In re Denton & Haskins Music Pub. Co.
| Decision Date | 11 March 1935 |
| Citation | 10 F. Supp. 802 |
| Parties | In re DENTON & HASKINS MUSIC PUB. CO., Inc. |
| Court | U.S. District Court — Southern District of New York |
Abner Greenberg, of New York City, for receiver.
Murray Ehrlich, of New York City, for bankrupt.
The motion is by one Greenberg, a judgment creditor of the bankrupt, to vacate the adjudication, dismiss the bankruptcy petition, and set aside an ex parte order staying the judgment creditor from further proceedings in the state court.
The bankrupt, a New York corporation, filed a voluntary petition in bankruptcy on February 25, 1935, and was duly adjudicated. The papers on which the present motion is based show that Greenberg recovered judgment against the bankrupt for $2,100 in 1933. Execution having been returned unsatisfied, Greenberg in March, 1934, commenced a suit in the New York Supreme Court to sequester the bankrupt's assets and also to set aside alleged transfers made in fraud of creditors. A temporary receiver in sequestration was appointed on July 10, 1934. Final judgment in sequestration was entered on December 31, 1934, whereby the receivership was made permanent and the receiver directed to collect the assets and distribute them among the creditors. The court made no adjudication relative to the alleged fraudulent transfers, the suit being continued as to that phase. Matters were in this posture when the bankrupt filed its voluntary petition in bankruptcy. It is also shown in the moving papers that Haskins, one of the officers or former officers of the bankrupt, swore in the course of the suit that the bankrupt had been out of business since March, 1934, and that it had no assets.
1. It is argued in support of the motion that the bankrupt had not had its principal place of business in the district for the greater part of six months preceding the filing of the petition, having been out of business altogether for nearly a year, and that consequently the court has no jurisdiction to entertain the bankruptcy proceeding. The premise may be true, but the conclusion does not follow from it. There is jurisdiction in bankruptcy wherever there is domicile, residence, or principal place of business for the major part of the six months' period. Bankruptcy Act, § 2, 11 USCA § 11. The bankrupt is a corporation organized under the laws of New York. For purposes of the Bankruptcy Act, the domicile of a corporation is in the state to whose laws it owes its corporate existence. In re Hudson River Navigation Corporation, 59 F.(2d) 971 (C. C. A. 2). The bankrupt therefore has its domicile in this district. There is nothing to show that as a corporation it has ever been dissolved. The fact that it had ceased doing business and had no assets did not extinguish its corporate existence. Nor did the appointment of a receiver in sequestration and entry of final judgment in sequestration work a dissolution of the corporation. Kincaid v. Dwinelle, 59 N. Y. 548; People v. Troy Steel & Iron Co., 82 Hun, 303, 31 N. Y. S. 337. There being a domicile here when the voluntary petition was filed, the court has jurisdiction of a bankruptcy petition filed by the corporation. There is no force in the creditor's objection to the jurisdiction of the court.
2. It remains to consider the effect of the suit brought by the judgment creditor. That suit had two aspects. The part which...
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