The opinion of the court was delivered by: BRODERICK
BRODERICK, District Judge.
This is an action based on diversity of citizenship wherein the plaintiff, Ric-Wil, Inc., alleges that it is a corporation organized pursuant to the laws of Ohio, where it has its principal place of business. Ric-Wil seeks to preliminarily and permanently enjoin the defendants from disbursing certain funds in an account in the defendant First Pennsylvania Banking and Trust Company alleging that the funds are trust funds in which plaintiff has a beneficial interest. It is alleged that the Bank is a corporation organized pursuant to Pennsylvania law, and has its principal place of business in Pennsylvania. It is also alleged that all the individual defendants are citizens of Pennsylvania. Arthur C. Crimmins is the President of Pennsylvania Utilities Investment Corporation ("PUIC"), a corporation currently in Chapter XI bankruptcy proceedings. Walter G. Arader is the Secretary of Commerce of the Commonwealth of Pennsylvania. J. Campbell Collins is the Chairman of the City of Wilkes Barre Industrial Development Authority ("Authority"). Currently before the Court are the defendants' motions to dismiss, pursuant to Rule 12(b)(1), Federal Rules of Civil Procedure alleging, inter alia, that this Court lacks jurisdiction to determine the merits of the plaintiff's claim in a plenary action because the funds are subject to the jurisdiction of the Bankruptcy Court pursuant to Section 311 of the Bankruptcy Act, 11 U.S.C. § 711. The defendants also claim that this action should be dismissed pursuant to Rule 12(b)(7), Federal Rules of Civil Procedure, for failure of the plaintiffs to join the receivers in bankruptcy as indispensable parties.
Plaintiff's complaint in this action was filed on December 15, 1972. On December 19, 1972, after hearing in open Court, this Court denied plaintiff's petition for a temporary restraining order and entered the following Order:
AND NOW, this 19th day of December 1972, pursuant to the Motion of the Plaintiff for a preliminary injunction, it is hereby
ORDERED that, pursuant to the Federal Rules of Civil Procedure, Rule 65(a)(2), the trial of the action on the merits is advanced and consolidated with the hearing on the Motion, which is hereby scheduled for Wednesday, January 3, 1973 at 9:30 A.M. in Courtroom No. 13 of this United States Courthouse.
It is further ORDERED that Ric-Wil, Inc., or its authorized representative, be and is hereby authorized to make personal service of the Complaint herein and a copy of all other papers which have been filed of record as of the date of this Order.
It is further ORDERED that briefs on the issue of the Court's subject matter jurisdiction over the instant action shall be filed, in duplicate, by all parties on or before January 2, 1973.
It is further ORDERED that proposed Findings of Fact and Conclusions of Law, with briefs in support thereof, shall be filed, in duplicate, by all parties on or before January 2, 1973.
On January 3, 1973 oral argument was heard on the defendants' motions to dismiss; and for the purpose of these motions only, the parties stipulated on the record such facts as were considered necessary for the Court to determine the issues raised by the motions to dismiss. Briefs were submitted, and the Court continued the trial on the merits. This opinion is dispositive of the issues raised by the motions to dismiss.
In June 1972 the steam heat system of the Wilkes Barre Steam Heat Company ("Steam Heat Company") suffered extensive damage as a result of the devastating floods which inundated portions of the Commonwealth of Pennsylvania. On August 18, 1972, the Commonwealth of Pennsylvania loaned $2,500,000.00 to the City of Wilkes Barre Industrial Development Authority ("Authority" which executed a note in that amount, dated August 18, 1972, payable to the Commonwealth of Pennsylvania on or before November 18, 1972, in which the Authority agreed that it would cause the loan proceeds to be loaned, concurrently, to the Steam Heat Company, Public Utilities Investment Corporation and International Service Industries, Inc., and it would require those corporations "to use the loan proceeds to refurbish and/or replace the flood-damaged boilers and distribution system" of Steam Heat Company.
Concurrently, on August 18, 1972, Authority loaned the $2,500,000.00 to Steam Heat Company, PUIC and ISI, which corporations executed a note in that amount, payable to Authority on or before November 18, 1972, and in which the said corporations agreed to "use the loan proceeds to refurbish and/or replace the flood-damaged boilers and distribution system" of Steam Heat Company.
On the same day, August 18, 1972, the Authority assigned to the Commonwealth of Pennsylvania, without recourse, the note executed by ...