

iii

TABLE OF AUTHORITIES CITED (continued)

Page

chencit vs. Peay, Si Ped.:Ces. G8..:...........\..... -, is

Semon, Matter of (U.S. Dist. Ct. Conn. 1935), 11

i ka 20

Sterling, The (Cir. Ct: 5th Cir. 1933) 65 F. (2d) 439 14

—— vs. United States (Cir. Ct. of App. Ist Cir.) 46

. (2d) 757, EPR EEE er SOS sesbeall » 12,14

Save vs. ‘Donohue, 207 S. w. 206, Aff.,. (1925) -

275 S. W. 396, 115 Tex. a... cca ae

United States vs. Birmingham Trust hanininiey (Cir. ;

Ct. 5th Cir. 1919), 258 Fed,562...........0.¢..%..: 20

United States vs. Grundy, 3 Cranch (U. S.) 337, 3

ty PGR ee RE Ts"

United States vs. One Hundred Barrels, 2 Abb. (U.

S.) 314, 320, S. C. Fed. Cas. 15948.......00000000... 14, 15

United States vs. Three Hundred, Ftc., 28 Fed. Cas.

PE ET ee ae a 14

United States vs. 1960 Bags of Coffee, 12 U. Ss. (8

Cranch) 398, 405, 3 L. Ed.. 602.......:....:.........2..... 14, 15

United States vs. 66 Barrels of Whiskey, 25 F. Cas.

Sa ean 12

United States vs. 100 Barrels Distilled Spirits, 14

. & < 2 SS ee eee 14

United States vs. Mars, 12 U. S. (8 Cranch) 417,

is i eemtignabbcns 15

‘United States vs. Stowell, 133 U. S..1, 17, 33 L. |

Eds. 559 EEO EINE Te LAE ORO TOE eT TO, 13

Wabash Refining Co. vs. Adelbert: College, 208 v. S.

38,54, 28 S. Ct. 182, 52 Is. Ed. 379.................2..... 9

Wisconsin vs. Pelican, 127 & & Dearest 21

_ Article 6066a, Sec. 10, R. C.S. (Acts 1935, 44th Leg. "

p. 624, Ch. 246) ..........: ance CET SEEN a 9, 10, 16

Bankruptcy Act of 1898, as amefided, Sec. 64........ ae

Bankruptcy Act of 1898, as amended, Sec. 57(j)........ 20, 21

Bankruptcy Act of 1898, as amended, Sec. 77B, as”

SS AERIS. IE LAPS SD are nes «Anes wee 6, 23, 24, 25

Bankruptcy Act of 1898, as amended, Sec. 63............ 20 .