132 F. 378 | S.D.N.Y. | 1904
The bankrupt, a corporation organized under the laws of the state of Delaware, had its actual residence in the city of New York, where it administered its business and disposed of its product, with a branch sales office in the city of Chicago. The product was manufactured in the state of Massachusetts. On August 4, 1904, a petition in bankruptcy was filed against it in the District of Delaware, where, on August 10th, adjudication of bankruptcy was had and the Security Trust & Safe Deposit Company of Delaware, also a trustee under a mortgage covering important portions of the bankrupt’s property, was appointed receiver by the referee. On August 6th a petition was filed in the Southern District of New York, and Peter Alexander, of the city of New York, was appointed receiver of the bankrupt’s property. He duly qualified on that date, took and now has possession of such property. At later dates ancillary orders appointing Alexander
"In the event petitions are filed against the same person or against different members of a partnership in different courts of bankruptcy, each of which has jurisdiction, the cases shall be transferred, by order of the courts relinquishing jurisdiction, to and be consolidated by the one of such courts which can proceed with the same for the greatest convenience of parties in interest.”
This section contemplates that only the “greatest convenience oí parties in interest” shall be consulted in determining whether jurisdiction shall be relinquished. If this section governs, certainly upon the present record jurisdiction should not be relinquished in favor of the District Court of Delaware, and, as it is thought, the court of the district of Massachusetts* could not proceed with the case with greater convenience of the parties in interest. But general order 6 (89 Fed. v, 32 C. C. A. ix) provides:
“In case two or more petitions shall be filed against the same individual in different districts, the first hearing shall be had in the district in which th© debtor has his domicile, and the petition may be amended by inserting an. allegation of an act of bankruptcy committed at an earlier date than that first alleged, if such earlier act is charged in either of the other petitions; and in case of two or more petitions against the same partnership in different courts, each having jurisdiction over the case, the petition first filed shall be first heard, and may be amended by the insertion of an allegation of an earlier act of bankruptcy than that first alleged, if such earlier act is charged in either of the other petitions; and, in either case, the proceedings upon the other petitions may be stayed until an adjudication is made upon the petition first heard; and the court which makes the first adjudication of bankruptcy shall retain jurisdiction over all proceedings therein until the same shall be closed. In ease two or more petitions shall be filed in different districts by different members of the same partnership for an adjudication of the bankruptcy of said partnership, the court in which the petition is first filed, having jurisdiction, shall take and retain jurisdiction over all proceedings in such bankruptcy until the same shall be closed; and if such petitions shall be filed in the same district, action shall be first had upon the one first filed. But the court so retaining jurisdiction shall, if satisfied that it Is for the greatest convenience of parties in interest that another of said courts should proceed with the cases, order them to be transferred to that court.”
By this general order the rule is that in the case of petitions against an individual the first hearing shall be in the district of the domicile, while in the case of petitions filed against a partnership that first filed shall have priority of hearing, and that the court acquiring the whole jurisdiction shall determine whether the greater convenience of parties requires that one of the other courts should proceed with the cases. The order further provides that priority of adjudication in one of the courts enables it to “retain jurisdiction over all proceedings therein until the same shall be'dosed.” It will be observed that section 32 commands that a transfer of proceedings shall be conditional upon the convenience of parties, while the general order directs that the location of the domicile, or, in the case of a partnership, priority of filing the peti
But it is urged that a corporation is not an individual within the meaning of general order 6, and it is pointed out that the act itself makes the word “persons” inclusive of corporation. The word “persons” might have been used in the'first clause of the sentence, and cases of partnership have been excepted therefrom in an auxiliary clause. But the Supreme Court wished to draw a distinction between a single entity,, that could act or be acted against as an individual person, and a co-partnership, any one of whose partners could file a petition, or against any one of whose partners a petition could be filed. A corporation» acts individually as a unit, although its conduct is directed by individuáis acting together. In the same way suits, actions, and proceedings against a corporation are instituted against it as an inseparable whole. If it takes affirmative legal action, it acts as an entity. If the court affords relief against it, demanding payment of money, it alone, and not also those who own it, are liable for such payment; and in bankruptcy its liabilities cannot be extended to its members. But, while.a partnership is an entity, each partner may act and speak for it within recognized limits, may institute actions and proceedings against it, and, as its representative, or as embodying it, may be proceeded against. So “the court of bankruptcy which has jurisdiction of one of the partners may have jurisdiction of all of the partners and of the administration of the partnership and individual property.” Act July 1, 1898, c. 541, § 5c, 30 Stat. 547 [U. S. Comp. St. 1901, p. 3424], This quality of measurable divisibility and conjunction of individual and copartner
These views lead to the conclusion that the proceedings in this court should be stayed, and that the corporation appointed receiver in the Delaware district should be appointed ancillary receiver in this district, and that the receiver heretofore appointed in those proceedings should transfer to such other receiver all property of the bankrupt within his control upon payment of all expenses of administration in this district so far as it has proceeded.