Credit Alliance Corp. v. Atlantic, Pacific & Gulf R. Co.

• Decision Date: 25 April 1935
• Docket Number: No. 10184.,10184.
• Citation: 77 F.2d 595
• Parties: CREDIT ALLIANCE CORPORATION v. ATLANTIC, PACIFIC & GULF REFINING CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

77 F.2d 595 (1935)

CREDIT ALLIANCE CORPORATION v. ATLANTIC, PACIFIC & GULF REFINING CO. et al.

No. 10184.

Circuit Court of Appeals, Eighth Circuit.

April 25, 1935.

Alfred McKnight, of Fort Worth, Tex. (Eliot E. Berkwit, of New York City, Warren Scarborough, of Fort Worth, Tex., Dills, Muecke & Schelker, of New York City, and Cantey, Hanger & McMahon, of Fort Worth, Tex., on the brief), for appellant.

Dupuy G. Warrick, of Kansas City, Mo. (Robert B. McCreight and Borders, Borders & Warrick, all of Kansas City, Mo., on the brief), for E. E. Amick, successor temporary trustee for Atlantic, Pacific & Gulf Refining Company, appellees.

Before GARDNER, WOODROUGH, and VAN VALKENBURGH, Circuit Judges.

WOODROUGH, Circuit Judge.

On the 19th day of June, 1934, the Atlantic, Pacific & Gulf Oil Company filed its verified petition under section 77B of the Bankruptcy Act (11 USCA § 207) "stating the requisite jurisdictional facts under the section; the nature of its business; in brief description, the assets, liabilities, capital stock and financial condition; the fact that prior receivership proceedings in equity were pending against it in various named courts; its inability to meet its debts as they mature and that it desired to effect a plan of reorganization." The prayer was for an order approving the petition as properly filed in good faith and for all other relief, including the appointment of trustee, to which the debtor may be entitled. At the same time and in the same proceeding similar petitions were filed by five other corporations, in each of which it was alleged that the majority of the capital stock of the corporation which has power to vote at the election of directors is owned directly by the Atlantic, Pacific & Gulf Oil Company. Upon the filing of the petitions, the judge of the court, being satisfied that the petitions complied with section 77B and had been filed in good faith, approved the petitions as properly filed under the section and appointed a temporary trustee. The court also fixed the date of July 7, 1934, for a hearing to be had after notice to creditors and stockholders as contemplated by the statute section 77B (c), 11 USCA § 207 (c).

Within the time fixed for the hearing, the Credit Alliance Corporation appeared and filed a so-called plea to the jurisdiction and also its objections to continuation of trusteeship and appointment of permanent trustee and motion to dismiss. Its pleadings alleged that the subsidiary corporation, Atlantic, Pacific Gulf Refining Company, was indebted to the Credit Alliance Corporation in an amount far exceeding the value of all of the property of such subsidiary, said property being all subject to a lien for said debt; that the federal District Court in Texas, within whose territorial jurisdiction practically all of the property of the subsidiary corporation was situate, had ordered such property sold to satisfy the debt, and the sale was imminent, and that there was no possible hope that reorganization of the subsidiary corporation could be effected, but that the proceedings under section 77B had been taken solely to hinder and delay and not in good faith.

The court, having heard the testimony offered on the issues raised, adjourned the hearing upon the matter of the appointment of a permanent trustee to subsequent date to be fixed on notice and overruled the objections of the Credit Alliance Corporation and its motion to dismiss. The court found that it would disturb and defeat the exclusive jurisdiction of the court over the property of the debtors to permit the sale of the property in Texas, and that such sale might interfere with a plan of reorganization which may be submitted under the provisions of section 77B, and the holding of the sale was accordingly stayed and parties were enjoined from proceeding therewith "until the further order of the Court."

The Credit Alliance Corporation claims to be aggrieved by the orders of the District Court and seeks to have them reviewed and reversed, but it made no application to this court for an appeal from the said orders. We have no discretion to entertain appeals which are not taken in accordance with the statute which gives us appellate jurisdiction Wingert v. Smead (C. C. A.) 70 F.(2d) 351, 352, and although no motion to dismiss has been made, we must consider first the question of the sufficiency of the appeal which the Credit Alliance Corporation seeks to maintain in this court.

The objections and motion to discontinue the trustee and to dismiss filed by the creditor Credit Alliance Corporation called upon the trial court either to, in effect, set aside and annul its order approving the petitions of the debtors as properly filed in good faith, or else the pleadings called upon the trial court, in the exercise of its jurisdiction over the debtors and their property conferred upon the court of bankruptcy by section 77B, to terminate the trusteeship and restore the possession, as the trial court is given power to do by paragraph (c) of section 77B. The order of the trial court overruling the Credit Alliance Corporation's objections and motions must therefore be treated either as an...