197 F. 280 | 2d Cir. | 1912
Lead Opinion
(after stating the facts as above).
The bankrupt’s books were produced. It is contended that they were incomplete, and that, therefore, under Bankrupt Act, § 3, subd. “d,” the burden of proof of solvency rested on the alleged bankrupt. This point need not be considered.
The books produced showed on their face an excess of assets over liabilities of about $350,000. The creditors called an accountant, who testified to very many instances of error in the books, from a bookkeeper’s standpoint. They also called a witness who, professing to be an expert, testified to many instances where assets were, as he said, greatly overvalued on the books. Apparently this testimony is highly persuasive; but the bankrupt was entitled to have it submitted to the jury to pass upon, if it were all there was to impeach the accuracy of the books and to sustain the allegation of insolvency. For the purposes of this appeal, therefore, it may be wholly disregarded — treated as if it had never been introduced in the case. Without it, was the trial judge warranted in' directing a verdict of insolvency? We think he was, because of the testimony of Mrs. Seaman as to two errors in the books. Upon the bankrupt’s own books and her testimony insolvency was clearly shown.
Mrs. Seaman was the president and treasurer of the bankrupt, and its sole stockholder. There are no minority stockholders, and she is practically herself the bankrupt. Her own testimony it does not lie .within her own mouth to impeach. She testified that the bankrupt, at the time in question, owed her $200,000, and also owed the American Steel Barrel Company $300,000. Of these amounts the books showed only an indebtedness to Mrs. Seaman of $15,235.98, so that there was an excess of liabilities over those stated in the books of $474,764.02, much more than sufficient to wipe out the excess of assets oyer liabilities which the books showed.
The substance and effect of Mrs. Seaman’s testimony was the correction of errors in the bankrupt’s books by the bankrupt itself. The result was that, when both sides rested, the books thus corrected showed an excess of liabilities oyer assets of about $125,000, with no testimony to show that its financial condition was any better than the books, corrected by its own officer, indicated. To send the.case to the jury under such circumstances, when a verdict of solvency, if rendered, would have to be set aside as against the evidence, would have been an improper proceeding. The trial judge rightly directed a verdict as he did.
If any confirmation of the conclusion that the corporation was insolvent were required, it might be found in the schedules in bank
The decree is affirmed.
Concurrence Opinion
I concur in the result but prefer fo rest the decision upon the fact that the question has now become academic. The schedules filed by the bankrupt since the decision of the district court show beyond question that the bankrupt was and is insolvent. If a new trial were granted, the result would inevitably be the same. The bankrupt cannot deny its own statements and admissions found in the papers filed by it. Courts do not sit to hear moot questions, however interesting they may be, and we have frequently held that where, for any reason, there has ceased to be a controversy between the parties, we will not listen to a discussion of the issue which previously existed.
Two of these cases arose during the present term., viz., Victor Talking Machine Co. v. American Graphophone Co., 191 Fed. 1007, decided February 6, 1912, and In re Lloyd Italiano Societa Di Navigazione, 196 Fed. 1006, 115 C. C. A. 671, decided April 8, 1912. In the latter case we said:
“It appears from the papers and was admitted at the argument that a decision of the interesting question debated, no matter how it may be decided, will In no way change the final decree entered in the District Court. The fact that the question is one which the shipping interests of this and other countries wish to have settled is unimportant. This court does not sit to hear moot questions.”
The schedules filed by the bankrupt are properly before us upon a motion made prior to the argument to dismiss the appeal.