In re Lake Jackson Sugar Co.

• Decision Date: 28 January 1904
• Docket Number: 1,044.
• Parties: In re LAKE JACKSON SUGAR CO.
• Court: U.S. District Court — Southern District of Texas

129 F. 640

In re LAKE JACKSON SUGAR CO.

No. 1,044.

United States District Court, S.D. Texas.

January 28, 1904

The following is the referee's report:

To the Honorable Waller T. Burns, Judge of the United States District Court for the Southern District of Texas:

This proceeding, involuntary in its nature, was instituted 4th of November, 1903, by H. D. Taylor & Sons and other parties against the Lake Jackson Sugar Company, of Brazoria county Texas, by petition duly sworn to and filed with the clerk of this court; in which petition it is alleged that the petitioners are creditors of the said Lake Jackson Sugar Company, having provable claims against it to the amount, in the aggregate of $500 and over; that the said company owes debts to the amount, in aggregate, of $1,000 and over; that the said company is insolvent, and is neither a wage-earner nor is it engaged principally in farming or in the tillage of the soil; that within the four months next preceding the filing of their petition, to wit, on the 3d day of November 1903, a receiver, because of the said company's insolvency was put in charge of its properties, under the laws of the state of Texas, the name of which receiver is T E. Bennett, of Angleton, Texas; that said company has committed other acts of bankruptcy by paying money to certain of its creditors, thus creating a preference in favor of such creditors over other of its creditors; that said company has long ceased to pay its debts, and that suits are now pending against it. The prayer of the petitioners is that the Lake Jackson Sugar Company be adjudged bankrupt within the purview of the acts of Congress relating to bankruptcy.

To the said petition of H. D. Taylor & Sons et al. the said receiver, T. E. Bennett, made answer under oath, virtually admitting all the allegations therein, except that which alleges that 'the Lake Jackson Sugar Company is neither a wage-earner nor a person engaged principally in farming or the tillage of the soil. ' To the same effect did several intervening creditors of said company make answer thereto affirmatively alleging in their respective answers that said company was and is chiefly engaged in the business of farming and tillage of the soil. The Lake Jackson Sugar Company though duly served with process, wholly made default.

The petitioners filed a replication to these answers, thus raising the issue as to whether or not the defendant, the Lake Jackson Sugar Company, is or is not engaged chiefly in farming and the tillage of the soil, and this is the only issue in the case. And in pursuance of an order of your honor, made in the above cause, and bearing date December 3, 1903, whereby the undersigned was authorized and directed, as referee of this honorable court, 'to consider the petition in the above cause, and also to hear the contest therein raised by answers therein filed, and to take such proceedings therein as are required by the acts of Congress relating to bankruptcy, and that the said Lake Jackson Sugar Company and contesting creditors shall attend upon said referee at such date in the near future as shall suit said referee and the parties at interest,' I, S.W. Fones, referee, as aforesaid, do report that, having duly extended notices to the said Lake Jackson Sugar Company and to all others in interest, through their attorneys of record, of the time and place for the hearing before me of the matters referred-- that is to say, at 11 o'clock a.m. on the 19th day of December, 1903, at the United States courtroom in the city of Galveston, Texas-- I did, on the day and at the place aforesaid, proceed to consider the said petition and to hear the contest in the above cause raised by answers therein filed, and to take such proceedings therein as are required by the acts of Congress relating to bankruptcy; and, having been attended by Sterling Myer, of the law firm of Hunt & Myer, counsel for the petitioning creditors, A. R. Masterson (for H. Masterson), counsel for T. E. Bennett receiver, and by A. E. Masterson, counsel for intervening and contesting creditors, and having heard read the pleadings and the documentary evidence and the oral and written testimony produced before me and the arguments of counsel and having duly and carefully considered the same and having carefully examined and inquired into the matters so referred, I do find and report as follows:

From the evidence before me I find: That the Lake Jackson Sugar Company was incorporated under the general incorporation act of this state in --april or May, 1900, for the purpose of 'manufacturing sugar cane into molasses, sugar, and all other products of sugar cane, and for that purpose to purchase material necessary for such manufacturing, and to sell the products of such manufacturing business; to purchase such real estate, machinery, and appliances as may be necessary or suitable to conduct such business. ' That very shortly after its incorporation the said company leased two large plantations upon which to raise sugar cane and other products, constructed a railway, equipped with necessary rolling stock, from these plantations to a sugar mill, where it could convert the sugar cane into merchantable commodities, and thence to a trunk line of railway by which the said company could market its products. That it about the same time began the cultivation upon said lands of sugar cane and corn, except a small portion thereof, which it sublet to a third party for rice culture upon shares. That it raised each year large quantities of sugar cane, varying with the seasons, and also corn, employing for that purpose a large number of live stock and from seventy-five to one hundred laborers. That about six or seven hundred acres of said lands were employed in the raising of such cane. That the juice from this cane was manufactured by the said company into molasses, sugar, and syrup, and the commodities were placed each year,...