In re American & British Mfg. Corp., 6716.

CourtUnited States District Courts. 2nd Circuit. United States District Court (Connecticut)
Citation300 F. 839
Docket Number6716.
Decision Date14 July 1924

300 F. 839


No. 6716.

United States District Court, D. Connecticut.

July 14, 1924

[300 F. 840]

Choate, Hall & Stewart, of Boston, Mass., and Homer S. Cummings, of Stamford, Conn., for plaintiff.

Larkin, Rathbone & Perry and Henry E. Kelley, all of New York City, for Central Union Trust Co.

Louis H. Strouse, of New York City, and Wm. H. Comley, of Bridgeport, Conn., for trustee.

THOMAS, District Judge.

On November 20, 1923, the American & British Manufacturing Corporation was adjudicated a bankrupt in this court upon its voluntary petition, filed November 19th. On December 5, 1923, the New Idria Quicksilver Mines, Inc., a petitioning creditor, filed its petition to have such adjudication vacated. In support of its claim that it is a creditor it alleges that it has recovered judgment in the United States District Court for the District of Rhode Island in the sum of $1,845,506.05. This allegation is admitted, and it is also conceded that upon appeal to the Circuit Court of Appeals for the First Circuit this judgment has been reversed (293 F. 509) and sent back for a new trial, and the cause is now pending before the Rhode Island court pursuant to the mandate of the Circuit Court of Appeals. In this suit the New Idria Company has acquired certain securities for the enforcement or partial enforcement of such judgment as it may ultimately obtain. [300 F. 841]

In the month of February, 1921, the American & British Securities Company, a Delaware corporation, began an action in equity in the United States District Court for the Southern District of New York against the American & British Manufacturing Company to conserve the assets of the defendant. In this action the defendant filed its answer, admitting the allegations of the complaint, and thereupon a receiver was appointed by the District Court for the Southern District of New York, and ancillary receivers were appointed in Rhode Island and Connecticut, in both of which states the defendant had large manufacturing establishments. The receivers thus appointed duly qualified and have administered the property of the Providence and Bridgeport factories ever since their appointment in February, 1921, down to the date of adjudication on November 20, 1923.

The petition to vacate the adjudication is based on three grounds: (1) That the district of Connecticut had no jurisdiction in the premises, because the bankrupt was neither a resident of nor domiciled within this district, nor did it have its principal place of business in this district within six months or the greater portion thereof preceding the filing of the petition in bankruptcy. (2) That the petition was filed in violation of an order of the United States District Court for the Southern District of New York, and that said filing was in contempt of such court. (3) That the petition was unnecessary and vexatious and an interference with the administration of the estate of the bankrupt now already undertaken by the District Courts of New York, Rhode Island and Connecticut. Testimony has been taken upon the issues tendered by the petition, and from all the evidence I deem the following facts established:

The American & British Manufacturing Corporation is a corporation organized under the laws of the state of New York and was incorporated in 1919. Its principal business office was stated in its charter to be in New York City. All meetings of the board of directors, executive committee, finance committee, and of its stockholders from the date of incorporation to the date of filing the petition herein were held in New York City. The minute books, stock and transfer books, and records of meetings of the various committees of the board of directors were kept at its office in New York City. In its by-laws and in several instruments executed by the corporation it was recited that its principal place of business was in New York City. The laws of Connecticut, prescribing what steps must be taken by a foreign corporation before doing business in this state, were not complied with.

The office of the company in New York consisted of one room in a suite occupied by the law firm of Loucks, Connett & Cullen, 120 Broadway, who were general counsel for the corporation. The office was in charge of an assistant secretary and assistant treasurer. The corporation's only asset-- its only possession in New York City-- was a solitary letter file, which was kept in that room. All of its other assets were either at Bridgeport or Providence, in each of which cities it owned large manufacturing establishments.

The Bridgeport plant consisted of between 25 and 30 buildings, occupying between seven and eight acres. The executive offices of the company were in Bridgeport, and consisted of a large suite of rooms, [300 F. 842] occupied by the president, secretary, treasurer, assistant treasurer, and a clerical force of 60 to 70 persons. All general books of account were kept there under the supervision of the assistant treasurer. Contracts of purchase and sale were, with few exceptions, made at Bridgeport, or under directions from the Bridgeport office. Bills were sent out from both plants, but all payments were directed to be made at Bridgeport, and most of them were made there. All quotations made by either plant had to be approved by the president at Bridgeport. The principal bank account was kept there, and all checks were signed there. The bulk of the correspondence with the general public was carried on from there, and all records, except stock books and minute books, were kept there. No business was solicited from the New York office. All mail received by it relating to the conduct of the business was referred to the Bridgeport office. The highest number of factory employees was 7,000 or 8,000, and this number gradually dwindled to as many hundred, and that number was gradually reduced until operations ceased. The weekly pay roll, made up and financed in Bridgeport, varied from the high peak of $21,893 down to $468, and finally nothing, when operations ceased.

