John v. Waco, Beaumont, Trinity & Sabine Ry. Co.

SIBLEY, Circuit Judge

(dissenting).

The District Judge found that a reorganization was hopeless, and for that reason alone dismissed the petition as not filed in good faith. He relied on decisions in reorganization proceedings involving ordinary corporations, not railroad companies. The judge is the judge of proper reorganization in the former cases: The Interstate Commerce Commission has the final decision in the case of a railroad company within its jurisdiction. The Commission was duly served here but has not appeared. It has the right to propose a plan, but not till the petition has been approved. The judge here has delayed for five months acting on the approval. Nevertheless the pe*422titioning creditor has proposed a tentative plan. The railroad company has approved the plan, and filed an answer adopting the petition and joined in its prayers. The receiver has done the same thing. Everyone thinks the case should proceed except the judge. His objection is that cash will he required, and he does not see where it is coming from. I do not think that is his responsibility on a question of good faith in filing the petition. If the Interstate Commerce Commission can approve some plan as sound and acceptable to it, may not the community served by the railroad subscribe the necessary money? Railroads are often built that way.

The public, as well as stockholders and creditors, are interested in preserving the existence of an interstate carrier, and the Commission is the representative of the public, and has peculiar competence in a matter of reorganization. Here we have a railroad company which admittedly cannot carry on in its present circumstances. It and its creditors and its receiver all wish to get it reorganized and express hope that it can be done. The Commission has not been heard from, or really been afforded an opportunity to be heard, since the case was not really in court. I see no want of good faith in this effort to reorganize. The court should have afforded the opportunity.