The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1901-03-15


Referee in Bankruptcy NanWormcr,
of this city, has just filed an opinion
with Judge Burlington, of the United
states district court, in which he sets
forth that a coal mining company is
engaged In trade, or a. mercantile pur-
suit within the meaning of the bank
ruptcy laws and can therefore be de-
clared an involuntary bankrupt.
The case is that brought by cer-
tain creditors OF the keystone Coal
company, of Pittston, to have it de-
Clared an involuntary bankrupt and
the amount involved is considerably
over Sl00O00. The company fought the
case vigorously before the referee; will
file exceptions to his opinion, and If
Judge Burlington decides against it,
will carry the case to the United
states Supreme court, the highest ju-
Gicial tribunal in the land.
Tie creditors, who are represented
by willard, Warren and Knapp. will,
it is understood, also carry the case up
If the district court rules against
them. The opinion of Referee Van
Wormcr in which he takes exception
to decisions rendered by several vest
ern judges ON the question, is as fol-
lows:
REFEREES OPINION
On the fifth day OF May, 1900, certain creditors
Of the Keystone Coal company filed petition
alleging that the corporation was inSolyent; that
it. had committed an act uf bankruptcy and that
it. be adiudgcd an involuntary bankrupt. TO
this petition the respondent dcmutrcd and de
MED the jurisdiction OF this court 10 declare it
hapl Fttt,t f,rt tls po,s hat .,,.1,
corporation AS the law concmplatcs under the
provisions relating TO involuntary blnkrupts.
This issue referred 10 me with instructions
20 report findings ot tact together with my con.
illusions OF the law. From the evidence taken
find that in 1sS0 William +. Dodge leased TO the
owners certain coal lands in Lulcrnc county Tor
the purpose of entering into and upon said Land
and mine, obtain, break, screen, prepare, take
away and dispose of all mcrchanahlc coal"
The consideration to he paid by Dodge depended
upon the quantity Of the different sizes Of MGR.
chantablc coal mined, sold, delivered carried
or transported from said land Dodge Subsc.
qucntly leased other coal lands under similar
conditions. II Is unnecessary to quote from the
provisions of these voluminos leases, except
that assent given to Dodge to make such
assignment of tho leases "as may be necessary
to vest legal title in the corporation that he
is TO organize for the purpose of working the
hereby dcmised premises" On Feb. %, lsGG,
application was made tor Incorporation OF the
Keystone Coal company which corporation, inter
ALA contains:
'Sccond-Sdid corporation IS formed for tho
purpose Of mining, preparing Tor market, ship
ping, selling, purchasing and otherwise dealing
in anthracite coal; and OF leasing, purchasing
and holding real estate connected herewith
APPLICATION APPROVED.
The application was approved by the governor,
aud letters patent accordingly issued. Dodge
assigned his leases TO this corporation, and by
virtue Of those contracts the keystone Coal com.
pdny acquired title TO its coal. Tho Erie Rail
road company and Robinson n Company, of
New York, purchased the coal mined by this
company until 1s9i. In that year the coal com.
pany entered into an agreement with Henry
Mcckcr for tho sale OF it, output OF coal, at
prices named in tho agreement. dependent upon
the sizes Of the coal shipped. The evidence dis,
closes that the coal company sold coal 10 its
employees and occasionally 10 other persons who
called for il at the breaker It also appears that
this company bought and sold mining lamps,
oil, coal, powder, soap, squibS, blasting bells,
pick.handlCs, aNc.hlndes, needles, hammers,
sCdgcs and some other articles used in operat
ing its business All these articles were sold To
its employees at a profit, the sales amounting TO
between three and four hundred dollars a month";
not including powder. The corporation bought
and sold TO its employees large quantities Of pow.
der; in 1895, 6,Gdj kegs; in 1896 G,j07 kegs in
1897, 7i32 kegs; in lSaS. 600 kegs, aud in 1892
1900 kegs. In 1897, l,j0O pounds of dynamite,
and in lS0s 400 pounds of dynamite. The COM
pany paid for this powder Sl.2j per kcg and
sold it to its employees at S2.75 per key. The
company attempts 10 show by evidence that this
large profit entered into the calculation by which
the wages OF its employees were determined; it Is
not a tact, however, necessary to the detcrmini
tiun of the question at issue; that it bought and
sold thousands Of pounds Of powder each year is
admitted Some evidence was introduced ior the
purpose OF connecting the Keystone Coal company
with the Ridgewood store company, which is a
partnership composed Of some Of the stockholders
OF the Keystone Coal company and conducting
a general retail store. But the evidence failed
TO show that the coal company was interested
in this store and il is irrelevant in determining
the vital question. Another fact appears, which
may he important, in determining whether or
not this corporation is engaged in trade or a
mercantile pursuit. 1t annually paid to the state
OF Pennsylvania a tax as a retailer OF mcrchlu.
disc under a statute imposing such tax upon
dealers.
Is n SUCH
With these facts before US, can it. be said
that the Keystone Coal company is such a cor
poration as the law declares may be idudgcd
a bankrupt. The question must be determined
by construction Of section 4, which provides
rs tolluWs. Any corporation engaging prluCl-
pally in manufacturing, trading, printing, pub
fishing or mercantile pursuits, may be adiudgcd
an involuntary bankrupt" The question OF who
i, trader or engaged in mercantile pursuit
has engaged the attention Of the courts Of both
this country aud England from an carly date
in constituting bankruptcy and insolvency laws
Their views are 50 widely divergent and 80 dc.
pendent upon the phrascologv Of the particular
statute considered to furnish no settled rule
Of construction, II /, not my purpose to at.
tempt analysis OF the earlier decisions in de.
tcrmining the question now prc,cntcd those de-
Cisions have been digcsod and presented 10 me
with great ability, aud the conccnsus ct opinion
Is, as stated by Bouvicr, that trader i "unc
Who makes IL business, TO buy merchandise or
goods and chattel- and 10 sell the same tor thc
purpose Of making profit. The Quantum OF
dealing is immaerll when an rtoution 60 deal
generally exists" Mercantile is defined as ebay.
ing TO do with trade or commerce; or of per.
tanning to merchants, or the traffic carried on
by merchants trading; commercial (Ccntury
Dictionary
Judge Brown says; "lJ signifies Tor the most
part the same thing a. the Wold trading, and
by mercantile pursuit is meant the business Of
buying and selling OF goods or merchandise or
dealing in the purchase and sale OF commoditic-." ."
with these definitions in mind, it would seem
that the character OF the Keystone Coal company
should hc determined with 10 great difficulty
In the first place, the contracts between tic
coal company and the owners OF the Land wryp
not contracts for tho purchase OF tine Land. Int
agreements to purchase coal supposed TO ho hc.
meath the surface, In Lillibrdge ". Iackawau.
ma Coal company, li3 Pa. :. DOB, IL /, held ,llt
the ",uriacc of land and the mineral, beneath i1