Kane v. Roxy Theatres Corporation, 279.

• Decision Date: 13 March 1933
• Docket Number: No. 279.,279.
• Citation: 63 F.2d 754
• Court: U.S. Court of Appeals — Second Circuit
• Parties: KANE v. ROXY THEATRES CORPORATION. CONTINENTAL BANK & TRUST CO. OF NEW YORK v. ROXY THEATRES CORPORATION et al. In re NEW YORK EDISON CO.

63 F.2d 754 (1933)

KANE v. ROXY THEATRES CORPORATION.

CONTINENTAL BANK & TRUST CO. OF NEW YORK v. ROXY THEATRES CORPORATION et al.

In re NEW YORK EDISON CO.

No. 279.

Circuit Court of Appeals, Second Circuit.

March 13, 1933.

Wise, Shepard & Houghton, of New York City, for appellant trustee.

Proskauer, Rose & Paskus, of New York City, for appellant receiver.

G. Baker Schroeder and Alfred L. Rose, both of New York City (Carlos L. Israels, of New York City, of counsel), for appellants.

Beardsley & Taylor, of New York City (Thomas H. Beardsley, of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

SWAN, Circuit Judge.

Upon a creditors' bill in equity Harry G. Kosch was appointed receiver of Roxy Theatre Corporation on May 18, 1932, and as such receiver operated the defendant's theaters up to and including June 30, 1932. Subsequent to his appointment, the Continental Bank & Trust Company, as successor trustee under a mortgage made by Roxy Theatre Corporation, filed a bill to foreclose the mortgage. By order entered June 28, 1932, the two suits were consolidated "without prejudice to the substantive rights of any of the parties to either constituent cause," and the receivership was extended to the foreclosure proceeding; Kosch being directed to close his books as of midnight on June 30th, and to hold all rents and profits thereafter accruing for the benefit of the foreclosure plaintiff and the bondholders secured by said mortgage. For electric current supplied to Kosch as creditors' receiver prior to June 30th, he was indebted to the New York Edison Company to the amount of nearly $5,000, and, when he applied as receiver in foreclosure for a continuation of the service, the Edison Company threatened to discontinue unless the prior bill was paid. Pursuant to a stipulation that continuation of the service should be without prejudice and that the controversy should be submitted to the District Court, the Edison Company filed its petition asking leave to shut off its service or, in the alternative, that the receiver be ordered to pay the balance due. The District Court denied the alternative prayer because the receiver had no funds resulting from his operations prior to June 30th, although he did have funds obtained subsequent to that date by the issuance of receiver's certificates; but it authorized the Edison Company to discontinue service after ten days unless in the meantime the receiver should pay its bill. From the latter part of this order the receiver and the mortgage trustee have appealed.

Upon the argument some doubt was expressed from the bench concerning the jurisdiction of the District Court to make the order appealed from. Further consideration has allayed it. In so far as the Edison Company prayed that the receiver be ordered to pay its bill, jurisdiction is clear. In so far as it prayed leave to shut off and discontinue its service, we understand that it was asking permission to enter upon the premises, disconnect the service wires, and remove the meters and other appliances belonging to it — all of which by the terms of its contract with the receiver it had reserved the right to do in case its bills remained unpaid. Such an entry would be an interference with the receiver's possession, and hence jurisdiction of the court in respect to this part of the petition is equally clear.

The merits of the controversy turn upon the proper interpretation of sections 12 and 15 of the N. Y. Transportation Corporations Law (Consol. Laws, c. 63). Section 12 provides that an electric corporation must supply electricity upon the written application of "the owner or occupant" of a building, "and payment by him of all money due from him to the corporation, * * * notwithstanding there be rent or compensation in arrears * * * for electricity supplied * * * to a former occupant thereof." Section 15 provides that "if any person supplied with * * * electric light by any such corporation shall neglect or refuse to pay the rent or remuneration due for the same, * * * such corporation may discontinue the supply of * * * electric light to the premises of such person." The dispute is whether the extension of the receivership to the foreclosure suit created a change in the "occupant" of the...