Court Opinion

ID: 8766547
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:27:31.743407+00
Date Added: 2024-06-11T17:01:55.248756
License: Public Domain

HOUGH, District Judge
(after stating the facts as above). The draughtsman of the bill has evidently felt that the exact situation presented to him for description was new, and different views of the pleading might be taken by men of equal experience. To my mind the question presented is this: Assuming it to be true, as asserted, that the Niagara AVoolen Company, though a different legal entity, was for business purposes but the alter ego of the American AVoolen Company; that goods consigned to the Niagara AVoolen Company were while in that company’s possession intended to he held for the benefit of the American AVoolen Company; that the affairs of the Niagara AVoolen Company were by the procurement and consent of the American AVoolen Company managed in large part by the bankrupt; that, being so *798managed, the Niagara Woolen Company permitted the bankrupts to trade and use the consigned stock of goods as their own to this extent, viz., to sell the same to customers of their finding or selection, to sell in the bankrupts’ own name, and to make collections likewise in their own name and deposit the proceeds of collection in whole or in great part to bankrupts’ own credit — do these allegations, if true, set forth a cause of action in the trustee duly appointed, based upon an alleged scheme to hinder, delay, and defraud creditors? The answer to this question is to be found in my judgment by solving one or two questions of fact, to wit: (a) Were the goods in question at the time of the transaction complained of the goods of the bankrupts? (b) If they were not as between the parties to the agreement the goods of the bankrupts, were they in the possession of the bankrupts under such circumstances as to estop the American Woolen Company and the Niagara Woolen Company from asserting ownership therein as against a trustee in bankruptcy ?
I think both of these questions are raised by the bill of complaint upon sufficient allegations of fact pleaded with sufficient artificiality. If this were a final hearing, and all the facts were admitted as pleaded, my answer to the question last propounded would be to direct judgment for complainant. Entertaining such view, the demurrer is overruled.