source: Caselaw Access Project

author: Mr. Justice Goldberg

license: Public Domain

text:
    SECURITIES AND EXCHANGE COMMISSION v. AMERICAN TRAILER RENTALS CO.
    No. 35.
    Argued November 10, 1964.
    Decided January 18, 1965.

      Daniel M. Friedman argued the cause for petitioner. With him on the briefs were Solicitor General Cox, Philip A. Loomis, Jr., and David Ferber.

      Arthur W. Burke, Jr., argued the cause and filed a brief for respondent.

      Mar cien Jenckes argued the cause and filed a brief for the State Mutual Life Assurance Company of America et al., as amici curiae.

   Mr. Justice Goldberg

delivered the opinion of the Court.

The issue in this case is whether respondent’s attempted corporate rehabilitation under the Bankruptcy Act, materially affecting the rights of widespread public investor creditors, may be conducted under Chapter XI of the Bankruptcy Act, 52 Stat. 905, as amended, 11 U. S. C. § 701 et seq. (1958 ed.), or whether dismissal or, in effect, transfer to proceedings under Chapter X of that Act, 52 Stat. 883, as amended, 11 U. S. C. § 501 et seq. (1958 ed.), is required upon motion by the Securities and Exchange Commission dr any other party in interest, pursuant to § 328 of the Bankruptcy Act, 66 Stat. 432, 11 U. S. C. § 728 (1958 ed.).

I.

Respondent, American Trailer Rentals Company, was organized in 1958 to engage in the automobile-trailer rental business. The business was financed largely through the sale of trailers to investors and their simul-. taneous lease-back. From 1959 to 1961 hundreds of small investors, scattered.throughout the. entire western part of the United States,, purchased and leased back a total of 5,866 trailers, paying an aggregate price of $3,587,439 (approximately $600 per trailer). Under the usual form of lease-back agreement, the trailer owners were to receive a set 2% of their investment per month for 10 years.

The trailers sold to investors and then leased back are of the general utility type that are attached to the rear bumper of automobiles. They were placed by respondent at gasoline stations, the operators of which acted as respondent’s rental agents, without the investors ever having seen them. Respondent had about 700 such service station operators in December 1961, although the number had declined to about 500 by the time the petition for an arrangement was filed a year later.

Respondent’s further offering of these sale and leaseback arrangements to the public was halted in' 1961, when the SEC advised respondent that these sale and leaseback arrangements were investment contracts and therefore securities, which could not be sold to the public unless and until a registration statement was filed and became effective under the Securities Act of 1933, 48 Stat. 74, as amended, 15 U. S. C. § 77a et seq. (1958 ed.). Respondent ‘then filed a registration statement with the SEC pertaining to these sale and lease-back arrangements. This registration statement, however, never became effective, and proceedings were instituted by the SEC to stop distribution of respondent's proposed prospectus on the •grounds that it contained false and misleading statements. See Securities Act of 1933, § 8 (d), 48 Stat. 79, 15 U. S. C. § 77h (d) (1958 ed.). In June. 1963, respondent consented to the entry of an order stopping distribution of this prospectus. See SEC, Securities Act Release No. 4615 (1963).

After this attempt to register the sale and lease-back agreements had failed, respondent’s executive vice president and other persons organized a corporation named Capitol Leasing Corporation, which offered respondent’s investor creditors an exchange of its stock for their trailers on the basis of one share of its stock for each $2 the investor creditors had paid for the' trailers. After Capitol had acquired approximately 300 of the 5,866 trailers outstanding in exchange for its stock, the SEC suspended the exemption from registration for small offerings, upon which Capitol had relied in making this offer, on the grounds that there was reasonable cause to believe that the material used in making this offer again contained false and misleading statements.

Following this event, respondent filed a petition and a proposed plan of arrangement under Chapter XI of the. Bankruptcy Act. The petition, annexed schedules, and other documents show that respondent had never operated at a profit. For the three years ended September 30, 1961, it had an aggregate income from “gross rentals" of $395,610. In the same period, it made rental payments to investor-trailer owners of $613,021; made payments to gasoline station operators of $118,400; and incurred additional “operating expenses” of $668,698.

The $613,021 paid to trailer owners included payments' to investors whose trailers had not yet been obtained and put into the system. In order to make the necessary payments to trailer owners and station operators respondent had not only borrowed money from its officers, directors, and stockholders but also had used funds obtained for purchase of new trailers. Virtually all the trailers were purchased from an affiliate in which respondent’s officers and directors had interests. Many of these trailers proved defective in design or otherwise unsuitable for rental. About a year prior to the filing of respond-' ent’s Chapter XI proceeding, this manufacturing affiliate became' bankrupt, owing respondent approximately $200,000 for trailers that were never manufactured and. an additional amount of approximately, $150,000 for trailers that were manufactured but never delivered. These latter trailers had been mortgaged by the affiliate to a third party who took possession upon the affiliate’s bankruptcy. In addition, in June 1961, some 100 trailers, as to which respondent, although obligated by the leaseback arrangements to do so, did not have insurance coverage, were unbeatable and considered lost. Finally, certain funds received from investors for the purchase of trailers had been, at an earlier period, misappropriated by a member or members of respondent’s management. Respondent’s executive vice president, who estimated this misappropriation loss to be at least $141,000, attributed it “almost completely” to a deceased member of the original management group, but did not feel “qualified to make [the] judgment” that the two remaining members of that group, including one who owned over 15% of respondent’s common stock, could be held liable.

At the time of filing its Chapter XI petition, respondent stated its total assets as $685,608, of which $500,000 represented the stated estimated “value” of its trailer-rental system, an intangible asset. It stated in its petition that its trailer-rental system (which then consisted of arrangements with some 500 service station operator agents) “was built by [respondent] at an estimated cost of $500,000,” despite the fact that respondent’s balance sheet in 1961 showed the cost of establishing a system of 700 stations as only $33,750, and that in 1961 respondent had estimated that the cost of establishing an additional 800 rental stations would be only $56,000. The total liabilities were stated at $1,367,890, of which $710,597 was owed to trailer owners under their leasing agreements; $200,677 was owed to the investors who had paid for trailers that had never been manufactured; $71,805 was owed to trade and other general creditors; and $285,277 was owed-to respondent’s officers and directors.

Under the proposed plan of arrangement submitted by respondent the investor-trailer owners were to exchange their entire interests (their rights in the trailers as well as the amounts owed them under the rental agreements) for stock of-Capitol on the basis of one share of stock for each $2 of “remaining capital investment in the trailers,” which sum was to be determined by deducting from the original purchase price of the trailers the amount, if any, which the owners had received as rental payments. Respondent’s officers and directors, as well as trade and other general creditors, were to receive one share of stock for each $3.50 of their claims. Respondent, itself, in exchange for transferring to Capitol its trailer-rental system, was to receive 107,000 shares which it would then distribute to its stockholders. Finally, obligations to two banks, totaling $55,558, although clearly unsecured, were to be paid 'in full, presumably because the officers and directors of respondent would otherwise, have been Hable as guarantors of these obHgations.

If this plan were approved and all of the investor-trailer owners participated, a total of approximately 866,000 shares of Capitol’s stock would be issued to them, but approximately 81,500 shares would be issued directly to the officers and directors of respondent, 22,400 to. trade and other general creditors, and 107,000 to respondent itself to be distributed to its stockholders. More than 60% of respondent’s stock was held by eight men, seven of whom are officers and directors and the eighth one of the original-promoters of the venture.

The SEC then filed a motion, under § 328 of the Bankruptcy Act, to dismiss the Chapter XI proceeding or, in effect, transfer it to Chapter X on the ground that it should have been brought under Chapter X of the Bankruptcy Act and thus Chapter XI is not available. A referee in bankruptcy to whom, as a special master, the motion was referred, recommended that it be denied on the grounds that the Commission had .not made “a sufficient showing to warrant the granting of the Section 328 motion.” At his hearing on this matter, the District Judge recognized that, in light of the fact that the investor-trailer owners were widely scattered and the nature of their' individual holdings was small, the proposed plan’s issuance of approximately 15% of Capitol’s stock to respondents officers and directors would mean that they, rather than the investor-trailer owners, would have effective control over Capitol, and expressed his “disapproval” of such a result. He also expressed disapproval of preferential treatment of the banks in order to avoid the obligations of the officer and director guarantors. The District Court, however, “accepted and adopted” the referee’s findings and denied the motion without a written opinion. The Court of Appeals affirmed, holding that, “since the granting of the motion rests in the discretion of the [district] court, while we think this is a border-line case, it does not appear that the S. E. C. has shown that adequate relief is not obtainable in Chapter XI proceedings or that there has been an abuse of that discretion warranting reversal.” 325 F. 2d 47, 52. We granted certiorari, 376 U. S. 948.

II.

The background and operative procedures of Chapter X and Chapter XI and the interrelationship between them have been reviewed by this Court in SEC v. United States Realty & Improvement Co., 310 U. S. 434, and General Stores Corp. v. Shlensky, 350 U. S. 462. This background was detailed in United States Realty, supra, as follows:

Before passage, in 1934, of § 77B of the Bankruptcy Act, 48 Stat. 912, bankruptcy procedures offered no facilities for corporate rehabilitation, which, therefore, was left to equity receiverships, with their attendant paraphernalia of creditors’ and security holders’ committees, and of rival plans of reorganization,. Lack of judicial control of the conditions attending formulation of the plans, inadequate protection of widely scattered security holders, frequent adoption of plans which favored management at the expense of other interests and which afforded the corporation only temporary respite from financial collapse, so often characteristic of equity receivership reorganizations, led to the enactment of § 77B. See S. Doc. No. 65, 72d Cong., 1st Sess., 90; H. R. Rep. No. 1409, 75th Cong., 1st Sess., 2. As does the present Chapter X, § 77B permitted the adjustment of all interests in the debtor, secured creditors, unsecured creditors, and stockholders.

