In re Perry Aldrich Co.

• Decision Date: 28 September 1908
• Docket Number: 13,634.
• Citation: 165 F. 249
• Parties: In re PERRY ALDRICH CO.
• Court: U.S. District Court — District of Massachusetts

165 F. 249

In re PERRY ALDRICH CO.

No. 13,634.

United States District Court, D. Massachusetts.

September 28, 1908

Fred L Norton, for petitioner.

Eugene C. Upton and George F. Haley, for respondents.

DODGE District Judge.

This involuntary petition, filed April 17, 1908, alleges the commission of a single act of bankruptcy, viz., that on or about December 21, 1907, because of insolvency, receivers were put in charge of the alleged bankrupt's property, by the Supreme Judicial Court of the state of Maine, under the laws of that state. The alleged bankrupt answered May 1 1908, denying that its principal place of business was within this district for the greater portion of the six months ending with the filing of the petition, and denying, also that it committed the act of bankruptcy alleged within four months before the filing of the petition. A similar answer was filed on the same day by an alleged creditor.

Under a reference to ascertain and report the facts, the referee's report has been in favor of adjudication on both the above questions. The answers also denied that the petitioners were creditors having unsecured provable claims amounting to $500 in all; but this, according to the report seems to have been waived at the hearing.

1. The question as to the jurisdiction of this court turns on the following facts, which I find: The respondent was a Maine corporation, but at its Maine office in Kittery did nothing except hold its annual meetings. Its business of dealing in jewelry it had carried on in Boston, in offices of its own, where it had a stock in trade worth $5,000 or more, until about the end of October, 1907. It then sold out all but a comparatively insignificant part of its stock, gave up its former place of business, and thereafter had no other place of business in Massachusetts, except a room occupied, used, and paid for by another concern whereof its own treasurer was also treasurer. To this room its remaining stock, worth from $200 to $300, and its fixtures, were removed from its former location. In this room its treasurer thereafter attended to its affairs; its name being upon a card attached to the outside of the door. There he received its mail and telephone messages, made some small sales from its stock, made some collections of amounts due it, sent out articles from its stock by traveling salesmen having their headquarters at the same room, answered inquiries, and negotiated settlements regarding its affairs. Some of its fixtures were used by the concern to which the room belonged, and some were kept there on storage. What its treasurer did there on its behalf from and after December 18, 1907, at latest, he did under the authority and with the approval of receivers appointed by the Supreme Judicial Court of Maine, in equity proceedings against it in that court which are more fully referred to below.

An injunction issued in those proceedings November 22, 1907, forbade the respondent corporation to proceed any further with its business during the pendency of the case. Whatever the extraterritorial effect of this injunction, it does not appear that the corporation or its treasurer ever undertook to dispute its authority in any of their subsequent doings in Massachusetts. The receivers took possession of its property in Boston December 18, 1907. They instructed its treasurer to retain custody of the stock and fixtures, make sales and collections, and look after the mail. He acted in accordance with the instructions given him until the present petition was filed. The receivers had no authority to carry on the business of the corporation, nor did they ever undertake to carry it on. All they were directed by the court to do, or undertook to do, was to collect and hold its assets until otherwise ordered.

I do not think the corporation can be said to have been 'doing business' in any proper sense after December 18, 1907. As against the petitioning creditors it might be estopped to deny that it had ceased doing the business in which their debts were contracted. Tiffany v. La Plume Milk Co (D.C.) 141 F. 444. But another creditor would not be thus estopped, and as against him I do not think the facts proved establish the jurisdiction of this court. The corporation was not continuing the business it had been organized to do, nor was it liquidating its affairs of its own accord through officers of its own selection. It had been ordered by a court having the right to do so to stop doing that business; and acts done thereafter, merely in order to collect its assets or turn them into money, by officers of that court, cannot, as it seems to me, be what is intended by 'business' in the expression 'principal place of business,' as used in the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 544 (U.S. Comp. St. 1901,...