In re Paris Modes Co.

• Decision Date: 08 April 1912
• Docket Number: 178.
• Citation: 196 F. 357
• Parties: In re PARIS MODES CO., Bankrupt. In re GAINES.
• Court: U.S. Court of Appeals — Second Circuit

196 F. 357

In re PARIS MODES CO., Bankrupt. In re GAINES.

No. 178.

United States Court of Appeals, Second Circuit.

April 8, 1912

This cause comes here upon appeal from and on petition to revise an order of the District Court, Southern District of New York, sitting in bankruptcy. The controversy is between the appellant Gaines, a creditor of the bankrupt, and another creditor, the Wynkoop, Hallenbeck, Crawford Company hereinafter called the Wynkoop Company. The estate of the bankrupt has been wound up and final dividend to creditors about 3 1/2 per cent. has been declared. The order sought to be reviewed and which is dated August 3, 1911, directed that the dividend on $199,000 of Gaines' claim be paid to the Wynkoop Company.

The bankrupt carried on business as a manufacturer of patterns for women's clothing, and in connection therewith published a magazine. The Wynkoop Company printed the magazine, and its claim against the bankrupt's estate ($24,120.80) is for balance due for work done in printing such magazine. Gaines owned a half interest in the bankrupt company. He himself, his mother, and his uncle had advanced large sums of money on notes of the Modes Company to keep the concern in business. The mother and uncle had assigned their claims to him, and the amount of $325,500 was found by the referee, without dispute, to be the amount due to him from the bankrupt's estate.

The Wynkoop Company was, as has been stated, the printer of the Paris Modes magazine. For some time the work was done for cash or on 'thirty day account'; the bankrupt being supplied with money through the advances of Gaines and his relatives. In the spring of 1909, the bankrupt asked the printing company for 90 days additional credit. The latter thereupon applied to Dun's Mercantile Agency for a report of financial condition and was informed that the treasurer of the Modes Company (Gaines) had stated in September, 1908 that it owed nothing but short time current bills. Upon the strength of this report, the printing company extended the credit. At that time $199,000 was due for the advances referred to above. The referee took testimony, and, without going into details of his report, it is sufficient to say that he found that, without any fraudulent intent, Gaines made to the representative of the Mercantile Agency the statement as to indebtedness above set forth. Thereupon, on June 22, 1911, it was ordered that the order of the referee allowing the claim of Gaines at $325,500 be modified to the extent that so much of this allowance as represented indebtedness of the bankrupt which existed on September 30 1908, shall be postponed to the claim of the Wynkoop Company. That order was not appealed from.

John J. Crawford, for appellant.

L. J. Wolff, for appellee.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

LACOMBE Circuit Judge (after stating the facts as above).

There is no occasion to go back of the order of June 22, 1911, or to inquire into its propriety. No appeal was taken or petition to review filed, and appellant here concedes that it lays down the rule for...