In re WORTH LIGHTING & FIXTURE CO., Inc.

292 F. 769 | S.D.N.Y. | 1923

LEARNED HAND, District Judge.

The business of the claimant did not include, certainly in this instance, “discounting bills, notes or other evidences of debt.” The accounts for goods sold, which the bankrupt assigned to it, were not “evidences of debt.” They were dioses in action arising from sales of goods contained on the books of the bankrupt. What the statute means is commercial paper, which may-pass from one to another, bearing the signature of the debtor. The bankrupt had none such, and assigned none such. Besides, it did not discount the accounts. Discounting is getting the present value of the debt; i. e., its face, less interest. This the bankrupt did not do. It kept the equity in the accounts above its own debts, and if these should turn out to be any the claimant would be accountable.

By no conceivable theory is this within any phase of section 22 of the New York General Corporation Law. The claimant is doing a business precisely like a pawnbroker, except that the pawns are not chattels.

Report confirmed.