The day preceding the enactment of §.77B, Congress had created the Securities and Exchange Commission as a special agency charged with the function of protecting the investing public, 48 Stat. 885, as amended, 15 U. S. C. § 78d (1958 ed.). At the urging of, and based on extensive studies by the SEC, § 77B was, in 1938, revised and enacted in changed form as Chapter X. 52 Stat. 883-905. The aims of Chapter X as thus revised were to afford greater protection to creditors and stockholders by providing greater judicial control over the entire proceedings and impartial and expert administrative assistance in corporate reorganizations through appointment of a disinterested trustee and the active participation of the SEC. The trustee in a Chapter X proceeding is required to make a thorough examination and study of the debtor’s financial problems and management, Bankruptcy Act, §§ 167 (3), (5), and then transmit his independent report to the creditors, stockholders, the SEC, and others. Following this, the trustee gives notice to all creditors and stockholders to submit to him proposals for a plan of reorganization. §§167 (5), (6). The trustee then formulates a plan of reorganization which he presents to the court. If the court finds the plan worthy of consideration, it may refer it to the SEC for its opinion and must so refer it where the debtor’s liabilities exceed $3,000,000. § 172. When the proposed plan, after approval by the court, is finally submitted to the debtor’s creditors and stockholders, it is accompanied by the advisory report of the SEC, as well as the opinion of the judge who approved the plan. § 175. As to each class of creditors and stockholders whose rights are affected by the plan, the plan must receive the approval of the holders of two-thirds in amount of each class of creditors’ claims and, if the debtor has not been found to be insolvent, the holders of a majority of each class of stock. § 179. The plan becomes effective upon final confirmation by the court, based on a finding, inter alia, that “the plan is fair and equitable.” §221.

As part of the, same Act in which Chapter X was enacted Congress álso, in 1938, enacted Chapter XI. 52 Stat. 905-916. Chapter XI is a statutory variation of the common-law composition of creditors and, unlike the broader scope of Chapter X, is limited to an adjustment of unsecured debts. It was sponsored by the National Association of Credit Men and other groups of creditors’ representatives whose experience had been in representing trade creditors in small and middle-sized commercial failures. See Hearings before the House Committee on the Judiciary on H. R. 6439 (reintroduced as H. R. 8046 and enacted in 1938), 75th Cong., 1st Sess., 31, 35; 13 J. N. A. Ref. Bankr. 17 (1938). The contrast between the provisions of Chapter X, carefully designed to protect the creditor and stockholder interests involved, and the summary provisions of Chapter XI is quite marked. The formulation of the plan of arrangement, and indeed the entire Chapter XI proceeding, for all practical purposes is.in the hands of the debtor, subject only to the requisite consent of a majority in number and amount of unsecured creditors, § 362, and the ultimate finding by the court that the plan is, inter alia, “for the best interests of the creditors,” § 366. “The process of formulating an arrangement and the solicitation of consent of creditors, sacrifices to speed and economy every safeguard, in the interest of thoroughness and distinterestedness, provided in Chapter X.” United States Realty, supra, at 450-451. The debtor generally remains in possession and operates the business under court supervision, § 342. A trustee is only provided in the very limited situation where á trustee in bankruptcy has previously been appointed, § 332. There is no requirement for a receiver, but the Court “may” appoint one if it finds it to be “necessary,” § 332. The plan of arrangement is proposed by, and only by, the debtor, §§ 306 (1), 323, 357, and creditors have only the choice of accepting or rejecting it. Acceptances may be solicited by the debtor even before filing of the Chapter XI petition and, in fact, must be solicited before court review of the plan, § 336 (4). There are no provisions for an independent study by the court or a trustee, or for advice by them being given to creditors in advance of the acceptance of the arrangement. In short, Chapter XI provides a summary procedure whereby judicial confirmation is obtained on a plan that has been formulated and accepted with only a bare minimum of independent control or supervision. This, of course, is consistent with the basic purpose of Chapter XI: to provide a quick and economical means of facilitating simple compositions among general creditors who have been deemed by Congress to need only the minimal disinterested protection provided by that Chapter.

In enacting these two distinct methods of corporate rehabilitations, Congress has made it quite clear that Chapters X and XI are not alternate routes, the choice of which is in the hands of the debtor. Rather, they are legally, mutually exclusive paths to attempted financial rehabilitation. A Chapter X petition may not be filed unless “adequate relief” is not obtainable under Chapter XI, § 146 (2). Likewise, a Chapter XI petition is to be dismissed, or in effect transferred, if the proceedings “should have been brought” under Chapter X_, § 328.

III.

The SEC here contends that, as an absolute rule, all proceedings for the financial rehabilitation of a corporate debtor which would alter the rights of public investor creditors must be in Chapter X. Respondent, on the other hand, contends that there is no such absolute rule and that the determination of whether proceedings, on the facts of a particular case, should be in Chapter X or in Chapter XI rests in the discretion of the District Court, which discretion should not be reversed unless it is found to have been clearly abused. Both parties rely on United States Realty, supra, and General Stores Corp., supra, for their respective contentions.

United States Realty- involved a corporation with publicly owned debentures, publicly owned mortgage certificates, and publicly owned stock, which proposed a plan of arrangement that would have left the debentures’and stock unaffected but would have both extended the time for payment of the publicly held mortgage certificates and reduced their interest rate. The SEC there argued that Chapter X is the exclusive avenue for financial rehabilitation of large corporations with many stockholders. While rejecting this argument as an absolute matter, the Court recognized that “in general . . . the two chapters were specifically devised to afford different procedures, the one [Chapter X] adapted to the reorganization of corporations with complicated debt structures and many stockholders, the other [Chapter XI] to composition of debts of small individual business and corporations with few stockholders . . . .” 310 U. S., at 447. The Court then held that, as the proposed plan of arrangement adversely affected the rights of many, widely scattered public creditors, to wit, the holders of mortgage certificates, the formulation of a plan with the judicial control, statutory SEC participation, and employment of disinterested trustees, assured by Chapter X, would better serve “the public and private interests concerned including those of the debtor,” id., at 455, than would the formulation of a Chapter XI plan under the almost complete control of the debtor. In reaching this result, the Court explored at great length the safeguards of Chapter X and their protection of public investors:

“The basic assumption of Chapter X and other acts administered by the Commission is that the investing public dissociated from control or active participation in the management, needs impartial and expert administrative assistance in the ascertainment of facts, in theidetection of fraud, and in the understanding of complex financial problems.” Id., at 448-449, n. 6.

Applying these principles, the Court therefore reversed the Court of Appeals’ affirmance of the District Court’s refusal to dismiss a Chapter XI proceeding which the SEC had challenged on the grounds that it should have been brought under Chapter X.

It should be noted that, prior to United States Realty, a bill had been introduced in Congress to draw a numerical line that would close Chapter XI to any corporation which had any class of its securities owned by 100 or more creditors or stockholders. See Hearing before Special Subcommittee on Bankruptcy and Reorganization of the House Committee on the Judiciary on H. R. 9864, 76th Cong., 3d Sess. In reporting out. the bill, the Subcommittee stated: •

“Sections 4, 5, 6, and 7 of the bill, which are eliminated by the last of your committee’s amendments, provided for amendments to chapter XI of the Bankruptcy Act which were designed to prevent corporations which are publicly indebted or owned from filing a petition for an arrangement under, chapter XI, rather than a petition for reorganization under chapter X, the chapter specially designed for the reorganization of such corporations, .and to establish a numerical test of such 'public’ indebtedness or ownership.
“Your committee believes that, while the amendments proposed by sections 4, .5, 6, and 7 are desirable, the element of emergency requiring their immediate passage has been eliminated by the decision of the United States Supreme Court in Securities and Exchange Commission v. U. S. Realty and Improvement Company. That decision was rendered on May 27, 1940, after the introduction of the bill. Since immediate action on these proposals does not appear to be necessary, the last of your committee’s amendments provides for the striking.out of sections 4, 5, 6, and 7. The committee’s conclusion is supported by all of the'witnesses who testified at the. hearings before the committee’s Subcommittee' on Bankruptcy and Reorganization and also by the report of the Securities and Exchange Commission on the bill.” H. R. Rep. No. 2372, 76th Cong., 3d Sess., 2.

In General Stores Corp. v. Shlensky, supra, a corporation with over 2,000,000 shares of common stock, held by-over 7,000 shareholders, but with no publicly held debt of any kind, petitioned under Chapter XI for an arrangement of its unsecured debt, consisting of obligations to trade creditors and one private investor. The District Court had held, with the Court of Appeals affirming, that Chapter XI was unavailable as the debtor needed more extensive reorganization than merely a simple arrangement with unsecured creditors. This Court affirmed. In so doing, the Court again rejected the SEC’s argument that, as an absolute matter, Chapter XI is not available where the debtor is publicly owned.

The Court stated:

“It may well be that in most cases where the debtor’s securities are publicly held c. X will afford the more appropriate remedy. But that is not necessarily so. A large company with publicly held securities may have as much need for .a simple composition of unsecured debts as a smaller company. And there is no reason we can see. why c. XI may not serve that end. The essential difference is not between the small company and the large company but between the needs to be served.” 350 U. S., at 466.

The Court pointéd out that the “needs to be served” included such factors as requirements of fairness to public debt holders, need for a trustee’s evaluation of an accounting from management or determination that new management is necessary, and the need to readjust a complicated debt structure requiring more than a simple composition of unsecured debt. Id., at 466-467.

