In re Excelsior Cafe Co.

• Decision Date: 11 January 1910
• Citation: 175 F. 294
• Parties: In re EXCELSIOR CAFE CO.
• Court: U.S. District Court — Eastern District of New York

175 F. 294

In re EXCELSIOR CAFE CO.

United States District Court, E.D. New York.

January 11, 1910

Yankauer & Davidson, for intervening creditors.

Albert W. Gray, for petitioning creditors.

Robert F. Randall, receiver.

CHATFIELD District Judge.

In the present case the appointment of the receiver was not made immediately upon the filing of the petition, but after an investigation by the court, from which it could be determined whether there was absolute necessity for appointing such a receiver. This inquiry showed that the principal business of the corporation was that which is commonly known as a saloon or the buying and selling of liquors, and incidentally furnishing food at certain hours of the day.

The petition in bankruptcy and the petition for the appointment of the receiver both alleged that the bankrupt is engaged principally in trading and mercantile pursuits, to wit, the business of conducting a restaurant and cafe. It also appeared that the corporation against which the petition was filed was prepared to execute a consent to the bankruptcy proceedings, which was done upon the following day by a duly executed admission of the various allegations of the petition.

Under the decision in the Matter of Wentworth Lunch Co., 20 Am.Bankr.Rep. 29, 159 F. 413, 86 C.C.A. 393, it is held that 'a trader is one who buys to sell again, a definition which might apply to a saloon, but not to a restaurant'; and, further, the Circuit Court of Appeals in that opinion holds that the word 'mercantile' is not broad enough to cover the business of keeping a restaurant for the cooking and selling of food. Inasmuch as this case is the latest and the controlling decision upon the question, it is necessary to determine in the present instance what the principal business of this particular corporation was, if there is any doubt about the matter. The question of what business the alleged bankrupt was principally conducting is a determination of fact. The classification of that business, under the statute, is one of law. The creditor may amend his petition in certain cases.

But assuming that the alleged bankrupt had filed a demurrer thereby admitting the allegations of the petition, that it was engaged principally in 'mercantile pursuits, to wit the business of conducting a restaurant and cafe, ' there might be some question under the decision in the Wentworth Case, supra, whether the petitioning creditors...