New York v. New York, N.H. & H. R. Co., 344 U.S. 293 (1953)

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

In a railroad reorganization under § 77 of the Bankruptcy Act, the court ordered "creditors" to file their claims by a certain date or be denied participation except for cause shown. Creditors other than mortgage trustees and those who had appeared in court were notified by publication only. A city which received no copy of the order did not file claims for its local improvement liens on specific parcels of the railroad’s real estate.

Held: a final decree providing for transfer of the railroad’s properties to a newly organized company could not validly destroy or bar enforcement of the city’s liens. Pp. 294-297.

1. The city was a "creditor" within the meaning of § 77(b) of the Bankruptcy Act. Pp. 295-296.

2. In the circumstances of this case, publication did not constitute the "reasonable notice" to the city required by § 77(c)(8). P. 296.

3. The bar order against the city cannot be sustained because of the city’s knowledge that reorganization of the railroad was taking place in the court. P. 297.

197 F.2d 428, reversed.

The District Court enjoined enforcement of a city’s liens for local improvements on specific real estate of a railroad which had since been reorganized under the Bankruptcy Act. 105 F.Supp. 413. The Court of Appeals affirmed. 197 F.2d 428. This Court granted certiorari. 344 U.S. 809. Reversed, p. 297.