St. Louis Southwestern Ry. Co. v. Henwood

• Decision Date: 22 October 1946
• Docket Number: No. 12882-12886.,12882-12886.
• Citation: 157 F.2d 337
• Parties: ST. LOUIS SOUTHWESTERN RY. CO. v. HENWOOD et al. SOUTHERN PAC. CO. v. SAME. DAVIS et al. v. SAME (two cases). MEYER v. SAME.
• Court: U.S. Court of Appeals — Eighth Circuit

157 F.2d 337 (1946)

ST. LOUIS SOUTHWESTERN RY. CO. v. HENWOOD et al. SOUTHERN PAC. CO. v. SAME. DAVIS et al. v. SAME (two cases). MEYER v. SAME.

Nos. 12882-12886.

Circuit Court of Appeals, Eighth Circuit.

August 26, 1946.

As Amended on Denial of Rehearing October 22, 1946.

COPYRIGHT MATERIAL OMITTED

Jacob M. Lashly, of St. Louis, Mo., for St. Louis Southwestern Ry. Co., debtor.

Ben C. Dey, of San Francisco, Cal., and George L. Buland, of New York City (Charles L. Minor, of New York City, and Claude O. Pearcy, of St. Louis, Mo., on the brief), for Southern Pacific Co.

Edward Greensfelder, of St. Louis, Mo. (Forrest M. Hemker and Greensfelder & Hemker, all of St. Louis, Mo., on the brief), for Horace A. Davis, et al., as Protective Committees (Nos. 12884, 12885).

Walter E. Meyer, of New York City, pro se.

Paul D. Miller, of New York City (S. Mayner Wallace, of St. Louis, Mo., and Nudge, Stern, Williams & Tucker, of New York City, on the brief), for Chase Nat. Bank of City of New York.

S. Mayner Wallace, of St. Louis, Mo., for Mississippi Valley Trust Co., made statement at opening of the Court that the position of his client and of the Chase Nat. Bank of City of New York represented by Mr. Miller was identical and therefore he would make no oral argument.

Edward W. Bourne, of New York City (Andrew Oliver, of New York City, Thomas W. White and G. Carroll Stribling, both of St. Louis, Mo., Alexander & Green, of New York City, and Fordyce, White, Mayne, Williams & Hartman, of St. Louis, Mo., on the brief), for Bankers Trust Company, Trustee of St. Louis Southwestern Ry. Co. Second Mortgage dated February 12, 1891, and other Mortgages, etc.

Alfred H. Phillips, of New York City (Allen C. Orrick, of St. Louis, Mo., Chadbourne, Hunt, Jaeckel & Brown, of New York City, and Nagel, Kirby, Orrick & Shepley, of St. Louis, Mo., were with him on the brief) for Chemical Bank & Trust Company, Successor Trustee under the General and Refunding Mortgage of the Debtor, dated July 1, 1930.

Henry S. Caulfield, of St. Louis, Mo. (Clarence M. Barksdale, of St. Louis, Mo., and James Piper, of Baltimore, Md., on the brief), for Protective Committee for Holders of First Terminal and Unifying Mortgage Bonds.

Edwin S. S. Sunderland, of New York City (Guy A. Thompson, of St. Louis, Mo., Thomas O'G. FitzGibbon and Davis, Polk Wardwell, Sunderland & Kiendl, all of New York City, and Thompson, Mitchell, Thompson & Young, of St. Louis, Mo., on the brief), for Guaranty Trust Co. of New York, Trustee under Debtor's First Terminal and Unifying Mortgage.

Edward Dumbauld, Sp. Asst. to Atty. Gen. (Wendell Berge, Asst. Atty. Gen., Arne C. Wiprud and David O. Mathews, Sp. Assts. to Atty. Gen., James A. Tomlinson, Sp. Atty., of Columbia, S. C., and Harry C. Blanton, U. S. Atty., of Sikeston, Mo., on the brief), for the United States, amicus curiæ.

Before STONE, THOMAS, and JOHNSEN, Circuit Judges.

STONE, Circuit Judge.

These are five separate appeals from an order by the District Court for the Eastern District of Missouri approving a plan for reorganization of the St. Louis Southwestern Railway Company, Debtor. There is a consolidated record and, in addition to the parties immediately interested, the United States was heard on brief and oral argument as amicus curiæ.

Three of the appeals are in behalf of¹ or by² existing stockholders. The two other appeals are by protective committees of mortgage bonds issued by wholly owned subsidiaries of the Debtor, payment of which was guaranteed by it.³

I.

Jurisdiction.

