# Brief for the Respondent — Carpenter v. Wabash Railway Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Brief for the Respondent
- **Published:** January 1, 1940
- **Citation:** 309 U.S. 23

## Text

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No. 230

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IN THE ~
Supreme Court of the United States

tie " Octopr Tena, 1939
Prrer J. Canpenten,

2, i See Petitioner,

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Se Wapasu Raipway Campayy, ‘Frank C. Nicopemvs, Jr., and
~~ Norman -B. Pitcatry, Receivers of Wabash Railway
Company, THe Cuase National Bank oF THE CITY OF
New York, as.Trustee, Centra Hanover Bank AND
‘Trust Company, as Trustée, and .¢ J. Moss Tie Com: \
PANY, . *

x % ; . Respondenés.

>

Ox Writ or Certiorari To THE Unitep States Circurt Court
or APPEALS FOR THE Eight Circuit.

BRIEF FOR RESPONDENT THE CHASE
‘NATIONAL BANK OF THE CITY OF
NEW YORK “AS TRUSTEE.

__

ya ‘ARTHUR A. GAMMELL, . .
7 15 Broad Street,
' : “2 New York, N.-Y., |
cs, ; . Counsel for Respondent The Chase
. National Bank of the City of -

“> New York as Trustee.

v

: | CHARL ES NAGEL,
* ALLEN ©. ORRICK 255, :
ARTHUR B. SHEPLEY, Jr. of F

& 319 North Fourth Street,
‘ ‘At. Louis, Mo., ; :

Of Connsel. |
November 27, 1939. - . 4 . a sitog:

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INDEX:

| PAGE
Opinions Below .------- PORE Paine mee FA eee ee
ke emcees,
Question Presented . ae naeiene ps topcaennanlctamaton 2
CNN 25a eyh pate mmo enenniawen oe
; Argument pilaicceae ee cateaiear pesceteceienenk woneqeeeen-o- _
"Conclusion Saas j-----p2---t----2----+7------- 6)
Appendix Cee Ok. Seem cena 9°
Crrations. :-
Cases: |

7 Matchiin r. Phoenix Land Inv. Co., 159 Minn. 132
. McDonald rv. Aetna Indemnity CQ. 91 ‘Conn, 359...

Penusy lvania Steel Co. a. New York City Ry. Co.,

229 Fed. 120 jaeeseopees PETE cai te Teneo ena te
ee v. Blair, 209 Iowa 1113 or
Statutes :

Act of August 11, -1929, Public, No. 386, 76th Con-

cccbduiceties: woman geen ennaneng —mmnnnnnlhy 4,6

_ Act ofeFebruary 13, aa 43 Stat. Na aa eae

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Texts:

Fletcher, Cyclopedia Corporations . (Perm. Ed.), Sec-
tion 7900 -

-- SY oasis ands Reap arian banal ea -———— =

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in effect be an adjudication extending the time for filing a
claim based upon the amendment of August 11, 1939. Such
an adjudication by this Court,.as,an aypellate court in. this
certiorari proceeding, would amount to an exercise of dis
eretion by a tribunal lacking thetssential information with-
out which the discretion ¢: innot he justly: ov wisely eéxer-

cised.

The <a ae provides that ‘‘claims for personal jnjurié: .

to emplovees of a railroad corporation * .* * shall be

prete
poration as operating expenses of such Tailroad.”’

.

The. statute, does not provide that the time for filing.

ane hy claims shall be extended. +
Suppose that on August 12, 1939, a railroad’ receiver-
ship had been almost terminated ; suppose ‘the sale of. the
assets to’ a new .corporation had been made; suppose the
reorganization. plan had Deen agreed upon by the parties
in’ mterest and approved by the court ; and, suppose the
court was about to corifirm the sale and the new securities
were about. to bg issued under the plan. The statute of
August 11, 1939, contains no kanguage, it iS submitted, .re-
quiring that the time ‘for filing: priority elaims for per:

sonal injuries to employees of the railread be extended .

and that the receivership. he continued and the sale stayed
and the reorganization de ferred until the filing and adjudi-
cation of stich claims. No Feason sus gests itself for bel ev-

ng that any such dhetvactive and chi otic effect | Was 1

te ‘nde d hy the statute.

ed and paid out of the assets of such railroad cor

a ea GaR AER

te ae

Concededly the statute does not provide that claims
barred by the statute of limitations shall nevertheless be
preferred and paid. The statute deals with the priority
to be accorded to certain claims, and does not deal with the
question Ww hether such claims may or may not in particular |
‘instances bes barred) by the statute of lim ifations or by other

~ppplicable limitations on the time for filing claims.

The. orderly process of administration of .a receivership
estate requires a reasonable determination: of the time and~
_mannér of filing and adjudicating claims. . Me 0 omega

By the order dated April 7 7, 1932, the time for filing
claims was limited to July 1, 1939 (R. 23-25). ai

_ The first question is w hether the time for filing priority

claims for personal injuries based on the statute as amended . 4

may now he extended. Vatil this question is answered, the.

question of the priority of the petitioner’s claim under the
ditute is not in issue. If the question as to extending the

time is, ultimately decided in the negative, therecwill he no

occasion at all. for paeslas on the particular priority

question. .

4

Only the District Court is in a position to deter mine
the question as to extending the time. .