IV.

' We agree with the parties that the principles of United States Realty and General Stores apply to and govern the result in this case. We reaffirm the holdings of these cases that there is no absolute rule that Chapter X must be utilized in every case in which the corporate debtor is publicly owned. As this Court has recognized, Congress has drawn no such hard-and-fast line between the two Chapters. The SEC, purporting to bow to these holdings, urges in this case, however, a variation of its absolute-rule argument that, while not requiring Chapter X in all cases in which the debtor is publicly owned, would require the use of Chapter X in 100% of the cases involving the rights of public investor creditors.

It argues, in support of this variation of its absolute rule, that to hold otherwise would deprive the investor creditors of Chapter X’s protection of the “fair and equitable” requirement of a plan. As noted above, whereas Chapter X contains the proviso that a plan must be “fair and equitable,” Chapter XI only requires that it be “for the best interests of' the creditors.” The words “fair arid equitable” are “words of art” which mean that senior interests are entitled to full priority over junior ones and, in particular, “that in any plan of corporate reorganization unsecured creditors are entitled to priority over stockholders to the full extent of their debts and that any scaling down of the claims, of creditors without some fair compensating advantage to them which is prior to the rights of stockholders is inadmissible.” United States Realty, supra, at 452. The SEC’s argument, however, is premised on the assertion, for which we can firid no support .in either the language or legislative history of Chapters X and XI, that Congress has deemed it necessary in all cases involving public investor creditors that they have the protection of the “fair and equitable” doctrine. In fact, the requirement that a plan be “fair and equitable” was part of Chapter XI, as well as Chapter X, until 1952, when Congress deleted it from Chapter XI and replaced it with the requirement that the plan be “for the best interests of the creditors.” Congress clearly deemed this latter requirement to be sufficient protection in a proceeding properly in Chapter XI in light of the general philosophy of Chapter XI to expedite “simple” compositions. See S. Rep. No. 1395, 82d Cong., 2d Sess., 10, 11-12; H. R. Rep. No. 2320, 82d Cong., 2d Sess., 19, 20-21. There is no indication that in so doing, Congress intended in' any way to change the law on the interrelationship between Chapters X and XI. In fact, the history is just the opposite. In the same Act that deleted the “fair and equitable” requirement from Chapter XI, Congress expressly codified, in § 328, the rule of United States Realty providing for dismissal, or, in effect transfer, of a Chapter XI proceeding if it “should have been brought” in Chapter X. Nothing in this even suggests transfer as an absolute rule to give Chapter X’s “fair and equitable” protection to all cases involving public investors, which presumably if Congress had so intended, it would have so stated. Moreover, as noted above, supra, pp. 608-609, a House subcommittee previously approved the United States Realty holding of a general, but not absolute, rule, and had not reported out a bill that would have drawn an absolute line.

The SEC further argues that Chapter X is required in all cases involving public investor creditors, because its right to intervene in a Chapter XI proceeding is limited solely to moving under § 328 for a transfer to Chapter X. We reject this argument. The District Court, in this case, quite properly recognized that th¿ SEC was not so limited in a Chapter XI proceeding, and we hold that, under the statutory scheme, while not charged with express statutory rights and responsibilities as in Chapter X, the SEC is entitled to intervene and be heard in a Chapr ter XI proceeding. We therefore reject the SEC’s variation of its absolute-rule argument, advanced in this case, that would require the use of Chapter X in all cases in which the rights of public investor creditors are involved. The short answer is that, as with the SEC’s original absolute-rule argument, Congress has drawn no such absolute line of demarcation between Chapters X and XI.

This does not mean, however, that we disagree with the holding of United States Realty that, although there is no absolute rule requiring that Chapter X be utilized in every case in which the debtor is publicly owned, or even where publicly held debt is adjusted, as a general rule Chapter X is the appropriate proceeding for adjustment of publicly held debt. See SEC v. Canandaigua Enterprises Corp., 339 F. 2d 14 (C. A. 2d Cir.). Not only do we not disagree with this holding, but we expressly reaffirm it. Public investors are, as here, generally widely scattered and are far less likely than trade creditors to be aware of the financial condition and cause of the collapse of the debtor. They are less commonly organized in groups or committees capable of protecting their interests. They do not have the same interest as do trade creditors in continuing the business relations with the debtor. Where debt is publicly held, the SEC is likely, as here, to have become familiar with the debtor’s finances, indicating the desirability of its performing its full Chapter X functions. It seems clear that in enacting Chapter X Congress had the protection of public investors, and not trade creditors, primarily in mind. As noted above, Chapter X is one of many Acts in which the; SEC has the statutory right and responsibility to protect public investors. Finally, again it is clear that Congress was thinking of Chapter XI as primarily concerned with adjustment of the rights of trade creditors when it deemed the “fair and equitable” doctrine to be unnecessary to “simple” compositions in Chapter XI.

General Stores indicates the narrow limits within which there are exceptions to this general rule that the rights of public investor creditors are to be adjusted only under Chapter X. “Simple” compositions are still to be effected under Chapter XI. . Such a situation, even where public debt is directly affected may exist, for example, where the public investors are few in number and familiar with the operations of the debtor, or where, although the public investors are greater in number, the adjustment of their debt is relatively minor, consisting, for example, of a short extension of time for payment.

On the other hand, General Stores also makes it clear that even though there may be no public debt materially and directly affected, Chapter X is still, the appropriate proceeding where the débtor has widespread public stockholders and the protections of the public and private interests involved afforded by Chapter X are required because, for example,, there is evidence of management misdeeds for which an accounting might be made, there is a need for new management, or the financial condition of the debtor requires more than a simple composition of its unsecured debts.

Applying .the above principles, it is obvious that Chapter X is the appropriate proceeding for the attempted rehabilitation of respondent in this case. Here public debts are being adjusted. The investors are many and widespread, not few. in number intimately connected with the debtor, and the adjustment is quite major and certainly not minor. These facts alone would require Chapter X proceedings under the above-stated principles. In addition there is here, as we have previously pointed out, substantial evidence of misappropriation of assets, and not only is there a need for a complete corporate reorganization, but it is obvious that the proposed plan of arrangement is just that. The trailer owners are exchanging their entire interests, including a sale of their trailers, in exchange for stock in a new corporation, in which other creditors of respondent, including respondent’s officers and directors, as well as respondent itself will have substantial interests. Indeed, this is the same complete reorganization, except that the plan here gives the public investor creditors even less than was previously offered, see noté 5, supra, that the SEC previously stopped as a public offering on the grounds that the offering material contained false and misleading information. The Court of Appeals itself recognized, 325 F. 2d, at 53, “that if the stock involved here were nut part of an arrangement, the disclosures made with regard to it’ | in soliciting the trailer owners’ consents to the plan] would be clearly inadequate. No authority has been found which would indicate- that recipients of stock issued in connection with an arrangement are not entitled to as much information as are those persons acquiring stock under ordinary conditions.” We agree.

Indeed, the facts of this case aptly demonstrate the need for Chapter X protection as a general rule on the above-stated principles. There is clearly a need for a stúdy by a disinterested trustee to make a thorough examination of respondent’s .financial problems and management and submit á full report to the public-investor creditors. Respondent has never operated profitably, has always been in precarious financial condition, and apparently was hopelessly insolvent, in both the bankruptcy and equity sense, when the arrangement was proposed. At an earlier period, its management apparently misappropriated substantial corporate funds. Most of the trailers were purchased from an affiliated company; a large number of them, although paid for, were either not manufactured or, if manufactured, were not delivered. The affiliated company is bankrupt. Only approximately two-thirds of the $3,587,439 contributed by the public investors for the purchase of trailers was used for that purpose; the balance apparently having been drained off in high commissions taken by the management on the sale of the trailers to the public. Portions of these commissions on new trailer sales were, in turn, used by the management to pay prior purchasers of trailers the rentals which they had been promised.' When respondent filed its petition for an arrangement, its stated liabilities of $1,367,890 were approximately double its stated assets of $685,608;- with even most of the latter ($500,000) representing the alleged “estimated” value of the trailer-rental system, i. e., the debtor’s arrangements with the service station operators. The District Court itself recognized that “there may be in this situation need for new management, and there certainly is some question ... as to whether or not the. management that, is-presently . . . operating it, would continue tó do so for the best interests of the investors.” It did not find, however, that Chapter X was necessary since this need for new management had “not been clearly established yet.” One of the purposes of Chapter X is to give the independent trustee the opportunity to conduct a searching inquiry so as to “clearly establish” whether or not new management is necessary, when there is, as here, a substantial basis for such a belief. See General Stores, supra, at 466. Finally, it is clear that there is need for an independent investigation of possible causes of action against the past and present management of respondent, and it is as true now as when Chapter X was énacted, that “a debtor in possession cannot be expected to investigate itself.” Hearings before House Committee on the Judiciary on H. R. 6439, 75th Cong., 1st Sess., 176 (my Brother Douglas then testifying as Chairman of the SEC).

