Hamilton Gas Co. v. Watters
| Decision Date | 08 October 1935 |
| Docket Number | 3908.,No. 3885,3885 |
| Parties | HAMILTON GAS CO. v. WATTERS et al. (two cases). |
| Court | U.S. Court of Appeals — Fourth Circuit |
Nathan A. Smyth, of New York City (Frank Lively, of Charleston, W. Va., on the brief), for appellant.
Stanley C. Morris, of Charleston, W. Va., and T. R. White, of Philadelphia, Pa. (Philip P. Steptoe and W. Ervin Miller, all of Charleston, W. Va., White, Maris & Clapp, of Philadelphia, Pa., and Steptoe & Johnson, of Charleston, W. Va., on the brief), for appellees.
Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.
Upon the former appeal in this case, reported as Hamilton Gas Co. v. Watters (C. C. A.) 75 F.(2d) 176, it was decided that in the proceedings for the reorganization of Hamilton Gas Company, a Delaware corporation, under section 77B of the National Bankruptcy Act (11 USCA § 207), a petition of the corporation filed in the District Court for the Southern District of New York on June 8, 1934, followed by a decree on June 9, 1934, approving the petition and taking exclusive jurisdiction of the debtor and its property, gave that court the prior right to proceed with the corporate reorganization, notwithstanding the fact that an earlier petition for the same purpose had been filed by creditors on June 7, 1934, in the District Court for the Southern District of West Virginia. Jurisdiction of the New York court was based on the allegation that the corporation, during the preceding six months, had had its principal place of business in New York; while the jurisdiction of the West Virginia court was based on the allegation, not denied in the corporation's answer, that during that period, the corporation had had its principal assets in West Virginia. An additional allegation in the West Virginia case, that the principal place of business had been in West Virginia, was denied, and the case being submitted without evidence on petition and answer, a decree was passed on June 21, 1934, wherein the court assumed exclusive jurisdiction of the debtor and its property as of the date of the inception of the proceedings therein. Thus the conflict of jurisdiction between the two courts was sharply drawn, each finding support in the jurisdictional provisions of the statute. We held that it was the intention of Congress to give preference, under such circumstances, to the jurisdiction selected by the corporation debtor rather than that chosen by the petitioning creditors; and that it is the priority of the adjudication and not priority in the filing of the petition which determines the right of a court to retain jurisdiction as against another court in which a petition has also been filed. See, also, in this connection, In re Fox Metropolitan Playhouses (C. C. A.) 74 F. (2d) 722, 724. Consequently, we reversed the decree of the West Virginia court.
There was no decision in the District Court or in this court in that case upon the disputed question as to the location of the principal place of business during the preceding six months; and there had been no trial of this issue in the ex parte proceeding in the Southern District of New York; but it was brought to our attention, by statements in the record before us, that the Debentureholders Protective Committee, a petitioning creditor in the West Virginia case, had petitioned the New York court to dismiss the debtors' petition therein filed, or, in the alternative, to transfer the proceedings to the Southern District of West Virginia, contending that for all practical purposes, the business of the company had been conducted in West Virginia since the early part of 1932. With these allegations in mind, we remanded the case to the District Court with instructions to retain jurisdiction if it should be found that the principal place of business had not been in the Southern District of New York; otherwise to vacate its order approving the creditors' petition, and to transfer the proceedings to the Southern District of New York, unless, in the meantime, the court in that district should determine that the interests of all parties would be best served by transferring the proceedings to the court below.
When the Debentureholders Protective Committee questioned the jurisdiction of the District Court of the Southern District of New York, by petition filed therein, an answer was filed by the...
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