In re MODELL'S RADIO STORES, Inc. Ex parte CHILDS RADIO CO., Inc.

In re MODELL’S RADIO STORES, Inc. Ex parte CHILDS RADIO CO., Inc. Circuit Court of Appeals, Second Circuit. May 13, 1929. No. 308. S. Howard Imbrey, of New York City (Benjamin Lifshitz, of New York City, of counsel), for appellant. Strooek & Strooek, of New York City (I. B. Levine, of New York City, of counsel), for appellee. Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges. [MAJORITY — PEB CUBIAM.] PEB CUBIAM. The appeal involves only questions of fact, depending upon an especially intricate web of unsatisfactory evidence. It is conceded that the bankrupt bought merchandise of the claimant’s assign- or, and the amount of that account is agreed upon. It is not disputed, or, if so, the objection is only a gossamer, that the bankrupt had an offset because of advances made by it to fit up the assignor’s shop. The only-issue of substance is whether these advances were in turn repaid by the assignor’s check for $15,000 to the bankrupt’s order of October 27, 1927. Whether this was in payment for the advances, whether it paid for merchandise in whole or in part, whether it was in payment for George Modell’s stock in the claimant’s assignor, it is impossible to be sure. We cannot see any antecedent reason to prefer one possibility against the others. George Modell probably treated both corporations as his own and ignored their personalities, though he had no legal power to do so, since each had independent interests. As to the third possibility, it is true that, if the bankrupt owed him an amount equal to what he took by means of the check, he might, indeed, use it to pay for his shares. But the •testimony is vague and contradictory, and nobody can do more than guess what these devious dealings really were. Upon this appeal the appellant is faced with two difficulties: It has the burden of proof to show the payment; it has again the burden of showing that the District Court was wrong in not finding that it had carried that burden. We are in doubt about the first, and so cannot say that it was wrong for the District Court to share that doubt. Order affirmed.