Respondent, however, contends that Chapter X is not here appropriate as the time and expense involved in such a proceeding would be too great. This is, however, just another way of stating the natural preference of a debtor’s management for the “speed and economy” of Chapter XI, to the “thoroughness and disinterestedness” of Chapter X. In this area, as with other statutes designed, to protect the investing public, Congress has made the determination that the disinterested protection of the public investor outweighs the self-interest “needs” of corporate management for so-called “speed and. economy.” In fact, experience in this area has confirmed the view of Congress that the thoroughness and disinterestedness assured by Chapter X not only result in greater protection for the investing public, but often in greater ultimate savings for all interests, public and private, than do the so-called “speed and economy” of Chapter XI. See Twenty-Eighth Annual Report of the SEC 98 (1963); Twenty-Ninth Annual Report of the SEC 90-91 (1964); Note, 69 Harv. L. Rev. 352, 357-360 (1955). Moreover, the requirements of Chapter X are themselves sufficiently flexible so that the District Court can act to keep expenses within proper bounds and insure expedition in the proceedings. We also reject respondent’s further argument that the time and expense of a Chapter X proceeding would be so great that the ultimate result might be straight bankruptcy liquidation, which, respondent contends, “would mean probable total loss for [the] trailer owners.” In addition to the above answers to respondent’s general-time-and-expense argument, we feel compelled to point out, without indicating any opinion as to the ultimate outcome of the attempted financial rehabilitation in this case, that it must be recognized that Chapters X and XI were not designed to prolong — without good reason and at the expense of the investing public — the corporate life of every debtor suffering from terminal financial ills. See Fidelity Assurance Assn. v. Sims, 318 U. S. 608.

Finally, respondent argues that the District Court’s decision that Chapter XI was the appropriate proceeding here should be affirmed on the basis that it was not a clear abuse of discretion. Respondent relies on certain language in the General Stores opinion in support of this contention. However, in making this contention it clearly misreads that opinion and misconceives its holding and import. Nothing in that opinion supports respondent’s view that the issue of whether Chapter X or Chapter XI is required permits open-ended discretion by a district court to decide on a case-by-case basis, without reliance on the principles which we have here reaffirmed, whether in its opinion it would be better for a particular debtor to be in Chapter X or Chapter XI. We agree with the statement of the Court of Appeals for the Second Circuit in a recent decision that such open-ended discretion would be bound to result in decisions reflecting the “particular experience and predilections” of the. district judge involved. SEC v. Canandaigua Enterprises Corp., supra, at 19. “The consequence,, particularly in a multijudge district, would be that the substantial rights of the parties would depend on the accident of the calendar — in défiánce of the memorable admonition, ‘It will not do to decide the same question one way between one set of litigants and the opposite way between another/ Cardozo, The Nature of the Judicial Process 33 (1921).” Ibid. We therefore also reject this contention of respondent.

Applying the above-stated principles, it is clear that in this casé the motion by the SEC to dismiss, or, in effect, to transfer the proceedings to Chapter X, should have been granted. Therefore, the judgment of the Court of Appeals is reversed and the case remanded to that court for proceedings consistent with this opinion.

Reversed and remanded.

       “The judge may, upon application of the Securities and Exchange Commission or any party in interest, and upon such notice to the debtor, to the Securities and Exchange Commission, and to such other persons as the judge may direct, if he finds that the proceedings should have been, brought under chapter 10 of this title, enter an order dismissing the proceedings under this chapter, unless, within such time as the judge shall fix, the petition be amended to comply with the requirement of chapter 10 of this title for the filing of a debtor’s petition or a creditors’ petition under such chapter, be filed. Upon the filing of such amended petition, or of such creditors’ petition, and the payment of such additional fees as may be required to comply with section 532 of this title, such amended petition or creditors’ petition shall thereafter, for all purposes of chapter 10 of this title, be deemed to have been originally filed under such chapter.”

       Respondent was originally one of a group of interrelated companies that'later merged into it; for simplicity we have considered it as one company throughout its history.

       Although the overwhelming majority of the agreements are of this type, they vary from 2% to 3% per month and from 5 to 10 years. A few provide for a flat 35% of the rental derived from the trailers involved.

       See Regulation A (17 CFR §230.251 et seq.), promulgated pursuant to the Securities Act of 1933, § 3 (a), 48 Stat. 75, 15 U-. S. C. § 77c (a). (1958 ed.).

       This is, of course, less than the exchange that Capitol had offered some months earlier -under the exemption from registration which had been suspended, since there trailer owners had been offered one share of stock for each $2 that they had paid with no deductions for so-called “return of capital.” See supra, p. 599.

       Following this hearing, the plan was then modified to provide that respondent’s officers and directors would receive one share of Capitol stock for each $5.50, instead of each $3.50, of their claims, with this stock having limited voting, dividend and liquidation rights for five years, and that the banks would be treated in the same manner as respondent’s other general creditors.

       Where the debtor’s liabilities are less than ■ the minimal sum of $250,000, a situation clearly not present here, Chapter X permits, but-does not require, the court to appoint a trustee.

       Originally Chapter XI, as well as Chapter X, required that the plan be “fair and equitable.” That requirement of Chapter XI was changed to the one stated in the text in 1952. See infra, p. 611.

       This could only occur when the Chapter XI proceeding had been filed by a debtor already in straight bankruptcy proceedings. See §321; 8 Collier, Bankruptcy, 587-588 (1964 ed.).

       This, of course, also answers respondent’s argument that Congress, by deleting the “fair and equitable” requirement from Chapter XI, has somehow overturned the holding and principles of United States Realty. See also infra, p. 614.

       This, of course, does not mean that Chapter X’s greater protection for public investor creditors in this regard, as well as protections of greater judicial control, a disinterested trustee, and full statutory SEC participation, is irrelevant in determining whether, as a general rule, Chapter X or Chapter XI would better serve the “public and private interests involved,” cf. General Stores, supra, at 466. See infra, p. 614.

       While sometimes expressing different rationales for their conclusions it is clear that the courts of appeals have recognized the general rule stated above. See SEC v. Canandaigua Enterprises Corp., supra; SEC v. Crumpton Builders, Inc., 337 F. 2d 907 (C. A. 5th Cir.); SEC v. Liberty Baking Corp., 240 F. 2d 511 (C. A. 2d Cir.); Mecca Temple v. Darrock, 142 F. 2d 869 (C. A. 2d Cir.); cf. Grayson-Robinson Stores, Inc. v. SEC, 320 F. 2d 940 (C. A. 2d Cir.); SEC v. Wilcox-Gay Corp., 231 F. 2d 859 (C. A. 6th Cir.); In re Transvision, Inc., 217 F. 2d 243 (C. A. 2d Cir.). See also In re Barchris Construction Corp., 223 F. Supp. 229 (D. C. S. D. N. Y.); In re Herold Radio & Electronics Corp., 191 F. Supp. 780 (D. C. S. D. N. Y.).

        E. g., Securities Act of 1933, 48 Stat. 74, as amended, 15 U. S. C. § 77a et seq. (1958 ed.); Securities Exchange Act of 1934, 48 Stat. 881, as amended, 15 U. S. C. § 78a et seq. (1958 ed.).

       See H. R. Rep. No. 2320, 82d Cong., 2d Sess., 21; S. Rep. No. 1395, 82d Cong., 2d Sess., 11-12. Cf. United States Realty, supra, at 454.

       See note 13, supra.’

       The court has, for example, a measure of control over the amount of work performed by the trustee, § 167, and must approve the fees of all participants in the proceedings, §§ 241-250.

       Both Chapters X and XI are designed as vehicles for possible financial rehabilitation. Chapter X explicitly requires that a petition brought under it must be dismissed if it has not been brought in “good faith.” § 141. “Good faith” is defined so as to exclude from Chapter X those cases, inter alia, where “it is unreasonable to expect that a plan of reorganization can be effected.” §146(3). Such a situation would exist where the debtor is so hopelessly insolvent that straight bankruptcy liquidation is the only available expedient. Fidelity Assurance Assn. v. Sims, supra; Goodman v. Michael, 280 F. 2d 106, 108 (C. A. 1st Cir.); 6 Collier, Bankruptcy, ¶6.09 (1964).- Chapter XI has a provision that a plan cannot be-confirmed unless it is “for the best interests of the creditors and is feasible.” § 366 (2). This provision has been construed to preclude' confirmation of a plan of arrangement where the plan would pay the creditors substantially less than they might reasonably expect to realize in liquidation. See In re Bruce Hunt Corp., 163 F. Supp. 939 (D. C. N. D. N. Y.); 9 Collier, Bankruptcy, ¶ 9.17 (1964).

       Respondent relies on language wherein, after pointing out that it “was the view of two lower courts” that the debtor there “may well need a more thoroughgoing capital readjustment than is possible under c. XI,” 350 U. S., at 468, Mr. Justice Douglas stated, for the Court: “We could reverse them only if their exercise of discretion transcended the allowable bounds. We cannot say that it does. Rather we think that the lower courts took a fair- redding of c. X and the functions it serves and reasonably concluded that this business needed' a more pervasive reorganization than is available under c. XI.” Ibid. It is clear in the context of that case that the discretionary issue there referred to was not discretion to determine the rules governing the issue of whether Chapter X or Chapter XI is appropriate, or whether these rules should be applied in all cases, but rather merely the factual question of whether or not that particular debtor needed a more pervasive reorganization than a simple composition under Chapter XI.

       Respondent’s further argument that Chapter XI still is appropriate since the plan, despite its clear terms, does not adversely affect the-trailer owners because each of them can remove his trailer at will is also without merit. ' First, as noted above, Chapter X would be required here even if there were no investor-creditors. Second, the argument that the plan is voluntary ignores the fact that the investors were not purchasing trailers but were investing in the corporation. Finally, some trailers were never manufactured, others are missing, and the remainder are scattered at gasoline stations throughout the western part of the United States. It cannot, seriously be contended that this right to find a trailer that was not intended to be purchased makes the plan a completely voluntary one.

