Wilson v. Kansas City Power & Light Co.
| Decision Date | 01 June 1924 |
| Citation | 300 F. 185 |
| Parties | WILSON et al. v. KANSAS CITY POWER & LIGHT CO. |
| Court | U.S. District Court — Western District of Missouri |
Jules Rosenberger, of Kansas City, Mo., for plaintiffs.
John H Lucas and Ludwick Graves, both of Kansas City, Mo., for defendant.
This suit is brought by plaintiffs to recover for alleged breach of contract entered into between receivers and defendant. The petition alleges that because of diversity of citizenship a creditors' bill was filed in this court, praying the appointment of receivers for the Railways Company, and that the plaintiffs were duly appointed thereunder to take charge of all the assets, properties, and rights of the Railways Company, with the duty and power to continue the business and operate the electric railway system and other property of that company, to exercise all such powers as might be necessary and convenient in the proper conduct of the business, to manage the properties of the company in such manner as in the judgment of said receivers would produce the most satisfactory results, consistent with the discharge of the public duties imposed upon them, to collect and receive all income from the properties, all debts due and revenue to which the Railways Company might be entitled, and to institute and prosecute all suits which might be necessary for the protection of said Railways Company or the receivership estate.
It was further alleged that, embraced in the property taken into possession and control of this court by and through plaintiffs as receivers, were and are the power plant known as the Missouri river power house and electrical energy producing and distributing facilities of the Railways Company, which were originally designed and constructed among other things, for the production and sale of electrical current for light and power purposes to the public generally in Kansas City and vicinity and to interurban electrical railway systems; that the receivers, and prior to their appointment, the Railways Company, in order to avail themselves of the surplus energy producing capacity of said power plant and facilities, and to derive necessary revenue therefrom, were engaged in the business of producing and selling, under proper contracts, such electrical energy as was not actually necessary to the operation of the street railway system of the Railways Company; that at all such times the defendant, as a public utility, was engaged in the business of selling and distributing electric light and power to the public in Kansas City, Mo., and vicinity, and during part of the time was wholly without an adequate power plant or electrical energy producing facilities, and purchased from the Railways Company, in whole or in main, the electrical energy sold by defendant to its customers; that because of inability to furnish uninterrupted service to its patrons in case of total or partial breakdown of its power plant or facilities, the defendant, to assure itself a means of obtaining from the plaintiffs a prompt supply of electrical energy in case of such breakdown, entered into negotiations with plaintiffs as to the terms upon which plaintiffs would constantly hold themselves in readiness to furnish to defendant, from said power plant in the custody of plaintiffs, the electrical energy that might be required that on May 6, 1921, at the special instance and request of defendant, plaintiffs entered into the contract in question to supply defendant such electrical energy as might become necessary; that in consideration of the premises defendant agreed to pay plaintiffs the sum of $10,000 monthly for a period of 12 months from the date of said contract that plaintiffs at all times during the term of said contract, at great cost, expense, inconvenience, and damage to said receivership estate, held and kept themselves in readiness to perform said contract, and were at all times ready, able, and willing to perform the same; that this required that plaintiffs should make changes in and adapt their plant, equipment, facilities, and labor force to the performance of said contract, and to operate their said power plant at a capacity greatly in excess of that required for their own needs in the operation of said street railway system and the fulfillment of their existing contracts with others, at heavy expense and loss to said receivership; that thereby plaintiffs were disabled and prevented from selling or using the electric energy received, held, and set aside for defendant's use, as aforesaid; that defendant has wholly failed and refused, and still fails and refuses, to make payment to plaintiffs, in whole or in part, of the sums stipulated in the contract.
Defendant moves to dismiss on the ground that both parties are residents of the county of Jackson and state of Missouri, that no federal question is involved, and that this court, as a federal court, is without jurisdiction to hear and determine the controversy. Plaintiffs have filed their petition as ancillary to that under which the receivers were appointed. It is conceded that a federal court has jurisdiction of an ancillary suit by its receiver, without regard to the citizenship of the parties or the amount involved, and that any suit by a receiver in the course of the winding up of a corporation, whether for the collection of its assets or for the defense of its property rights, is to be regarded as ancillary to the main suit, and as cognizable in the Circuit Court, regardless either of the citizenship of the parties or of the amount in controversy. The question is whether this suit falls within that class.
It is the contention of the defendant that this action does not involve the collection of an asset of the corporation in a necessary sense, because the claim sued for is that of the receivers themselves, originating after the receivership was instituted; that it does not involve a defense of the property rights of the corporation, because the property of the corporation is neither assailed nor threatened. It is insisted that this is just an ordinary action at law between citizens of the same state, and therefore does not fall within the jurisdiction of the federal court under the statutes conferring such jurisdiction. It must be conceded that the question presented is not entirely free from difficulty. The principle involved is thus stated in High on Receivers (4th Ed.) p. 87, par. 60a:
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George D. Harter Bank v. Inglis
...receiver and the bank, the ancillary jurisdiction was complete under the powers of the court to administer the estate. Wilson v. Power & Light Co. (D. C.) 300 F. 185, and authorities cited. A complement of that was the authority to determine the rights of all claimants to the fund. The case......
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Goldman v. Staten Island Nat. Bank & Trust Co.
...which is the only purpose of the creditors' bill. In the only case we have found on the point, it was so ruled. Wilson v. Kansas City P. & L. Co., 300 F. 185, D.C.Mo. Such a suit is not, indeed, summary in point of procedure, a distinction which possibly the defendant at bar had in mind in ......
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Gibson v. Vinton
...to the main suit, and is cognizable in the federal court, regardless either of citizenship or the amount in controversy. Wilson v. K. C. Light Co. (D. C.) 300 F. 185, and authorities there cited. White v. Ewing, 159 U. S. 36, 15 S. Ct. 1018, 40 L. Ed. 67; Kelley v. Gill, 245 U. S. 116, 38 S......
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Menashe v. Sutton
...which is the only purpose of the creditors' bill. In the only case we have found on the point, it was so ruled. Wilson v. Kansas City P. & L. Co., D.C.Mo., 300 F. 185." Motion denied. Settle order on * See also Revised Laws of Hawaii 1935. ...