Fada of New York v. Organization Service Co.

• Decision Date: 26 January 1942
• Docket Number: No. 169.,169.
• Citation: 125 F.2d 120
• Parties: FADA OF NEW YORK, Inc., et al. v. ORGANIZATION SERVICE CO., Inc.
• Court: U.S. Court of Appeals — Second Circuit

125 F.2d 120 (1942)

FADA OF NEW YORK, Inc., et al. v. ORGANIZATION SERVICE CO., Inc.

No. 169.

Circuit Court of Appeals, Second Circuit.

January 26, 1942.

S. Howard Imbrey, of New York City, for appellant.

Mordecai M. Richter and George J. Beldock, both of New York City, for appellees.

Before L. HAND, CHASE, and CLARK, Circuit Judges.

PER CURIAM.

This is an appeal from an order denying the bankrupt's motion, made under Rule 12(b) (2), Federal Rules of Civil Procedure, 28 U.S.C.A. following sections 723c, to dismiss an involuntary petition against it for lack of jurisdiction. The question is whether the bankruptcy court for the Southern District of New York had jurisdiction over the petition under § 2 sub. a(1) of the Bankruptcy Act, 11 U.S.C.A. § 11, sub. a(1). The facts are as follows. The bankrupt, a corporation organized under the laws of New Jersey, made an assignment for the benefit of creditors in New York on February 19, 1941. A petition for adjudication was filed against it on May 28th; between the assignment and that date no business was carried on as the assignee sold out the whole stock almost at once. In 1940 the company had had two places of business, both in New Jersey; but in that year it discontinued one of these and opened a substitute in New York. The business consisted of selling merchandise through fraternal organizations and the like, and all the tangible assets — consisting mainly of samples — were in New York when the assignment was made. The president, who had charge of the business, divided his time, however, between the two offices; in what proportion it does not appear. The bankrupt argues that, even if its principal place of business was in New York for the longer part of the six months preceding May 28, 1941, than in any other jurisdiction, that is not controlling in view of the fact that the business had ceased for more than half that period; and that its domicile should be the test. Further, if that be not true, at least it does not appear that its principal place of business between November 28, 1940, and February 19, 1941, was in fact in New York.

There is not the slightest reason for saying that because the bankrupt had no place of business for half the six months preceding petition filed, it could be adjudicated only in the court of its domicile. Section 2, sub. a(1) has always spoken in the alternative, and allows either court to take jurisdiction. It may indeed be true that, if any business whatever had...