Day v. Postal Tel. Co.
| Decision Date | 04 January 1887 |
| Parties | DAY v. POSTAL TEL. CO. OF BALTIMORE CITY. BUNNELL AND OTHERS v. POSTAL TEL. CO. OF BALTIMORE CITY. DAY AND OTHERS v. POSTAL TEL. CO. OF BALTIMORE CITY. |
| Court | Maryland Court of Appeals |
Three appeals in one record from circuit court, Baltimore city.
General creditors' bill against insolvent corporations.
Francis P. Stevens and Samuel Snowden, for appellant.
T W. Blakistone, Geo. Blakistone, and John H Thomas, for appellee.
On the thirtieth of May, 1885, Austin G. Day, the appellant on this appeal, filed in the circuit court for Baltimore city a general creditors' bill against the Postal Telegraph & Cable Company, and the Postal Telegraph Company of Baltimore City. Both companies have been duly incorporated,-- the former under the laws of the state of New York, and the latter under the general incorporation law of this state. As the titles indicate, these companies were incorporated as telegraph companies, with powers to construct and maintain lines of telegraph, and to do a general telegraph business. The New York company was formed several years ago, for constructing and operating telegraph lines within the United States, with its principal office in the city of New York and the Maryland company was subsequently formed in 1883, professedly for the purpose of constructing and operating telegraph lines within this state. The appellant alleges himself to be creditor of the New York company to a considerable amount; and he also alleges that said company is hopelessly insolvent, and that its affairs have been placed in the hands of receivers by a court of competent jurisdiction in New York; and in the original bill filed the appellant alleges that the telegraph property in Maryland, which was in the possession of and being operated by the New York company, such as right of way, poles, wires, etc., was in the Maryland company; and that such property had been leased by the latter company to the New York company; and that the New York company was the owner of all the instruments and material used in operating the telegraph lines, and paid all the operatives and employes, and received and applied all the revenues and profits derived from the operation of said lines. Upon these and other allegations contained in the original bill, the appellant prayed for the appointment of a receiver of the property and effects of both companies found in this state, and for an injunction to restrain the companies and their agents, and the receivers of the New York court, from interfering with the property, or receiving and disposing of the revenues and profits derived from the Maryland telegraph lines, and that the property be sold for the payment of debts.
But a few days after this bill was filed another bill was filed in the same court, by A. B. Chandler, in his character simply as receiver of the Postal Telegraph & Cable Company, (deriving his appointment and authority from the supreme court of New York,) against that company as defendant. In this bill it is charged upon the oath of the plaintiff that the defendant company, in accordance with the purpose of its organization, constructed lines of telegraph within the states of New York, Illinois, Ohio, Missouri, and the District of Columbia, and caused corporations to be organized within the states of New Jersey, Pennsylvania, Indiana, and Maryland, under the laws of those states, for the purpose of constructing and operating lines of telegraph therein; that the corporations organized under the laws of the last-named states constructed and acquired lines of telegraph in those states respectively, which lines were connected with and made part of the general telegraph system of the defendant company; that such corporations, so organized in the states named, are controlled by the defendant company, and that the stock therein is held almost entirely by the defendant company, or in its interest; that the lines of telegraph constructed by the defendant company, and those acquired or constructed by the corporations organized as stated, are operated together, and comprise the telegraph system of the defendant company. The bill then charges that this company is largely indebted, and is utterly insolvent, and that the value of its property largely depends upon its being kept together and intact, so as to be operated as an entire system under one management. It then prays that the receivership created by the appointment of the supreme court of New York be extended over the property within the jurisdiction of this state, and that an injunction be issued to restrain all persons from interfering with the property and effects of the defendant company.
A short time after this bill was filed,--that is to say, on the seventeenth of June, 1885,--and before answer was filed, the court below, by order, consolidated the cases made by the two bills to which we have referred, and directed that such cases be proceeded in as one case. It thereupon rescinded previous orders, passed upon the bills separately, and appointed the honorable George W. Dobbin, Samuel Snowden, and Samuel D. Sprigg receivers, with power and authority to take charge and possession of all the property and effects of both companies, and to collect all debts, revenue, etc.
In passing, it is proper to observe that there was error in consolidating the bill filed by the receiver with that filed by the appellant, and thus making one case of bills that sought to accomplish objects that would conflict the one with the other. Moreover, the receiver appointed by the court of New York had no extraterritorial power to institute proceedings in the courts of this state, in regard to property not subject to the jurisdiction of the court from which he received his appointment. His functions and powers, for purposes of litigation, are held to be limited to the courts of the state within which he was appointed, and the principles of comity between the states do not apply to a case like the present. Bartlett v. Wilbur, 53 Md. 485; Booth v. Clark, 17 How. 322, 338; High, Rec. § 239. Whatever exceptions may exist in certain cases to the general rule, it is clear that a case like the present does not fall within any of them; for here, to entertain the bill of the receiver, and grant the relief prayed by it, would likely, if not certainly, interfere with the exercise of the jurisdiction of the court previously invoked, in regard to the same subject-matter. The bill by the receiver, therefore, should have been dismissed; or, if not dismissed, should have been simply retained by the court to await the final determination of the rights of the parties under the prior suit instituted by the appellant, for the benefit of all the creditors of the foreign insolvent corporation.
After the order of consolidation and the appointment of receivers, as just stated, upon the coming in of the answer of the Postal Telegraph Company of Baltimore City, the court, by its order of the twenty-third of September, 1885, dissolved the injunction, and discharged the receivers as to that company, but continued the receivers as to the New York company; and they continued to hold possession of all the property that had come into their hands, as property belonging to the New York company, or which was liable for its debts. The appellant then obtained leave to amend his bill, and in the amended bill filed by him, after stating the substance of his original bill, and the proceedings thereon, he proceeds to charge that since the filing of his original bill he has discovered, and so charges, that the title to the property mentioned in the proceedings was not vested in the Postal Telegraph Company of Baltimore City, and therefore it was not leased by it to the Postal Telegraph & Cable Company, as charged by mistake in his original bill; but that said property, consisting of all the right of way, telegraph poles and wires, and all the instruments, etc., in this state, which were or had been in possession of the Postal Telegraph & Cable Company, belongs to and is the sole property of that company, and therefore subject to the possession and control of the receivers previously appointed; that the Postal Telegraph & Cable Company furnished the money to pay for all of said property, and the same was in fact paid for by it; that no part of the money was furnished by the Postal Telegraph Company of Baltimore City; and that, even if any title to any part of said property ever did vest in that company, it has no beneficial interest therein, but holds the same for the Postal Telegraph & Cable Company.
He then charges that the value of the property is about $75,000. He also charges that the Postal Telegraph & Cable Company has always had all of said property in its possession, until the appointment of the receivers, and has had the complete management and control thereof. He charges, moreover, that the Postal Telegraph Company of Baltimore City has no property of its own; but that since the insolvency of the New York company the Postal Telegraph Company of Baltimore City has attempted to reorganize, with a view of setting up a claim of ownership to the property now in the hands of the receivers. He then prays an injunction against the Maryland company to restrain it from interfering with or making claim to the property.
The Postal Telegraph Company of Baltimore City, by its answer filed on the thirteenth of October, 1885, to the amended bill, denies, by simple negation, the several allegations which we have recited from the amended bill, and then states its claim to the property thus: "That the legal title to and beneficial interest in the aforesaid property, consisting of all telegraph wires and poles, and the right of way for the same, in Maryland, and...
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