Court Opinion

ID: 8889247
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:48:00.8837+00
Date Added: 2024-06-11T17:07:06.532275
License: Public Domain

TIMBERS, Circuit Judge
(dissenting) :
Some nineteen years ago, a wise and comprehending judge, in construing Section 3a(5) of the Bankruptcy Act, had this to say:
“I do not think it is necessary to resort to dictionary definition of ‘appointment.’ It is not required that the transferee of the property be formally ‘appointed’ as ‘trustee’ by a ceremonial document referring to him as such. The method adopted to effect the transfer is immaterial. It is the end result that counts. Any action by one who is insolvent which effectively causes the transfer of his property to another for final liquidation purposes appoints the transferee a ‘trustee to take charge of his property’ under § 3, sub. a(5). By filing the petition for its dissolution the corporation ‘procured, permitted or suffered voluntarily * * * the appointment’ of such a trustee. Any other construction would defeat the objectives of the Bankruptcy Act and abort the broad powers of the courts of bankruptcy intended for the uniform administration of insolvent estates.” In re Bonnie *185Classics, Inc., 116 F.Supp. 646, 648 (S.D.N.Y.1953) (Weinfeld, J.) (footnotes omitted).
While Bonnie Classics is distinguishable on its facts from the instant case, nevertheless, in my view, the considerations noted there by Judge Weinfeld should lead to the same result here where a corporation has agreed to the appointment of a liquidator with the power to “take control of the business and property of the Corporation for the purpose of liquidating the business of the Corporation.”
The comprehensive legislative history set forth in the majority opinion does not compel the result reached by the majority. The language in the original Bankruptcy Act of 1898 relied on by the majority remained in the statute until 1926. At that point, a broad revision of the Act was effected, including the elimination of the requirement that the appointment of a receiver be by statute or judicial proceeding. 44 Stat. 663. While the majority correctly notes that the principal focus of the drafters of the amendment was on remedying an ambiguity regarding the preliminary requirement of insolvency, and that the elimination of the necessity of formal appointment was said to be simply a matter of change in phraseology, the majority overlooks the fact that if Congress truly had intended to limit the change to those goals, it surely need not have gone as far as it did. The result, as I see it, is that we are asked to find a narrow purpose behind an Act of Congress, despite the failure of Congress to demonstrate that narrow purpose in the statutory language through the use of drafting devices frequently employed. Where the effect of such a reading is to hold in favor of a party whose position relies on language expressly eliminated from the statute, and thereby to defeat a party whose position falls squarely within the remaining language, I should have thought that we would construe the amendment in the most sensible, rather than the narrowest, manner. As the Supreme Court said in Shamrock Oil & Gas Cop. v. Sheets, 313 U.S. 100, 107 (1941), if Congress had intended any other reading of the statute, “we can hardly suppose that it would have failed to use some appropriate language to express that intention.”
Finally, I think it should be pointed out that, despite the majority’s illuminating instruction on the definition of receivership, and its quite proper conclusion that the liquidator did not come within that definition, we are left with the possibility that the liquidator may qualify as a trustee. At least in the jurisprudence of bankruptcy,
“ ‘Trustee’ means much the same as ‘receiver’, the nomenclature varying in different states. The term is also intended, no doubt, to include liquidating agents generally, who, though performing much the same functions as receivers, may not be appointed by a court.” 1 Collier on Bankruptcy ¶ 3.-502, at 501 (14th ed. 1971) (latter emphasis added).
Cf. In re R. V. Smith Co., 38 F.Supp. 57, 62 (W.D.Okla.1941).
The issue on this appeal does not lend itself to easy resolution. The approach by the majority cannot be said to be an unreasonable one. I am unwilling, however, to reach a decision on the basis of language that Congress purposefully has removed from the statute, especially in the light of analysis as persuasive as that in In re Bonnie Classics, Inc., supra. I therefore respectfully dissent.