       In so holding, we indicate no opinion as to whether or not a Chapter X reorganization would be appropriate' in this ease. See note 17, supra. We merely hold that all issues relevant to the possible financial rehabilitation of respondent must here be determined within the confines of a Chapter X, rather than a Chapter XI, proceeding. See United States Realty, supra, at 453; 9 Collier, supra, at ¶ 9.17.


author:
Per Curiam.
      Me. Justice Clark, Mr. Justice Harlan, Mr. Justice Goldberg,

text:
    FORTSON, SECRETARY OF STATE OF GEORGIA, et al. v. TOOMBS et al.
    No. 300.
    Argued November 18-19, 1964.
    Decided January 18, 1965.

      E. Freeman Leverett, Deputy Assistant Attorney General of Georgia, argued the cause for appellants. With him on the brief was Eugene Cook, Attorney General of Georgia.

      Francis Shackelford argued the cause for appellees. With him on the brief were Emmet J. Bondurant II, J. Quentin Davidson, Edward S. White and Hamilton Lokey.

   Per Curiam.

The District Court, having held that the Georgia Legislature was malapportioned (Toombs v. Fortson, 205 F. Supp. 248), enjoined appellants, election officials, “from placing on the ballot to be used in the General Election to be held on November 3, 1964, pr at any subsequent election until the General Assembly is reapportioned in accordance with constitutional standards, the question whether a constitutional amendment purporting to amend the present state constitution by substituting an entirely new constitution therefor shall be adopted.” Appellants challenge that provision on the merits. Appellees, while defending it on the merits, suggest alternatively that the issue has become moot.

The situation has changed somewhat since the 1964 election, as both the Senate and the House have new members, and appellees, for whose benefit the challenged provision was added, say it is now highly speculative as to what the 1965 legislature will do and suggest the paragraph in question be vacated as moot.

We vacate this part of the decree and remand to the District Court, to whom we give a wide range in mould-ing a decree (United States v. Crescent Amusement Co., 323 U. S. 173, 185; International Boxing Club v. United States, 358 U. S. 242, 253), for reconsideration of the desirability and need for the on-going injunction in light of the results of the 1964 election and the representations of appellees.

It is so ordered.

Me. Justice Clark,

concurring.

Although I would prefer to declare this litigation moot and vacate the judgment below, I am joining the opinion and judgment of the Court solely on the basis that it is not reaching the merits regarding the propriety of the order fashioned by the three-judge District Court. In my view, the Court is simply vacating and remanding in order to give the District Court an opportunity to reconsider its order in light of the change in circumstances which has occurred since judgment was entered.

Mr. Justice Harlan,

with whom Mr. Justice Stewart joins,

concurring in part and dissenting in part.

This is the first time that the Court, after plenary briefing and argument, has been called on to consider the propriety of interim arrangements prescribed by a district court pending the effectuation of its decision requiring reapportionment of a branch of a state legislature.

After holding that the House of Representatives of the General Assembly of Georgia was unconstitutionally composed, a decision which is not called into question on this appeal, the three-judge District Court ordered: (1) that the election in 1964 of the legislature to serve in 1965 (the 1965 legislature) might proceed under the State’s existing methods of apportionment; (2) that until a properly apportioned legislature took office no other legislature could propose to the electorate, except through the calling of a convention of popularly elected delegates, the adoption of a new state constitution; and (3) that (except for reapportionment legislation) the 1965 House should be “limited,” notwithstanding any provision of state law, “to the enactment of such legislation as shall properly come before the said Legislature during the regular 1965 45-day session” provided by Georgia law. After the State’s appeal was filed in this Court this last provision was in effect abrogated by the District Court with the approval of the parties.

This appeal draws in question the validity of items (2) and (3) above, similarly numbered in the District Court's order. It is contended by the appellees, however, that both these issues have now become moot.

I.

The Court’s disposition of this case, of course, involves a holding that at least as to item (2) the case is not moot. For, contrary to what my Brother Goldberg says in his dissenting opinion (post, pp. 636-638) and as my Brother Clark seems to recognize (ante), the Court does not remand the case to the District Court for a determination on the issue of mootness, but only to decide whether any injunctive relief is now appropriate in light of what has transpired since such relief was first granted.

While it may be'that the Court’s implicit holding on mootness does not reach beyond the portion of the District Court’s decree that goes to the submission of a proposed new state constitution (par. (2) of the decree), I would also hold not moot the pronouncement of that decree placing limitations on the functioning of the 1965 State Legislature (original par. (3) of the decree).

As to paragraph (2), it is sufficient to say that the injunction has continuing effect, not only with respect to the 1965 legislature, but also as to any successor legislature if it is found to be “malapportioned.” Any alleged “speculativeness” as to whether a new state constitution may be proposed to the electorate before a “constitutional” legislature comes into being, goes not to mootness but only to the question whether the District Court (assuming its power in the premises, see below) should have granted any relief on this score. So far as original paragraph (3) of the decree is concerned (limiting the activities of the 1965 legislature) it was not rendered moot by the District Court’s modification after the case had been taken for review by this Court. Analytically, the situation is tantamount to a confession of error at this level, at most relieving this Court of the necessity of making a definitive exposition of its views on this subject (compare the suggestion of my Brother Goldberg, post, pp. 638-639 )j but not depriving the question of the attribute of justiciability; Cf. Young v. United States, 315 U. S. 257, 258-259.

The position adopted by the Court is that although the case is not moot, at least as to the “constitution-submission” issue, decision of that question could be avoided if the District Court ehosé to vacate that part of its injunction in light of the change in circumstance which has made the need for such relief speculative; the Court therefore remands the case to afford the District Court that opportunity. I do not think that such avoidance as to either question is called for in this case. The Court’s reapportionment decisions have pressed district courts onto an uncharted and highly sensitive field of federal-state relations with little more to guide them than the elusive “one-person-one-vote” aphorism. District courts, as courts of first instance, must necessarily fashion remedies for themselves, and the passage of time and the variety of remedies chosen by them may ultimately help this Court to wend its way through this treacherous constitutional terrain. But it is essential that the lower courts at least be launched in the right general direction and not allowed to range so far afield as to hamstring state legislatures and deprive States of effective legislative government. Paragraphs (2) and (3) of the injunction involved in this case do range that far afield. Absent disapproval by this Court, the decision below, rendered by a distinguished panel, cannot fail to furnish a strong practical, if not legal, precedent for other district courts. I do not think this should be allowed to happen.

II.

I would hold the decree below improvident in both the aspects before us.

As to‘the provision forbidding submission to the electorate of á legislatively proposed new state constitution, I can find nothing in the Fourteenth Amendment, elsewhere in the Constitution, or in any decision of this Court which requires a State to initiate complete or partial constitutional change only by some method in which every voice in the voting population is given an opportunity to express itself. Can there be the slightest constitutional doubt that a State may lodge the power to initiate constitutional changes in any select body it pleases, such as a committee of the legislature, a group of constitutional lawyers, or even a “malapportioned” legislature — particularly one whose composition was considered, prior to this Court’s reapportionment pronouncements of June 15, 1964, to be entirely and solely a matter of state concern?

Similarly as to the provision of the lower court’s original decree .limiting the functions of the.,1965 legislature, it seems scarcely open to serious doubt that so long as the federal courts allow this Georgia Legislature to sit, it must be regarded as the de facto legislature of the State, possessing the full panoply of legislative powers accorded by Georgia law.

I think that the State of Georgia is entitled to a clear-cut pronouncement from this Court that nothing in its reapportionment decisions contemplated such unheard-of federal court intrusion into state political affairs as the decree before us evinces. Beyond that, for this Court to temporize with important interstitial matters of this kind, deeply affecting the even course of federal-state relations, can only serve to aggravate the confusion which last June’s reapportionment cases have left in their wake.

I would modify the decree below by striking therefrom paragraph (2) and approving the. substitute for original paragraph (3) as framed by the District Court.

Mr. Justice Goldberg,

dissenting.

I dissent from the Court’s disposition of this case. By remanding, the Court is, in effect, asking the District Court to decide whether this appeal, which is pending before us and with respect to which we noted probable jurisdiction and heard argument, should be dismissed as moot due to events occurring after the appeal had been perfected in this Court. Mootness, in my view, is a question which, under these circumstances, this Court has the responsibility to decide. The facts relevant to this issue are undisputed. The District Court is in no better position to resolve the issue of mootness than we. No legitimate purpose is served by asking it to determine a question which is properly before us and which a long line of unbroken precedents would have us decide. Moreover, if the case is moot, as I believe, there is no need for a further time-consuming hearing below and a possible future second appeal to this Court. Surely both the District Court and this Court have enough to do without this Court creating unnecessary work for both. I would simply vacate the injunction order and dismiss this appeal as moot.

That this case is in fact moot becomes apparent from a consideration of the history of this litigation.

The appeal calls into question the validity of portions of an injunction issued by a three-judge District Court involving the reapportionment of the Georgia House of Representatives. The District Court entered an order on June 30,1964, holding that the Georgia House of Representatives was unconstitutionally apportioned under the Federal Constitution and declaring invalid state constitutional and statutory apportionment provisions. The court’s order allowed the November 1964 elections for the House of Representatives to take place under the then-existing constitutional and statutory provisions, but it required that new elections be held in 1965 in time for a properly apportioned legislature to take office no later than “the second Monday in January, 1966.” Paragraph (2) of the court’s order further enjoined appellants, state election officials, from placing on the November 1964 election ballot a new state constitution proposed by the then-existing unconstitutionally apportioned legislature, and it also enjoined the submission of a wholly new constitution to the voters by the legislature “at any subsequent election until the [legislature] ... is reapportioned in accordance with constitutional standards.” Paragraph (3) of the District Court’s order limited the power of the 1965 legislature to enacting “such legislation as shall properly come before [it] . . . during the regular 1965 45-day session.” Appellants’ motion for a stay of the District Court’s order was denied by Mr. Justice Black on July 6, 1964.

