Hume v. City of New York

• Decision Date: 11 December 1918
• Docket Number: 105.
• Citation: 255 F. 488
• Parties: HUME v. CITY OF NEW YORK.
• Court: U.S. Court of Appeals — Second Circuit

255 F. 488

HUME v. CITY OF NEW YORK.

No. 105.

United States Court of Appeals, Second Circuit.

December 11, 1918

The defendant interposed a demurrer to the plaintiff's complaint, the demurrer was sustained, and the plaintiff appeals.

On the 30th day of December, 1910, a bill in equity was filed against the South Shore Traction Company, alleging insolvency. Thereafter Paul T. Brady and Willard V. King were appointed receivers by the District Court for the Eastern District of New York. The order recites:

'(1) That until further order Paul T. Brady and Willard V. King be and they hereby are appointed receivers for this court of the defendant corporation, and of all its real and personal property, all its assets and choses or things in action, including all moneys and book accounts, contracts of all kinds, debts due or to become due, bills receivable bonds, stocks, mortgages, securities, deeds, leases, all interest in lands, both legal and equitable, muniments of title, rents, profits, incomes, of every kind and description, plants, works, machinery, and all other beneficial interests and valuable things held, owned, or possessed by the defendant, or to which it had the rights of possession, of every kind, description, and nature wherever the same may now be, with all the rights and powers of receivers in such or like cases.'

The order contained further provisions, among which were that the receivers carry on the business of the corporation, preserve and advantageously convert into money the property assets and effects of the corporation, collect any debt or demand appear in and defend any and all suits at law or in equity then pending against the corporation, or do any and all lawful acts and things usual in the premises 'which in their judgment shall be best calculated to enable them to collect and preserve the property and assets of the corporation.'

The receivers thus named continued in possession, sold the railroad, and transferred the property and good will, including the franchise rights, with the consent of the city of New York, to another traction company. After accounting, they were discharged, and the present receiver was appointed by an order of the District Court on the 21st of December, 1914. This latter order provided, among other things, as follows:

'Ordered, that Arthur C. Hume * * * be and he hereby is appointed receiver of the South Shore Traction Company in the place and stead of said Paul T. Brady and Willard V. King, and is hereby given all the powers and rights heretofore vested in said Paul T. Brady and Willard V. King as such receivers, and all the conditions and provisions of the original order appointing said Paul T. Brady and Willard V. King as such receivers are hereby made applicable in connection with the appointment of the receiver now substituted in place of said former receivers,' etc.

With the power thus conferred, the plaintiff has instituted this action against the city of New York seeking to recover $1,750,000, in a complaint which alleges three separate causes of action which, in substance, allege that the traction company sustained damage because of delays and interferences on the part of the city, which were caused by reason of actions and conduct on the part of the city in carrying out its contract obligations arising through the franchises obtained by the traction company. The defendant appeared generally and signed various stipulations by which it obtained extensions of time to plead to the complaint. Later a demurrer was interposed, which the court sustained.

Arthur Carter Hume, of New York City, in pro. per.

William P. Burr, Corp. Counsel, of New York City (John P. O'Brien and Vincent Victory, both of New York City, of counsel), for defendant in error.

Before WARD, ROGERS, and MANTON, Circuit Judges.

MANTON Circuit Judge (after stating the facts as above).

The District Judge sustained the demurrer upon the theory that the court was without jurisdiction to pass upon the claims of the receivers against the city (a citizen of the state of New York) for a cause of action based upon a claim of damages for tort, holding also that the filing of a general appearance in the action was not such a waiver as precluded the right to object to such want of jurisdiction. The defendant challenges the right of the plaintiff to be heard in this court, contending that the sole question presented is one of jurisdiction, and that the plaintiff's relief should be sought directly from the Supreme Court. American Sugar Refining Co. v. New Orleans, 181 U.S. 277, 21 Sup.Ct. 646, 45 L.Ed. 859. But here the plaintiff does not present solely the question of jurisdiction, and in view of the questions presented by the assignment of errors 1 and 2 this court can and will entertain jurisdiction upon this appeal.

For instance, the plaintiff presents as a first question the right of the court below to resettle the decree over his objection and makes that the subject of his first assignment of error. In Coler v. Grainger Co. et al., 74 F. 16, 20 C.C.A. 267, on the motion to dismiss an appeal in the Sixth Circuit, Taft, J., said: 'The motion to dismiss the appeal, however, cannot be sustained in the case at bar, because the record does present questions other than that of the jurisdiction of the Circuit Court.'

And in Cobb v. Sertic, 218 F. 320, 134 C.C.A. 116, a similar question was presented, and the court there said:

'The only question argued in this case, either orally or in the briefs, is one of jurisdiction of the court below; but the proceeding in this court is prosecuted upon assignments of error which embrace a number of questions concerning the merits of the cause. It follows that the case is rightly here, and that this court may pass upon the question argued.'

By the order of appointment the present receiver is the successor of Messrs. Brady and King, who had very general powers conferred upon them, with the view of obtaining, by taking possession collecting, compromising, or suing for, all of the assets of the traction company. When this plaintiff was appointed receiver, he was not restricted, and, indeed, had conferred upon him the same powers as did Brady and King. The right to institute and maintain ancillary suits in the District Court in which the action was originally instituted, in aid of the objects of the receivership, is well settled. The original equity action resulting in the appointment of the receivers was between a citizen of New Jersey and a...