In re Luxor Cab Mfg. Corp.

L. HAND, Circuit Judge

(after stating the facts as above). The record set up is in such form that we cannot forbear some comment upon it. It consists almost entirely of colloquy of counsel incorporated in bulk, out of which we are asked to disentangle the relevant juridical matter as best we can. The result is to confuse every one and dissipate the issues in a vague atmosphere of talk. We are at much difficulty to learn just what took place before the master, whose report merely finds that the three corporations were separate, while the very crux of the appellants’ position is that they were prevented from showing that they were identical, an extremely difficult issue at best, on which the plaintiff should be allowed the widest latitude. Just what the appellants offered to prove, whether that offer was in such form as to be cognizable by a court, or whether they were prevented from any proof by a ruling at the outset; all this is left for us to pick out amid a mass of argument, comment, and irrelevant discourse, of which the master should have purged the record before remitting it to the court. More judicial initiative must be shown, unless the combination of stenographer and cheap printing is wholly to submerge us in a flood of verbiage. It is only by the mere chance that the final position of the appellants, as set up in their last petition, is untenable, that we are able to dispose of the case without discharging a duty which is not the function of an appellate court.

Turning therefore to the pleading, it appears that the New York and Massachusetts corporations were mere names for the respondent, which owned all their property and controlled both their businesses. On this theory the decree of October 18, which put the property of the Massachusetts corporation into the custody of the receivers, also assumed possession of the assets of the respondent. However, on the same theory the decree of June 29 had already put its assets into the custody of the same receivers, when it appointed them receivers of the New York corporation. To succeed, the petitioners must aver that there were some assets covered by the decree of October 18 which that of June 29 did not reach. This might'indeed be true, if the New York and Massa^ehusetts corporations had a separate identity, but the petitioners do not, and indeed cannot, so assert. To do so would involve the paradox that, though the New York corporation and the respondent were identical, and so too the Massachusetts corporation and the respondent, the New York and Massachusetts corporations were separate persons.

Now each decree either went no further than it professed to go, and assumed possession of no more than those assets which were separately the property of the defendant named, or it took over the assets of the respondent under one of its aliases. But in that case the first decree took over all the assets, for the first alias was as good as the second and left nothing for the second decree to affect. Thus the decree of October 18 was merely a futile gesture, effected nothing, and could not be an act of bankruptcy.

The second act of bankruptcy is even more plainly untenable. If the corporations were several, the receivers had no warrant for seizing any of the respondent’s property, and they are responsible like any one else. Though the appellants may have to get judgment and secure their own receiver, they have their relief, but it will be against the receivers as tort-feasors and because of their conversion. Section 3 (a) (4), as amended by the act of 1926 (11 USCA § 21[a] 4), was not intended to make such wrongs acts of bankruptcy; like subdivisions 2 and 3 (11 USCA § 21[a] 2, 3), it was aimed at inequality of distribution among creditors, and the, phrase “other lien” is to be read ejusdem generis. The receivers may indeed have the status of creditors, when seeking to assert a debt from the respondent to their corporations, but the appellants assert, not that they have justified their possession on any such theory, but that they acted under a wrongful claim of title. Nobody can seriously maintain that an insolvent commits an act of bankruptcy when a third person converts his goods, and he does not recover possession within thirty days. Possibly the circumstances may have been such as to lead to the inference that the respondent had acquiesced in the conversion and that it was a mutual transaction, in effect a fraudulent transfer. That might indeed have been available as an act of bankruptcy, had it been alleged, but it was not, and it is too late now to amend. In re Fuller & McGee, 15 F.(2d) 294 (C. C. A. 2).

Order affirmed.