In re Worcester Footwear Co.

• Decision Date: 10 July 1918
• Docket Number: 24800.
• Parties: In re WORCESTER FOOTWEAR CO.
• Court: U.S. District Court — District of Massachusetts

251 F. 760

In re WORCESTER FOOTWEAR CO.

No. 24800.

United States District Court, D. Massachusetts.

July 10, 1918

Jay Clark, Jr., of Worcester, Mass., and Harry T. Talty, of Boston, Mass., for petitioning creditors.

Robert A. B. Cook and Phipps, Durgin & Cook, all of Boston, Mass for alleged bankrupt.

MORTON District Judge.

The decisive question, and the only one which has been argued, is that of jurisdiction. It turns on whether the alleged bankrupt had its principal place of business within this district for the greater part of the six months preceding the filing of this involuntary petition against it. Bankruptcy Act July 1, 1898, c. 541, Sec. 2 (1), 30 Stat. 545 (Comp. St 1916, Sec. 9586). The respondent contends that it did not and that its principal place of business was in New York. The petition was filed on March 21, 1917, so that the period to be considered begins on September 21, 1916.

The facts are not seriously in controversy; they are fully stated in the referee's report. The alleged bankrupt was organized under the law of Maine in February, 1916, to act as a selling company for the Worcester Felt Shoe Company, a Massachusetts corporation, which manufactured shoes and had its principal place of business in Worcester, Mass. Most of the respondent's business consisted of receiving consignments of shoes from the parent company, reselling them to the retail trade, collecting payments therefor, and turning the payments directly over to the other company. Its books were kept by clerks of the Shoe Company, and its officers and employes were also connected with that company. It had no place of business of its own. Until the autumn of 1916 all its business, except selling its goods, was done in the offices of the Shoe Company in Worcester. One Pevear was treasurer of both companies until October of that year, when he was succeeded as treasurer of the respondent by one Russell. Up to this time there can be no doubt that the respondent's principal place of business was in Worcester.

Following Mr. Russell's election as treasurer, he removed the record books and stockbook to his own law office in New York; but the books of account remained in Worcester in the office of the Shoe Company, kept, as formerly, by one of its employes, who was also connected with the respondent. At this time Mr. Russell notified the clerk of the corporation in Maine and the internal revenue collector that the corporation had removed to New York.

On December 26, 1916, the Shoe Company finally closed its doors on account of financial difficulties. Somewhat earlier in that month Mr. Russell had opened a bank account in New York in the respondent's name, the first and only bank account which it ever had. Thereafter such payments as it made by check (numbering about 15 in all) were made from that account. The last merchandise sale by the respondent was made in Worcester, in December, 1916, of goods there in storage. Its subsequent activities consisted in sending out bills for its accounts receivable, which was done in Worcester, in receiving payments thereon, which came to its post office box in Worcester and were received by the treasurer on his visits to Worcester, in...