Particularly in the case of a complex equity railroad
receivership like that of the Wabash ‘Railway Company,
the pea J can reasonably be made only in the light
of the ‘status of the receivership proceeding and the pros-
pects of reorganization. and the rights of the other parties
in interest ; only the receivership court possesses the essen-
Atal infermation as to these considerations.

That the receivership gourt alone is adequately in-
formed with respect to the complicated considerations in-
volved in the question whether the time for filing claims

_ should he extended, is illustrated by- the rule that-the dis-

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erdtion of the receivership court in the determination. of

that, question is a broad diséretion reviewable ‘only for :

abuse: Pennsylrania Steel Co. v. New York City Ry. Coz

— 229 Fed. 120 (C. C. A, 2nd Cire., "1915) ; McDonald v. Aetna °

Indemnity Co., 91 Conn. 399 (1917); Spooner v. Blair, 209
-lowa 1113 (1930) ; Matchan v. Phoenix Land Inv. Co., 139

© Minn, 132 (1924) ; and Fletcher, Cyclopedia Corporations —

~ (Perm. Ed.); Section 7900.

~ Accordingly, this respondent submits that, unless and
unti, the District Court upon proper application has

passed upon the question ‘as to extending the time for fil-

ing the petitioner’s claim under the statute, the question

eof the priority of the ‘claim is not properly before this

* Court. , |

The petition. in this case did not ask the District Court
to extend the. time to file. priority claims based upon. the
amendment of August 11, 1939.

It-may well be that the enactment of the amendment of

~ August 11, 1939, constitutes a reason why the petitioner
may properly ask the District Court to pass upon the ques-.

tion of the propriety of such an.extension of time, but
‘the petitioner as not asked the District Court to do so.

‘This certiorari proceeding does not have the effect of |

bringing this question: before the District C ourt; the rea-
‘sons aré set forth above why the District Court, and not

the Supreme Court as an appellate tribunal, is believed to.

be the appropriate court to pass upon the question. Ac-
cordingly, the record in this ¢értiorari proceeding shows
no reversible error. ;

| Conclusion.

Wherefore, this respondent respectfully submits. thet
the decision of the District Court of the United States for

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he Eastern Division of the Eastern. Distri¢t of Missouri
hould be affirnied. :

ArtTHUR A. GAMMELL,
; -15 Broad Street,
, New York, N. Y.,
“Counsel. for Respondent The

hos | Chase National Bank of the *

P City of New York gs Trustee. «

“HARLES NAGEL,
tLLEN C. Orrick,
AXetHtr B. SHepiey, JR.,
319 North Fourth me,
St. Louis, Mo.,

Of Counsel.

Vovember 27, 1939. Jee Bre “

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Agger.

_ The Act of Congress acumen August 11, 1939:

“£Public—No. 386—76th Congress]
[Chapter 689—1st Session]
ae [S. 2654] ;

AN ACT Pee,

“To amend’ stibsection (n), section 77, of the Bankruptcy
Act, as amended, concerning ‘payment of preferréd
claims.

‘Be it. enacted. by the Senate and House of Repre-
sentatives of the United States of America in Congress.

assembled, That the first sentence of section 77, sub- —

- section (rf), of the Bankruptey Act,.as amended, be
further arhendéd to read as follows:

‘**(n) In proceedings under this section, and in

equity’ receiverships of railroad corporations now or

hereafter pending in any court of the United Statesg -

* claims for personal injuries to employees of a railroad
corporation, claims of personal representatives of de-

. ceased employees of a railroad corporation, arising

- under State or Federal laws, and claims now or here-
after payable by. sureties upon supersedeas, appeal,
attachment, or garnishment bonds, executed by sure-
ties without security, for arid ia any action brought
against such rajlroad coifphration or trustees appointed
-pursuant to this section, sail be preferred and paid
out of the assets of such railroad corporation as oper-
ating expenses of sack failroad : :

“Approved, August 11, 1939.”’ _
Section, 77 (n) of the Bankruptcy Act [11 USCA Sec-
tion 205 (n) J, ‘prior 9 the ame ndme nt of August 11, 1939:

og “In proceedings under this section, claims for per-
sonal j injuries to employ ees of-a railroad corporation,

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claims -of personal. representatives -oft;deceased em-.

. ployees of a railroad corporation, arising under State
or Federal laws, and claims on August 27, 1935 or
thereafter payable by sureties upor wperaienis ap
peal, ‘attachment, or garnishment bonds executed by
sureties without security for and in any action brought
against such-railroad corporation or’trustee appointed

- pursuant to this. section, shall be preferred against
and paid out of the assets of such railroad corporation
as operating expenses of such railroad. No judge or

— trustee pa under this title shall change the wages
- or working conditions of railroad employees except in
the manner prescribed in sections 151 to 163 of Title
45, as amended June 21, 1934, or as they may be here-
after amended. -No reorganization effected under this
title and no order of the court or Commission in con-
nection therewith shall relieve any carrier from the
obligation of. any final judgment of any Federal ot
State court rendered prior to January 1, 1929, against
such carrier or against one of its predecessors in title,
requiring the maintenance of offices, shops, and round-
houses at any place, where such judgment was ren-
dered on account of the making of a valid contract
“oF comseacts by ane carrier or one of its : predecessor
in title.”

CPY 4663

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0243%3A10. Public record. Not legal advice.