PHILPOT v. O'BRION et al. In re H. J. QUIMBY FREIGHT FORWARDING CO., 126 F. 167

PUTNAM, Circuit Judge. This appeal depends on the effect and application of

section 4b of the bankruptcy statute of 1898 (Act July 1, 1898, c. 541, 30 Stat. 547 [U. S. Comp. St. 1901, p. 3423]), as amended by the act of February 5, 1903, c. 487, 32 Stat. 797 [U. S. Comp. St. Supp. 1903, p. 411]. The District Court dismissed a petition praying for an adjudication against the H. J. Quimby Freight and Forwarding Company, a corporation, on the ground that it was not “engaged principally” in any business specified therein. The petitioning creditors appealed to us.

The corporation was chartered “for the purpose of transacting the business of a common carrier of property and persons.” Passing by the question whether the court in bankruptcy can take cognizance of ultra vires transactions of corporations, the case becomes one merely of fact, as to which the District Court found against the appellant. Of course, in view of the charter, the burden rests on them.

There is sufficient evidence that the corporation did to some extent •engage in trading, and in letting of horses and wagons; -but, even if we were to assume that such letting is trading within the meaning of the bankruptcy statutes, the evidence, though somewhat uncertain, would not sustain the proposition that the corporation made this its principal business.

Even the referee, who recommended that the corporation be adjudged bankrupt, found only that it was extensively engaged in trading, thus falling short of the statutory word “principally.” On any view, the proofs are not sufficiently persuasive to justify us in reversing the District Court on a mere question of fact. The decree of the District Court is affirmed, and the appellees recover the costs of appeal.