Appellants appealed to this Court. In their jurisdictional statement they did not contest the basic holding that the House of Representatives was unconstitutionally apportioned. They challenged the validity of portions of paragraphs (2) and (3) of the District Court’s order. Appellees moved to affirm on the ground that the order was in all respects valid. We noted probable jurisdiction, 379 U. S. 809, and granted appellants’ motion to advance the cause for oral argument.

Shortly prior to argument, appellees moved that this appeal be dismissed because events supervening since the entry of the District Court’s order rendered this appeal moot. Appellants opposed this motion. Consideration of appellees’ motion to dismiss was postponed until the hearing.

Upon argument of this case it appeared without dispute that, since the entry of the order below, the parties had agreed upon modifications which eliminated appellants’ objections to paragraph (3) of the District Court’s order and that the District Court, on November 3, 1964, had entered ah order embodying the agreed-upon modifications. It likewise was agreed at the argument that the new constitution proposed by the legislature was not submitted to the voters in November 1964 and that under Georgia law it has lapsed and cannot be resubmitted. Thus the only issue remaining in this case is the validity of that portion of the District Court’s order which prevents the newly elected or any future unconstitutionally apportioned legislature from proposing and submitting to the voters a wholly new state constitution.

Appellees in their motion to dismiss and at the argument stated that although they originally sought affirmance of the portion of the District Court’s order now under consideration, they no longer do so because, due to supervening events, it is now “highly speculative” as to whether the newly elected legislature or any future unconstitutionally apportioned legislature will ever submit another wholly new constitution to the voters. Appellees state that consequently they no longer need the protection given them by the District Court’s prohibition of such a submission, and that “this appeal presents only an abstract, hypothetical controversy in which the ‘lively conflict between antagonistic demands, actively pressed, which make resolution of the controverted issue a practical necessity’ is lacking.”. They suggest that for these reasons controversy over this portion of the order has now become moot and urge that the appeal be dismissed and that this portion of the order'be vacated. Appellants resist the motion to dismiss on grounds of mootness. They contend that this Court should reach the merits and reverse the basic determination of the District Court that under the Federal Constitution a malapportioned legislature's without power to propose a new constitution to the voters. They argue that a decision on the merits is called' for because the issuance of the prior opinion of the District Court granting the injunction will have a prece-dential and deterrent effect, notwithstanding the vacation of the injunction order.

As this history shows, the appeal, in its present posture, is plainly moot under long-established principles and precedents. The question appellants would have us decide is one of grave import involving the power under the Federal Constitution of a malapportioned legislature to submit a state constitution to a popular vote — a question which necessarily involves a consideration of the varying systems used in different States for proposing constitutional amendments. The doctrine of “mootness,” like the related doctrine of “ripeness,” has been evolved by this Court so that.it will not have to pass upon this type of question except upon the urging of one who is harmed or is currently threatened with harm caused by the allegedly unconstitutional action. See Stearns v. Wood, 236 U. S. 75. While this Court cannot and will not avoid its constitutional responsibility to decide apportionment cases arising when'justiciable problems are presented and pressed for decision by litigants claiming an abridgment of their constitutional rights, it should not, in apportionment cases, as in other areas, decide moot issues, volunteer judgments or seek out questions which have ceased to be ripe for adjudication and are no longer presented in the context of an actual pending controversy. I strongly, albeit respectfully, disagree with my Brother Harlan’s intimation, grounded on his basic view that the Court should never have entered into reapportionment matters at all, that now that it has been decided that such issues are justiciable, this Court should be more willing in this “sensitive” area'than in other areas, to give opinions of an advisory nature, so that “the lower courts [will] at least be launched in the right general direction and not allowed to range so far afield.” Opinion of Mr. Justice Harlan, ante, p. 625. Moreover, it has already been demonstrated, as was easily predictable from the history of other constitutional issues of a “sensitive” nature, that there is in this area ample opportunity to guide the lower courts within the traditional bounds of concrete, live controversies, actively pressed by real adverse parties. See Fortson v. Dorsey, ante, p. 433; Scranton v. Drew, ante, p. 40.

This Court does not pass upon constitutional questions unless it is necessary to do so to preserve the rights of the parties. See Liverpool, N. Y. & P. S. S. Co. v. Commissioners, 113 U. S. 33, 39; Ashwander v. Tennessee Valley Authority, 297 U. S. 288, 341, 345-348 (concurring opinion of Mr. Justice Brandeis); Coffman v. Breeze Corps., 323 U. S. 316, 325. Nor does it decide abstract questions merely because of the effect such judgments might have upon future actions in similar circumstances. Little v. Bowers, 134 U. S. 547, 558; California v. San Pablo & T. R. Co., 149 U. S. 308, 314; Kimball v. Kimball, 174 U. S. 158. In the present case we are told by the proponents of the injunction that there exists only a remote possibility that, the newly elected legislature or some future one will submit a wholly new constitution to the voters. Cf. Bus Employees v. Missouri, 374 U. S. 74, 78. If the question of the legislature’s power to propose such a constitution were being submitted to a court as an initial matter, the speculativeness of the legislature’s future conduct would undoubtedly. render this issue unripe for adjudication. See New Jersey v. Sargent, 269 U. S. 328; Arizona v. California, 283 U. S. 423; Electric Bond & Share Co. v. SEC, 303 U. S. 419, 443; Alabama State Federation of Labor v. McAdory, 325 U. S. 450, 471; United States v. Harriss, 347 U. S. 612. The specu-lativeness, which has arisen in this case since the order was entered, makes the issue in this appeal, in my view, similarly unsuitable for adjudication. United States v. Alaska S. S. Co., 253 U. S. 113.

The appellees themselves, in whose favor the judgment below has run, do not assert the need for the protection of the District Court’s order against future submission of a new constitution; they deemf»the possibility of such a submission too remote. They therefore are agreeable to the vacation of the injunction which 'they sought and obtained. This obviously will relieve appellants of any. burden which the injunction imposes upon them. It also will remove any precedential effect of the opinion of the District Court on this issue. United States v. Munsingwear, 340 U. S. 36, 39-41; Note, 103 U. Pa. L. Rev. 772, 794. Appellants would have the injunction reversed on the merits as improperly issued rather than vacated as appellees desire. Although there is this difference as to the proper disposition of this case, the net result is that no party wishes the injunction to remain in effect. In the present posture of the case, the conclusion which emerges is that although the parties differ with respect to the abstract legal question of the validity of the order, there is no longer present here that “real, earnest and vital controversy between individuals” which assures us that a cause is in a “real sense adversary.” Chicago & Grand Trunk R. Co. v. Wellman, 143 U. S. 339, 345; United States v. Johnson, 319 U. S. 302, 305. Appellants’ argument that the order, though vacated, will have an inhibitory effect upon the legislature’s activity is but a way of saying that appellants desire to know for their own purposes, as a guide to future conduct, what this Court would have said on the merits, had the issue remained embedded in a real and substantial controversy. Without such a controversy currently existing between those who appear as adverse parties, this Court should not 'give an opinion upon questions of law “which a party desires to know for . . . his own purposes.” Cleveland v. Chamberlain, 1 Black 419, 426; see Woodpaper Co. v. Heft, 8 Wall. 333; South Spring Hill Gold Mining Co. v. Amador Medean Gold Mining Co., 145 U. S. 300.

The situation in this case is a far cry from that presented in Bus Employees v. Missouri, supra, where an “existing unresolved dispute” made the likelihood of repetition of the conduct in question much greater than the mere “speculative” possibility existing here. Id., at 78. Nor do other decisions relied upon by appellants support their position. In none of these cases was there any assertion, as here, by the party for whose benefit the injunction order was issued, that it had become highly problematical that the conduct which underlay the controversy would be repeated. In Federal Trade Comm’n v. Goodyear Tire & Rubber Co., 304 U. S. 257; J. I. Case Co. v. Labor Board, 321 U. S. 332, relied upon by appellants, the party supporting the validity of the order called into question contended that the order was necessary and its validity should be reviewed. In the instant case whether or not the legislature, while- still malapportioned, will submit a wholly new constitution to the voters is highly problematical, and the parties supporting the correctness of the injunction themselves feel that it should be vacated since they see no threat that the legislature will repeat conduct they consider illegal. The case is, therefore, much more closely analogous to United States v. Alaska S. S. Co., supra, in which this Court refused to review the question of the power of the Interstaté Commerce Commission to require carriers to comply with an ICC order prescribing certain bills of lading. A three-judge District Court had found the Commission had no such power and had enjoined the Commission from ever issuing such an order. Before argument in this Court, however, it became clear that provisions in the bills of lading prescribed by the Commission conflicted with provisions contained in new legislation passed by Congress after the District Court’s decision. Since the particular bills of lading prescribed would have to be withdrawn by the Commission in view of this legislation, and because of the uncertainty as to whether the Commission would prescribe new bills of lading or the form they would take, this Court refused to decide the issue of whether the Commission had the power to prescribe any bills of lading. The Court stated, “However convenient it might be to have decided the question of the power of the Commission to require the carriers to comply with an order prescribing bills of lading, this court ‘is not empowered to decide moot questions or abstract propositions, or to declare, for the government of future cases, principles or rules of law which cannot affect the result as to the thing in issue in the case before it.’ ” 253 U. S., at 116. The Court reversed the District Court’s order and remanded the case to the District Court “with directions to dismiss the petition . . . without prejudice to the right of the complainants to assail in the future any order of the Commission prescribing bills of lading after the enactment of the new legislation.” Id., at 116-117. Unless Alaska S. S. Co., is to be overruled or ignored, the Court should act similarly here.

