121 F.2d 852 (2nd Cir. 1941), 324, Rochester Ropes, Inc. v. Scherl
|Citation:||121 F.2d 852|
|Party Name:||ROCHESTER ROPES, Inc., v. SCHERL et al.|
|Case Date:||July 10, 1941|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Harry J. Macklis, of Jamaica, N.Y., for appellant.
Allan D. Emil, of New York City (George Kossoy and Sidney O. Raphael, both of New York City, of counsel), for Trustee in Bankruptcy.
Arthur J. Homans, of New York City, for Park Avenue Woodworking Co., Inc., appellee.
Before SWAN, AUGUSTUS N. HAND and CLARK, Circuit Judges.
SWAN, Circuit Judge.
Peerless Elevator Company was adjudicated bankrupt upon an involuntary petition filed on September 14, 1939, Its receiver in bankruptcy passed on to the trustee a fund of $2,045 paid into court by Beechwood Construction Company as the balance due under a contract with the bankrupt for the installation of two elevators. To this fund several claimants asserted rights under assignments from the bankrupt. Earliest in date of execution was an assignment to Rochester Ropes, Inc. As between successive assignees of the same chose in action priority in point of time establishes priority of right, under the New York law, without regard to the date of notification to the debtor. Fortunato v. Patten, 147 N.Y. 277, 41 N.E. 572; Salem Trust Co. v. Manufacturers' Finance Co., 264 U.S. 182, 197, 44 S.Ct. 266, 68 L.Ed. 628, 31 A.L.R. 867. But for reasons hereafter to be stated the referee in bankruptcy to whom the several claims had been referred, disallowed the claim of Rochester Ropes, Inc., and the referee's order was confirmed by the district court. This is the order before us for review.
The appellant had had business dealings with the bankrupt for a number of years. On March 16, 1938 they made a written agreement pursuant to which the bankrupt was to assign accounts receivable to the appellant as security for past due indebtedness and for new indebtedness to be incurred by future dealings. The agreement provided that the assigned accounts were to remain at all times at a total of not less than $2,000, 'and as old accounts are paid off they are to be replaced by new accounts receivable within two (2) days after the old ones are paid off. ' It was further provided that any money, check or commercial paper received by the assignor in payment of an assigned account should be accepted 'as the property of' the assignee, and its receipt immediately reported; and the assignor...
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