General Finance Corporation v. New York State Rys.
| Decision Date | 04 January 1932 |
| Docket Number | No. 57.,57. |
| Citation | 54 F.2d 1008 |
| Parties | GENERAL FINANCE CORPORATION v. NEW YORK STATE RYS. SECURITY TRUST CO. OF ROCHESTER v. NEW YORK STATE RYS. et al. |
| Court | U.S. Court of Appeals — Second Circuit |
Hiscock, Williams & Cowie, of Syracuse, N. Y. (Frank H. Hiscock, of Syracuse, N. Y., of counsel), for New York Central R. Co.
Willis H. Michell, of Syracuse, N. Y. (Charles E. Spencer, of Syracuse, N. Y., of counsel), for receivers of New York State Railways.
Before MANTON, L. HAND, and CHASE, Circuit Judges.
The appellees were appointed receivers of the New York State Railways on December 30, 1929, in a creditors' equity suit. The railroad company's properties were subject to certain mortgages. On April 1, 1930, suit was instituted to foreclose one of the mortgages. That suit was consolidated with the creditors' suit, and the appointment of appellees was extended to the consolidated suit. The receivership included all the assets and properties of the New York State Railways, subject to the lien of the mortgage. The Oneida Railway Company owned and operated a street railway system in the city of Oneida, N. Y., and it was merged with the New York State Railways. On December 31, 1908, the Oneida Railway Company entered into an agreement with the New York Central & Hudson River Railroad Company for the right to use its tracks of the West Shore Division between Utica and Syracuse for a period until July 1, 1942. It was but a traffic agreement, and provided for the joint use of the two main tracks. Under date of December 17, 1928, the New York Central Railroad Company, as successor of the New York Central & Hudson River Railroad Company, entered an agreement with the New York State Railways modifying the December 31, 1908, agreement, providing for an option to terminate the agreement on six months' notice upon condition that the Railways should establish a bus line between Utica and Syracuse, in the following language:
"If the Oneida Company shall at any time desire to discontinue its use of the West Shore railroad between Utica and Syracuse as herein provided for and to establish a bus line between the said places, it may do so upon giving six months' prior written notice to the Central Company of such intention after the receipt of necessary authority for the establishment of such bus line from the required governmental authorities, and in the event upon the expiration of said six months period the grant of trackage rights from the Central Company to the Oneida Company contained in this agreement shall forthwith terminate and end, and the parties hereto shall thereupon be released from all obligations arising under this agreement subsequent to the date of such termination."
After the creditors' bill was filed, the receivers, by order of the court, were given extensions of time to affirm or disaffirm contracts. These extensions carried until March 2, 1931. On November 6, 1930, the receivers made their report, requested instructions from the court, and recommended that they be authorized to disavow the agreement of the New York Central Railroad Company with the modification above referred to. This report showed a loss for operation and inability to make sufficient to pay the rental. It showed that the installation of a bus line between Utica and Syracuse would involve the expenditure of $225,000, and that it did not have this amount to invest. The New York Central Railroad Company appeared, filed its answer and participated in the hearings. The court entered an order directing a disaffirmance of the agreement.
The argument of appellant is that the use of the railroad beyond the six months' period was an affirmance of the contract, and that, in any event, it should not be permitted to discontinue without the payment of at least six months' rent. It is further agreed that it could not abandon the use of the tracks without consent of the Public Service Commission.
The receivers of property, appointed in an equity suit, are not bound to adopt the contracts of the corporation or to accept the losses if, in their opinion, it would be unprofitable and undesirable to continue beyond a period to ascertain the wisdom of adoption or repudiation of the contracts. United States Trust Co. v. Wabash Ry. Co., 150 U. S. 287, 14 S. Ct. 86, 37 L. Ed. 1085; Quincy, M....
To continue reading
Request your trial
-
Grange v. Chicago & E. I. Ry. Co.
... ... denied 282 U.S. 903; Reed v. Director General, 258 ... U.S. 92; Shaw v. Railroad Co., 314 ... for the state courts to exercise a superintending control ... ...
-
In re Chicago Rapid Transit Co.
...v. New York Rys., D.C.S.D.N.Y., 282 F. 293; North Kansas City Bridge & R. R. Co. v. Leness, 8 Cir., 82 F.2d 9; General Finance Corp. v. New York S. Rys., 2 Cir., 54 F.2d 1008; Westinghouse Elec. & Mfg. Co. v. Brooklyn Rapid Transit Co., 2 Cir., 6 F.2d 547. The right of receivers or trustees......
-
In re Penn Central Transportation Company, 70-347.
...were modified, either by this Court upon reconsideration, or by an appellate court. Fidelity cites General Finance Corp. v. New York State Railways, 54 F.2d 1008 (2d Cir. 1932), for the proposition that such extensions do not insulate the Trustees from the consequences of unreasonable delay......
-
Texas Co. v. Chicago & AR Co.
...Co. v. New York Railways Co., 2 Cir., 282 F. 523; Dayton Hydraulic Co. v. Felsenthall, 6 Cir., 116 F. 961; General Finance Corporation v. New York State Railways, 2 Cir., 54 F.2d 1008; North Kansas City Bridge & R. Co. v. Leness, 8 Cir., 82 F 2d 9, and analogous cases. These cases recognize......