Finally, I find the Court’s disposition of this case mystifying, for I cannot understand what the District Court is to do upon remand. Since the District Court’s order has been vacated, no injunction will be in effect. Presumably the District Court will have before it two groups of parties, one group urging that no order be entered and the other group claiming that no order is necessary because the likelihood of the legislature’s resubmitting a new constitution is too remote. It is inconceivable to me that the District Court would be warranted in reinstating its injunction under the present facts. Of course, if circumstances changed, and there was a real, rather than a tenuous threat of further legislative action of the type originally complained of, the District Court, which has retained jurisdiction of this case, would be.empowered to entertain an application for appropriate injunctive relief. However, I cannot understand the logic of the Court’s decision in asking the District Court now to make a determination which, under the present circumstances, is rightfully our responsibility.

My Brother Harlan suggests that, contrary to my view, “the Court does not remand the case to the District Court for a determination on the issue of mootness, but only to decide whether any injunctive relief is now appropriate in light of what has transpired since such relief was first granted.” Ante, p. 624. But with due respect, I suggest that hi£ interpretation of the Court’s opinion is not justified by what the Court says or- does. The Court explicitly sets forth appellees’ contention that the case'is moot because “[t]he situation has changed somewhat since the 1964 election,” and “it is now highly speculative as to what the 1965 legislature will do” (ante, p. 622), and then the Court remands the case for reconsideration of the desirability of and need for the injunction in terms of the contentions raised by appellees, i. e., “in light of the results of ■ the 1964 election and the representations of appellees.” Ibid. This surely must mean that the Court is asking the District Court to consider appellees’ contentions that the case is moot. Further, I might better understand my Brother Harlan’s general distinction between determining whether a case is moot and whether an injunction is still appropriate if there were some issue in this case other than the power of the District Court to issue the injunction. But the only issue presented for decision on the merits is whether the District Court validly issued this type of injunction; thus to decide here whether, in light of the changed circumstances and the parties’ present desires, continuance of the injunction is still appropriate is to decide the identical question as to whether, in light of these changed circumstances and the present contentions of the parties, the case has become moot. Determining the issue of mootness and deciding “whether any injunctive relief is now appropriate in light of what has transpired since such relief was first granted,” both come down to the same thing — the question is whether, at this juncture, as appellees contend, “this appeal presents only an abstract, hypothetical controversy in which the ‘lively conflict between antagonistic demands, actively pressed, which make resolution of the controverted issue a practical necessity’ is lacking.” The question is one for this Court to decide.

I believe that the proper result in this case would be to sustain the appellees’ motion to dismiss for mootness and to enter an order vacating paragraph (2) of the District Court’s order of June 30, 1964, prohibiting submission of a wholly new constitution to'the voters by the legislature at the 1964 election or “at any subsequent election until [it] ... is reapportioned in accordance with constitutional standards.” . Thus this portion of the slate would be wiped clean, United States v. Munsingwear, supra, without any necessity for further proceedings below to try the mootness issue. In view of the parties’ stipulations before this Court that they accept the modifications entered by the District Court on November 3, 1964, I believe that the Court is correct in not passing upon the validity of .paragraph (3) of the District Court’s order of June 30,1964 — that portion of the order which appellants took as limiting the powers of the 1965 legislature. However, because of doubts expressed as to the jurisdiction of the District Court to enter its .modified order while appeal is pending in this Court, see Schempp v. School District, 184 F. Supp. 381 (D. C. E. D. Pa.), the Court ought also to vacate paragraph (3) of the June 30, 1964, order on the assumption that the District Court will re-enter its modified order of November 3, 1964, in accordance with the agreement of the parties.

The federal district courts have enough to do in deciding ripe reapportionment cases without our. requiring them to decide stale ones.

APPENDIX A TO OPINION OF MR. JUSTICE GOLDBERG, DISSENTING.

Final Order of the Court of June 30, 1964.

Revised Order.

All parties having consented thereto, the order of the Court dated June 24, 1964, is hereby revised to read as follows:

It is now Ordered, Adjudged and Decreed as follows:

(1) Article III, Section III, Paragraph I (Code Section 2-1501) of the Constitution of Georgia of 1945, is hereby declared to be null, void and inoperative, as being in conflict with the Fourteenth Amendment to the Constitution of the United States.

Section 47-101 of the Code of Georgia, as amended, is hereby declared to be prospectively null, void and inoperative, as being in conflict with the Fourteenth Amendment to the Constitution of the United States, for elections tó the House of Representatives after the General Election to be held in November of 1964.

(2) The defendants are hereby enjoined from placing on the ballot to be used in the General Election tó be held on November 3, 1964, or at any subsequent election until the General Assembly is reapportioned in accordance with constitutional standards, the question whether. a constitutional amendment purporting to amend the present state constitution, by substituting an entirely new constitution therefor shall be adopted; provided, however, nothing in this order shall prevent the submission of amendments to the Constitution of the State of Georgia which are separate as to subject matter, in accordance with Article XIII, Section I, Article 1, of the Constitution of the State of Georgia, 1945. (See Hammond v. Clarke, 136 Ga. 313, for a discussion by the Georgia Supreme Court of what constitutes separate amendments). Nor shall anything in this order prevent the calling by the General Assembly of a “convention of the people to revise, amend or change the constitution” if the representation “in the convention is based on population as near as practicable” with the members being elected by the people (see Article XIII, Section I, Article 2). Constitution of the State of Georgia, 1945.

(3) The motion of the plaintiffs for further injunctive relief prior to the conduct of the party primaries or conventions and the General Election of November 3, 1964, is hereby denied at this time, provided, however, that notwithstanding anything in Article III, Section IY, Paragraph I (Code Section 2-1601) of the Constitution of Georgia of 1945 to the contrary, the service of the members of the House of Representatives ,óí the General Assembly of the State of Georgia to be elected at the General Election in November, 1964, shall be limited to the .enactment of such legislation as shall properly come before the said Legislature during the regular 1965.45-day session, as provided in the Georgia Constitution, including such legislation as may be necessary for the General Assembly to be reapportioned in accordance with constitutional requirements and as may be necessary to permit the holding of elections to the newly constituted General Assembly, said elections to be held at such times as may be necessary to permit the Members of such General Assembly to take office as soon as practicable, but iii ho event later than the second Monday in January, 1966.

APPENDIX B TO OPINION OF MR. JUSTICE GOLDBERG, DISSENTING.

Order of the District Court of November 3, 1964.

Both parties agree that the motion for alternative relief should be granted. Therefore, paragraph 3 of the order of June 30, 1964, is hereby stricken and the following paragraph 3 is substituted in lieu thereof:

“(3) The motion of the plaintiffs for further injunctive relief prior to the conduct of the party primaries or conventions and the General Election of November 3, 1964, is hereby denied at this time, provided, however, that, notwithstanding anything in Article III, Section IV, Paragraph I (Code Section 2-1601) of the Constitution of Georgia of 1945 to the contrary, the service of the members of the House of Representatives of the General Assembly of the State of Georgia to be elected at the General Election in November, 1964; shall be limited to a term- of one year’s duration and provided further that the plaintiffs shall have the right to reapply to this Court for further relief should the General Assembly, which convenes in January, 1965, fail to enact, during the'regular -1965 45-day session, as provided in the Georgia Constitution, such legislation as-may be necessary for the General Assembly to be reapportioned in accordance with Constitutional requirements and as may be necessary to permit the holding of elections to the newly constituted General Assembly during the calendar year 1965, which elections are to be held at such time as may be necessary to permit the members of such newly constitúted General Assembly to take office no later .than the second Monday in January, 1966. To the extent that state statutory and constitutional provisions might otherwise. conflict with such legislative reapportionment, they are hereby declared to be void and of no effect.”

This 3rd day of November, 1964.

       The entire paragraph reads as follows:
      “The defendants are hereby enjoined from placing on the ballot to be used in the General Election to be held on November 3, 1984, or at any subsequent election until the General Assembly is reapportioned in accordance with constitutional standards, the question whether a constitutional amendment purporting to amend the present state constitution by substituting an entirely new constitution therefor shall be adopted; provided, however, nothing in this order shall prevent the submission of amendments to the Constitution of the State of Georgia which are separate as to subject matter, in accordance with Article XIII, Section I, Article 1, of the Constitution of the State of Georgia, 1945. (See Hammond v. Clarke, 136 Ga. 313, for a discussion by the Georgia Supreme Court of what constitutes separate amendments). Nor shall anything in this order prevent the calling by the General Assembly of a ‘convention of the people to revise, amend or change the constitution’ if the representation ‘in the convention is based on population as near as practicable’ with the members being elected by the people (see Article XIII, Section I, Article 2). Constitution of the State of Georgia, 1945.”

       The full text of the District Court’s order and the amendment of item 3 are printed in the dissenting opinion of Mr. Justice Goldberg as Appendices A and B, respectively. Post, pp. 639, 641.

       See Labor Board v. Pennsylvania Greyhound Lines, Inc., 303 U. S. 261, 271; Southern Pac. Terminal Co. v. Interstate Commerce Comm’n, 219 U. S. 498, 514-515.

       If, as I believe, a State is not federally restricted in its choice of means for initiating constitutional change, the question of whether, under Georgia law, the proposed new Georgia Constitution should have been initiated by a popularly elected convention instead of by the legislature is not a matter for federal cognizance.

       To hold as I think the Court should on these issues would not in any way impair the federal courts’ ability to prevent frustration of their reapportionment deerees.

