Court Opinion

ID: 8773495
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:53:14.305512+00
Date Added: 2024-06-11T17:02:23.319372
License: Public Domain

CHATFIELD, District Judge.
In the present case the appointment of the receiver was not made immediately upon the filing of the petition, but after an investigation by the court, from which it could be determined whether there was absolute necessity for appointing such a receiver. This inquiry showed that the principal business of the corporation was that which is' commonly. known as a saloon, or the buying and selling of liquors, and incidentally furnishing food at certain hours of the day.
The petition in bankruptcy and the petition for the appointment of •the receiver both alleged that the bankrupt is engaged principally in trading and mercantile pursuits, to wit, the business of conducting a restaurant and café. It also appeared that the corporation against which the petition was filed was prepared to execute a consent to the *296bankruptcy proceedings, which was done upon the following day by a duly executed1 admission of the various allegations of the petition.
Under the decision in the Matter of Wentworth Lunch Co., 20 Am. Bankr. Rep. 29, 159 Fed. 413, 86 C. C. A. 393, it is held that “a trader is one who buys to sell again, a definition which might apply to a saloon, but not to a restaurant”; and, further, the Circuit Court of Appeals in that opinion holds that the word “mercantile” is not broad enough to cover the business of keeping a restaurant for the cooking and selling of food. Inasmuch as this case is the latest and the controlling decision upon the question, it is necessary to determine in the present instance what the principal business of this particular corporation was, if there is any doubt about the matter. The 'question of what business the alleged bankrupt was principally conducting is a «determination of fact. The classification of that business, under the statute, is one of law. The creditor, may amend his petition in certain cases.
But, assuming that the alleged bankrupt had filed a demurrer, thereby admitting the allegations of the petition, that it was engaged principally in “mercantile pursuits, to wit, the business of conducting a restaurant and café,” there niight be some question under the decision in the Wentworth Case, supra, whether the petitioning creditors should be allowed to amend their petition, or to give proof of the actual facts. But in a case where the alleged bankrupt has not contested the jurisdiction of the court, but where one creditor has by-demurrer attacked merely the sufficiency of the petition, and where the court has appointed a receiver-upon facts appearing to give jurisdiction, it would not seem that the petition should be dismissed, thus making it appear that a receiver was appointed in a case over which, on the face of the papers, the court should not have assumed, jurisdiction. Such a ruling would allow a creditor to take advantage of the language of the particular allegation, which had seemingly been cured in the proceedings themselves, and which would not be available to the bankrupt under the circumstances.
The demurrer will be overruled, and the demurring creditor may, if he wishes to raise the question of fact, interpose an answer, upon which heáring can be had immediately, or the petitioning creditor may amend his petition to conform with the facts shown on the application for the appointment of a receiver, and the creditor may then answer that petition, if he sees fit.

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