Before examining the merit issues in any of these appeals, a matter of jurisdiction must be determined. That issue arises from the situation now to be outlined. Judge Davis had conducted these reorganization proceedings from their inception. A Plan had been approved by the Interstate Commerce Commission and, with accompanying transcript, had been transmitted to the Court. Objections to the Plan were filed and evidence introduced in court. The evidence had been closed and arguments of counsel were being made. After all counsel (except for the Debtor and for Mr. Meyer) had presented arguments in chief, Judge Davis died. Thereafter, Judge Moore took over these reorganization proceedings.

Judge Moore called a conference of all counsel to discuss the method of further proceeding in connection with the Plan. The original positions of counsel were as follows: Mr. Meyer urged that he wished and was entitled to a new trial before the court; the other counsel denied that a new trial was a matter of right but was, at most, a matter of discretion in the Court; most of these other counsel urged that the proceedings should not be reopened for additional evidence but should be taken by the Court on the existing record after full reargument by all parties; two of those counsel suggested, not very strongly, that the Court might reopen the case for evidence additional to that presented before Judge Davis. After much argument by all counsel, the Court took the view that a new trial was not a matter of right but that it was discretionary as to reopening the case.

Mr. Meyer was the only party desiring to introduce further evidence although other counsel (while opposing reopening) thought that if the case was to be reopened for Mr. Meyer, similar opportunity should be given other parties. Later, it was suggested by counsel that Judge Moore set the case for argument "and then have the advantage of the record and all the arguments in determining whether the case should be reopened for further testimony." The comment of the Court thereon was: "I assume when I hear the arguments I might know a little bit more about this matter. This is thrown in my lap without any opportunity to know very much about it." Finally, suggestions (in rough form of an order) were made: (1) That the record before Judge Davis be submitted; (2) that oral arguments be heard on a specified date; (3) that "during or at the conclusion" of such arguments the Court would "entertain" motions by any party "respecting additional testimony or otherwise pertaining to the perfection of the record on the hearing of said plan." It was emphasized by the Court that Mr. Meyer or any party could, under the last suggestion, present any motions to reopen the matter for further evidence. An order was made along the above line (April 23, 1943), including provisions that "the record on the Plan of Reorganization as certified to this Court by the Interstate Commerce Commission and on the record as heretofore made before Judge Charles B. Davis be taken as submitted to this Court as of this date" and that "during or at the conclusion of said oral argument on May 31, 1943, the Court will entertain any motion or motions, if any be made by any party, respecting the taking of additional testimony or otherwise pertaining to the completion of the record on said Plan." From this order, Mr. Meyer took an appeal which he later dismissed. Under the above order, arguments were made and no motion was filed by any party in connection with the arguments. Later, the Court entered an order approving the Plan.

Based on the foregoing outlined situation, Mr. Meyer presents the issue that a new trial on the Plan and objections thereto was a matter of right upon the death of Judge Davis and, therefore, Judge Moore had no power to deny such to a party demanding that right.

Various parties contend here that Mr. Meyer waived his right, if any, to object to the procedure followed by Judge Moore; and that, absent such waiver, no right to new trial existed but the matter was one of discretion.

As to waiver. The parties rely upon any or all of the following: (1) Expressions of Mr. Meyer indicating acquiescence in the procedure adopted by the Court; (2) voluntary dismissal of appeal taken by him from the order of April 23, 1943; (3) participation in the arguments and filing brief at the hearing under that order.

There were expressions by Mr. Meyer during the preliminary conference before Judge Moore which, taken alone, might be construed as approaching acquiescence in the procedure adopted; yet, throughout the conference, he made clear his preference for a new trial and, after the Court had announced the lines along which an order would be made, Mr. Chubb stated "we are adhering to the position, Your Honor, that we are entitled as a matter of right to a new trial or a rehearing of this matter" and Mr. Meyer stated "I understand under the law a new trial is necessary and the Court has no power to continue this proceeding." In the light of these statements it is clear that there was no acquiescence by Mr. Meyer in advance of the entry of the order prescribing the procedure but quite to the contrary.

This opposition is further evidenced, after the entry of order, by his appeal therefrom. Whether this order was of such finality as to be appealable is, at least, doubtful but we need not resolve that matter since that appeal was later dismissed. Whether the order, when made, was appealable or not, it is clear that it could be challenged in an appeal from the order approving the Plan and it is so challenged on the present appeal. Standing alone, the dismissal of the appeal from the order is not, in this situation, enough to be a waiver of the validity of the order.

Nor is participation, by argument and brief, in the hearing under the order sufficient to constitute waiver even though Mr. Meyer did not therein reiterate his right to new trial. There is no solid ground for contending that any party or the Court has acted in the belief that Mr. Meyer, by any or all of these things, was waiving his objection to the action of the Court in entering or in acting under the order defining this method of proceeding. The facts do not support the contention of waiver.

Right to new trial. Theoretically and actually, a "Court" is a continuing and continous institution. Life & Fire Ins. Co. of New York v. Wilson's Heirs, 8 Pet. 291, 303, 8...