       See, e. g., San Mateo County v. Southern Pac. R. Co., 116 U. S. 138; United States v. Alaska S. S. Co., 253 U. S. 113; Bus Employees v. Wisconsin Board, 340 U. S. 416; Oil Workers Unions v. Missouri, 361 U. S. 363, and the numerous cases cited at 368, n. 7 therein.

       The • District Court’s order of June 30, 1964, is printed as Appendix A.

       Appellants interpreted paragraph (3) of the order to mean that the 1965 legislature could only deal with what was legally considered, to be “legislation.” They feared that the legislature would be unable to conduct investigations, vote pardons, or perform other similar duties. They also were concerned that under the terms of the District Court’s order the 1965 legislature might be unable to meet in special session if such a session proved necessary.

       This orjder is printed here as Appendix B.

       Appellees pointed out at the argument that in the new legislature which will meet in 1965, 20 of the 54 Senators and 67 of the 205 Representatives will have been newly elected at the November 1964 election.

       In their Motion to Dismiss at p. 5, appellees state:
      “Before the proposed new constitution can be placed on the ballot for ratification in any future general election, it must again be submitted to the General Assembly and passed by an affirmative two-thirds vote of.-both houses. This Court has repeatedly admonished that ‘constitutional questions are not to be dealt with abstractly.’ The mere possibility that a similar constitutional proposal may be passed by the. General Assembly at some future time is an insufficient basis for invoking the awesome responsibility of constitutional adjudication by this Court. Without further legislative action, this appeal presents only an abstract,- hypothetical controversy in which the ‘lively conflict between antagonistic demands, actively pressed, which make resolution of the controverted issue a practical necessity’ is lacking.” (Citations omitted.)

       This portion of the District Court’s order also rested upon a determination that under Georgia law the legislature could not submit to the voters a wholly new constitution in the form of an amendment to the existing constitution. Questions are raised as to the correctness of this determination and the propriety of the District Court’s having made it. See Louisiana Power & Light Co. v. Thibodaux, 360 U. S. 25. In light of my resolution of this case, I would not reach these questions.

       See Baker v. Carr, 369 U. S. 186; Reynolds v. Sims, 377 U. S. 533, and companion cases.

       See United States v. Alaska S. S. Co., 253 U. S. 113.

       See San Mateo County v. Southern Pac. R. Co., 116 U. S. 138; Mills v. Green, 159 U. S. 651; Jones v. Montague, 194 U. S. 147; Harris v. Battle, 348 U. S. 803.

       Since their motion to dismiss was reserved until the hearing, appellees have conscientiously argued the merits. However, we cannot ignore the basic fact that they are not pressing for a decision on the merits since they believe they no longer need the protection of the injunction.

       That appellants’ argument does not show that this Court should reach the merits here is further demonstrated by the fact that any inhibitory effect produced by the District Court’s injunction at issue here would also be produced by that part of the injunction prohibiting submission of a new constitution only at the 1964 election. Yet appellants concede, as they must, that this Court would not now review that part of the injunction concerned only with the November 1964 election which has already taken place since the new constitution was not submitted to the voters in November 1964 and under Georgia law it has lapsed and cannot be resubmitted. See Mills v. Green, supra.

        Southern Pacific Terminal Co. v. ICC, 219 U. S. 498; Federal Trade Comm’n v. Goodyear Tire & Rubber Co., 304 U. S. 257; J. I. Case Co. v. Labor Board, 321 U. S. 332.


author: Per Curiam.

text:
    ARROW TRANSPORTATION CO. et al. v. CINCINNATI, NEW ORLEANS & TEXAS PACIFIC RAILWAY CO. et al.
    No. 544.
    Decided January 18, 1965.

      Donald Macleay, Richard M. Freeman, John C. Lovett, Byron M. Gray, Nuel D. Belnap, A. Alvis Layne, Charles J. McCarthy and Robert H. Marquis for appellants in No: 544.

      Robert W. Ginnane, I. K..Hay and Betty Jo Christian for appellant in No. 545.

      Dean Acheson, Henry P. Bailer and W. Graham Claytor, Jr., for Southern Railway System Companies; John F. Donelan and John M. Cleary for Southern Governors Conference et al.; Elbert R. Leigh for Louisville & Nashville Railroad Co. et al.; William A. McClain and Edgar T. Bellinger for City of Cincinnati, appellees in both cases.

      Solicitor General Cox, Assistant Attorney General Orrick and Lionel Kestenbaum filed a memorandum for the United States in both cases.

      Neil Brooks filed a memorandum for the Secretary of Agriculture in both cases.

       Together with No. 545, Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Railway Co. et al., also on appeal from the same court.

   Per Curiam.

These appeals are from a single judgment of a three-judge District Court, 229 F. Supp. 572, which set aside and permanently enjoined the operation, enforcement and execution of the order of the Interstate Commerce Commission, 321 I. C. C. 582, canceling certain rate reductions which had been put into effect by the appellee railroads on the grounds that the new lower rates violated §§ 1 (5) and 3 (1) of the Interstate Commerce Act, 49 U. S. C. §§ 1 (5), 3 (1) (1958 ed.). The judgment of the District Court is vacated and the case is remanded to the District Court with instructions to enter an order'remanding the case to the Interstate Commerce Commission for reconsideration by the Commission in light of the District Court’s determinations (1) that the Commission’s conclusion <that § 3 (1) was violated was not supported by. adequate, findings and (2) that the Commission’s conclusion that § 1 (5) was violáted was based, at least in part, on its prior conclusion that there was a violation of i 3 (1). See FPC v. Idaho Power Co., 344 U. S. 17, 20.

Mr. Justice Black, Mr. Justice Stewart, and Mr. Justice White would note probable jurisdiction of these appeals and set them for argument on. the merits.


text:
    NATIONAL LABOR RELATIONS BOARD v. ADAMS DAIRY, INC.
    No. 25.
    Decided January 18, 1965.

      Solicitor General Cox, Arnold Ordman, Dominick L. Manoli and Norton J. Come for petitioner.

      J. Leonard Schemer for respondent.
   Per Curiam.

The petition for writ of certiorari is granted. The judgment is vacated and the case is remanded to the United States' Court of Appeals for the Eighth Circuit for reconsideration in light of Fibreboard Paper Products Corp. v. Labor Board, ante, p. 203.


text:
    TISONE v. OHIO.
    No. 564.
    Decided January 18, 1965.

      Theodore R. Saker for appellant.

      Loren ~E. Van Brocklin for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of' jurisdiction. ' Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied!


text:
    HALPERT et al. v. UDALL, SECRETARY OF THE INTERIOR.
    No. 552.
    Decided January 18, 1965.

      Leo M. Alpert for appellants.

      Solicitor General Cox, Roger P. Marquis and Herbert Pittle for appellee.
   Per Curiam.

The motion to affirm is granted and the judgment is áffirmed.


text:
    WINKLE v. BANNAN, WARDEN.
    No. 553.
    Decided January 18, 1965.

      Walter A. Kurz,and Dennis Boyle for appellant.
    ■ Frank J. Kelley, Attorney General of Michigan, and James R. Ramsey, Assistant Attorney General, for appelleé.
   Per Curiam.

The motion to strike excerpts from the motion to dismiss is denied. The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    THORN et al. v. HARRISBURG TRUST CO.
    No. 557.
    Decided January 18, 1965.

      Harry S. Shapiro for appellants.

      Samuel A. Schreckengaust, Jr., for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    WINSHIP et al. v. CITY OF CORPUS CHRISTI, TEXAS.
    No. 563.
    Decided January 18, 1965.

      Sidney P. Chandler for appellants.

      I. M. Singer for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    KITTY HAWK DEVELOPMENT CO. v. CITY OF COLORADO SPRINGS.
    No. 565.
    Decided January 18, 1965.

      E. Barrett Prettyman, Jr., for appellant.

      Louis Johnson, Charles S. Rhyne, Brice W. Rhyne and Alfred J. Tighe, Jr., for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    SHERIDAN v. GARDNER et al.
    No. 612.
    Decided January 18, 1965.

      Morris M. Goldings, Francis X. McLaughlin and Thomas J. O’Toole for appellant.

      Edward W. Brooke, Attorney General of Massachusetts, and Warren K. Kaplan, Special Assistant Attorney. General, for Brooke, and Marshall Simonds for Gardner et al., appellees.
   Per Curiam.

The motions to dismiss are granted and the appeal is dismissed for want of a substantial federal question.


text:
    VOORHES et al. v. DEMPSEY, GOVERNOR OF CONNECTICUT, et al.
    No. 600.
    Decided January 18, 1965.

      Colin G. Tait for appellants.

      Harold M. Mulvey, Attorney General of Connecticut, and Raymond J. Cannon, Assistant Attorney General, for appellees.
   Per Curiam.

The motion to affirm is granted and the judgment is affirmed.


text:
    LYLES v. BETO, CORRECTIONS DIRECTOR.
    No. 263,
    Misc.
    Decided January 18, 1965.

      E. D. Vickery for petitioner.

      Waggoner Carr, Attorney General of Texas, and Sam R. Wilson, Assistant Attorney General,, for respondent.
   Per Curiam.

The motion for leave to proceed in forma pauperis and the petition for writ of certiorari are granted. The judgment is vacated and the case is remanded to the Court of Appeals for reconsideration in light of Massiah v. United States, 377 U. S. 201.


text:
    MORRISON-KNUDSEN CO., INC., et al., doing business as MORRISON-KAISER-PUGET SOUND-GENERAL v. WASHINGTON.
    No. 566.
    Decided January 18, 1965.

      Stuart G. Oles and Seth W. Morrison for appellants.

      John W. Riley, Special Assistant Attorney General of Washington, and James A. Furber and Henry W. Wager, Assistant Attorneys General, for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.