18 F.2d 1 (2nd Cir. 1927), 181, In re Independent Coal Corporation

Docket Nº:181.
Citation:18 F.2d 1
Case Date:March 07, 1927
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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18 F.2d 1 (2nd Cir. 1927)


Appeal of UPDIKE.

No. 181.

United States Court of Appeals, Second Circuit.

March 7, 1927

Shortly after the filing of the petition herein, Empire Coal Mining Company brought this reclamation proceeding, setting forth that on or about September 30, 1925, it agreed to sell and deliver to the bankrupt about 3,200 tons of coal, which (as was alleged) should be paid for 'in cash upon delivery.' The delivery was to be 'f.o.b. piers, to be loaded around October 5th, * * * approximately 2,200 tons at Port Reading, 1,000 at South Amboy,' New Jersey.

The bankrupt procured boats to go to the loading ports and get the coal. On October 7th one boat took 880 tons at South Amboy. On October 8th another one took 597 tons at Port Reading, and another one took on the same day at the same place 407 tons. Bills of lading were issued by the masters of the coal boats promising to deliver the coal to the bankrupt at New York, but at no particular place in that city.

The bankrupt sold the coal to the steamship Edison, which was lying at the Bush Terminal, Brooklyn, and the laden boats ultimately proceeded alongside that vessel. Delivery of coal from the South Amboy boat to the Edison was begun on October 8th and finished on the 9th. One of the Port Reading

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boats began delivery on the 9th and finished on the 12th, and the other boat from Port Reading began and finished delivery to the steamer on October 12th. This involuntary petition in bankruptcy was filed October 10, 1925, and a receiver was appointed on the afternoon of that day, shortly after the filing of petition. The money derived from the sale of the coal to the Edison became by agreement a special find and is the subject of this litigation.

Besides averring (as above) that the coal was to be paid for on delivery, the petition in reclamation charges that at the time said coal was sold and delivered the 'bankrupt was insolvent to its knowledge, and, so knowing its insolvency, concealed the same from the petitioner, and induced that petitioner to sell and deliver the coal with the intent and design on the part of said bankrupt not to pay therefor. ' Further matters of evidence will be referred to in the opinion. The court below allowed the reclamation and awarded the fund to petitioner, whereupon the trustee appealed.

Isadore Shapiro, Frank M. Swacker and Ambrose v. McCall, and Leonard Acker, all of New York City, for appellant.

Patterson, Eagle, Greenough & Day, of New York City (Charles D. Francis and Carroll G. Walter, both of New York City, of counsel), for appellee.

Before HOUGH, HAND, and MACK, Circuit Judges.

HOUGH, Circuit Judge (after stating the facts as above).

The sale is evidenced by a written contract, in the main a printed form, signed by Empire Company's New York agent (its main office being in Philadelphia) and Independent Company's treasurer. Agreement was that coal should 'be delivered...

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