In re Houlihan

263 F. 255, 1920 U.S. Dist. LEXIS 1259

Opinion

RAY, District Judge.

I do not think this application should be granted. The receiver is without funds to defend such action, and •the railway company itself is without funds to pay judgments against it, should one be obtained. This claimant, the petitioner, can file her claim with the special master and proceed in the usual way, but to grant applications of this character permitting suits would involve the receiver in the defense of a large number of claims and demands of a similar nature, which are claimed to have arisen prior to the institution of the receivership.

Experience has shown and demonstrates that this railroad is being run by the receiver at a loss. All the revenues are required to meet the daily expenses of operating the road. Application was made to the Public Service Commission for leave to increase the rates of fare charged from five cents to six cents, so as to provide funds for increasing wages of employes and meeting running expenses; but a judge of the Supreme Court of the state granted a writ of prohibition, prohibiting the Public Service Commission from granting such an increase, and the result is that both the receiver and the railway company are tied down in such a manner that the action proposed and other similar actions could not be properly defended.

The application to institute and prosecute the action is therefore denied, and there will be an order accordingly.