In re Slenderella Systems of Berkeley, Inc.

190 F. Supp. 886, 1960 U.S. Dist. LEXIS 3764

• Court: District Court, S.D. New York
• Decided: February 29, 1960
• Status: Published

Opinion

BICKS, District Judge.

Each of the eleven corporate debtors named in the title, supra, organized under the laws of California and engaged in business in that State, filed petitions in this District for arrangement under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. §§ 701-799. The Pacific Telephone and Telegraph Company (hereinafter the “Telephone Company”), is a public utility company organized under the laws of the State of California. It conducts its business in the State of California and, as required by local law, carries on its business in consonance with the tariffs, rules and regulations on file with the State Public Utilities Commission. Prior to the filing of the petitions for arrangement, each of the petitioners had contracted for business telephone service. The aforementioned tariffs, rules and regulations were terms of said several contracts. Hischemoeller v. National Ice & Cold Storage Co., 1956, 46 Cal.2d 318, 294 P.2d 433. At the time of the filing of the petitions for arrangement there were outstanding unpaid charges for services and facilities furnished under each of the contracts.

The petitioners were continued as debtors-in-possession. There was offered to each of them the choice of one of the three alternatives authorized by the tariffs:

(1) Discontinuance of all telephone service;

(2) Discontinuance of existing telephone service under the old assigned telephone numbers and, on proper application, assignment of new telephone numbers to be debtors-in-possession as new subscribers;

(3) Supersedure of existing service under the same telephone numbers under arrangements acceptable to the Telephone Company for payment of the outstanding charges.

Four of the debtors-in-possession chose the first alternative. The others elected to avail themselves of the second alternative. New telephone numbers were assigned to them and regular business telephone service was made available. They thereafter applied to the Referee in Bankruptcy for an order either restraining the Telephone Company from changing the telephone numbers at the places of business operated by the debtors-in-possession, or in the alternative, directing the Telephone Company to furnish the new numbers to persons calling the old numbers, a service characterized as “referral service”. The numbers assigned to the Debtors having been already changed, the Referee granted the alternative relief .

The principal issue posed by the petition to review sub judice goes to jurisdiction which in turn depends, at least insofar as summary jurisdiction is concerned, on whether the debtors had a property right in the old telephone numbers. The Referee held that the debtors .had such a property right within the meaning and intent of sections 23 and :311 of the Bankruptcy Act, 11 U.S.C.A. §§ 46, 711, and that such right vested the Bankruptcy Court with summary juris-

■ diction.

The express provisions of the -tariffs clearly foreclose the finding of a property right in the telephone numbers. In unambiguous language they provide in part that:

“The assignment of a number to a subscriber’s telephone service will be made at the discretion of the Company. The subscriber has no proprietary right in the number * * * »_

'The understandable purpose of the Referee to facilitate reorganization of the debtors does not warrant modification of tariffs promulgated with the authority ■ of the appropriate administrative agency nor construing them contrary to their .clear meaning; neither can such a desire support summary jurisdiction otherwise absent. In re Adolf Gobel, Inc., 2 Cir., 80 F.2d 849, 853.

In view of the finding of lack of summary jurisdiction, it is not necessary to consider the contention of the Telephone Company, that in no event could it be required in this proceeding to make available to the debtors a service not provided for in any of its tariffs.

The petition to review is sustained. So ordered.