The Providence plant contained 15 to 20 buildings of various sizes, about seven acres of ground, but was smaller than the Bridgeport plant in the number of persons employed. No officer was stationed there, and all business done there was transacted under the directions issued from the Bridgeport office, and the Providence plant undertook no business without first communicating with Bridgeport, and securing the approval of the proper officer at Bridgeport. The average number of men employed at Providence was less than at Bridgeport, but the weekly pay roll for Providence was financed from the Bridgeport office and sent over to Providence.

The evidence is uncertain as to whether the president of the corporation directed the business and merely reported to the executive committee what he had done, or carried out in detail the policies which had been previously decided upon by the executive committee; but in the view which I take of the case this is immaterial, but from a careful scrutiny of all the evidence it is apparent that Bridgeport was the principal place of the business operations of the corporation.

On February 16, 1921, a receiver in equity was appointed for the corporation by the United States District Court for the Southern District of New York. Thereafter ancillary receivers were appointed in Connecticut and Rhode Island, and since that time no business of any kind has been carried on by the company. The receivers continued in control until the property in this state was sold by the receivers on March 10, 1923, and the business of the bankrupt ceased in Connecticut on that date. The Providence plant was also sold by the receivers shortly thereafter.

It is contended by the bankrupt that this motion should be denied, because the petition in bankruptcy alleges all the jurisdictional facts, and that on a motion to vacate, which is equivalent to a demurrer, only questions of law can properly be raised. It is well settled, however, that a petition to vacate upon the ground that the court has [300 F. 843] no jurisdiction because the facts are not as alleged in the petition is the proper procedure. In re San Antonio Land & Irrigation Co., Limited (D.C.) 228 F. 984, Judge Augustus N. Hand said, on page 986, attacked in reply to the claim of the trustee that the adjudication cannot be attacked collaterally, but only on appeal:

'In a voluntary proceeding, which this was, an adjudication in bankruptcy immediately follows the filing of a petition good on its face, without opportunity to any interested person to question the allegations of the petitioner. It seems to be entirely settled that allegations as to residence, domicile, and principal place of business are jurisdictional matters. A petition to vacate upon the ground that the court obtained no jurisdiction of the subject-matter, if these facts are not as alleged, is the correct practice. In re Garneau, 127 F. 677, 62 C.C.A. 403; In re Guanacevi Tunnel Co., 201 F 317, 119 C.C.A. 554.'

Had the instant case been one of involuntary proceedings, any creditor could have intervened, answered, and joined issue with the petitioner as to any of the facts set forth in the petition. Where, however, the bankrupt files a voluntary petition, a creditor has no opportunity of contesting the adjudication, as such adjudication follows automatically upon the filing of the petition, and his only remedy, therefore, is to come into court and move to vacate the adjudication.

It was held in Finn v. Carolina Portland Cement Co., 232 F. 815, 147 C.C.A. 9, that the bankrupt may not waive jurisdiction where the same depends upon residence or place of business. In discussing the effect of the provisions of section 2 of the Bankruptcy Act, and the requisites necessary to confer jurisdiction, Judge Maxey said on pages 817 and 818 (147...

To continue reading

Request your trial
27 cases
  • In re Burley, Bankruptcy No. LA 80-08761-RO.
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California
    • May 28, 1981
    ...Co., 5 Cir., 232 F. 815; In re San Antonio Land & Irrigation Co., D.C.S.D.N.Y., 228 F. 984; In re American & British Mfg. Corp., D.C.Conn., 300 F. 839; In re Mitchell, 2 Cir., 219 F. 690; In re Garneau, 7 Cir., 127 F. 677; In re Guanacevi Tunnel Co., 2 Cir., 201 F. 28 B.A. § 32; In re Eathe......
  • Robinson v. Trustees of New York
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • April 5, 1945
    ...551, 78 L.Ed. 1020;Foust v. Munson Steamship Lines, 299 U.S. 77, 57 S.Ct. 90, 81 L.Ed. 49;In re American & British Mfg. Corporation, D.C., 300 F. 839;In re Adolph Gobel, Inc., 2 Cir., 89 F.2d 171;Gross v. Bush Terminal Co., 2 Cir., 105 F.2d 930. It has been held that, in the absence of leav......
  • Jordan v. Independent Energy Corp., CA3-76-1309-F.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • March 22, 1978 a New York Federal District Court in February, 1921 to conserve the corporation's assets. In re American & British Manufacturing Corp., 300 F. 839 (D.C.Conn.1924). The court appointed a receiver and thereafter the company was adjudicated a bankrupt upon its voluntary petition. On Decembe......
  • Robinson v. Trustees of New York, N.H. & H.R. Co.
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • April 5, 1945
    ...Section 205 (c) (7). Ex parte Baldwin, 291 U.S. 610. Foust v. Munson Steamship Lines, 299 U.S. 77. In re American & British Manuf. Corp. 300 F. 839. In re Adolph Gobel, Inc. 89 F.2d 171. Gross v. Bush Terminal Co. 105 F.2d 930. It has been held that, in the absence of leave from the bankrup......
  • Request a trial to view additional results
1 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT