In re Greater Pythian Temple Ass'n of New York

Decision Date29 April 1937
Citation19 F. Supp. 762
PartiesIn re GREATER PYTHIAN TEMPLE ASS'N OF NEW YORK.
CourtU.S. District Court — Southern District of New York

Deiches & Kaplan, of New York City, for debtor.

Zalkin & Cohen, of New York City, for National City Bank of New York.

PATTERSON, District Judge.

The debtor in reorganization filed a petition to compel the National City Bank to pay over the sum of $1,500 held by the bank in a "special account" for the debtor. The petition alleged that while the bank claimed a right to set off the account against a larger debt owed by the debtor to it, the account was held by the debtor in trust for one Rosenberg, to the bank's knowledge, and that the right of set-off did not cover such account. In its answer the bank denied knowledge that the special account was held in trust and asserted a right to apply the account against the larger claim owed to it by the debtor. The bank also disputed the jurisdiction of the court to grant relief by summary order. The referee to whom the matter was referred took testimony and reported that "the weight of evidence" was with the debtor, that the bank had notice of the trust character of the account at the time when it was opened. The question is whether a summary order to pay over the money should be made on the strength of the referee's report.

On the papers and other proof it is undisputed that the debtor owes the bank an amount far larger than the deposit in the special account. It is also undisputed that the deposit in the special account is in fact a fund held by the debtor in trust for another. The debtor received a check for $1,500 from one Rosenberg as security for payment of rent under a lease. This was the check with which the special account was opened, and the moneys collected on this check were the only moneys ever in the account. The disputed point is whether the bank was put on notice of the true character of the account when it was opened. In the debtor's behalf it is pointed out that the Rosenberg check has on its back the words "for security on lease." The bank denies that these words were on the check when it was deposited by the debtor. The writing is different from the writing on the face of the check and is unidentified. Goldfarb, the debtor's cashier, testified that he told Turner, an employee of the bank, that he wished to open an account with a check received as security on a lease, that he asked about a trust account that might draw interest, that Turner informed him that the bank would not accept an interest-drawing account from a corporation and suggested a special account; that he exhibited the lease to Turner and pointed out the clause dealing with security to be furnished by the lessee; that Barnes, an employee of the bank who was called over, also said that a trust account could not be opened. Goldfarb testified that the words "for security on lease" were on the check at the time, that he definitely recalled having seen them. In the bank's behalf, Turner testified that Goldfarb merely inquired whether the debtor might open an account in the...

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4 cases
  • Matter of Williams, Bankruptcy No. 79-04104-P
    • United States
    • United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — Eastern District of Michigan
    • 21 Octubre 1980
    ...271 U.S. 191, 46 S.Ct. 467, 70 L.Ed. 897 (1926); Warder v. Brady, 115 F.2d 89 (4th Cir. 1940); In the Matter of Greater Pythian Temple Association of New York, 19 F.Supp. 762 (S.D.N.Y.1937). See also 6 Collier on Bankruptcy, 14th ed., para. The need for this sort of analysis is eliminated b......
  • In re AM Townson & Co., 12997.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 5 Octubre 1960
    ...of the deposit it may apply the deposit to the overdrafts in the depositor's general account. In re Greater Pythian Temple Ass'n of New York, D. C.S.D.N.Y.1937, 19 F.Supp. 762, 764 concerned a debtor's "special account" prior to his bankruptcy but Judge Patterson's statement of the legal si......
  • In re Anton
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Eastern District of New York
    • 16 Octubre 1992
    ...(1990); In re Applied Logic Corp., 576 F.2d 952, 964-965 (2d Cir.1978); In re Goll, 8 F.2d 101 (S.D.N.Y. 1925); In re Greater Pythian Temple Ass'n, 19 F.Supp. 762 (S.D.N.Y.1937); In re Wilde, 85 B.R. 147, 150 (Bankr.D.N.M. 1988); see also, Commercial Nat'l Bank v. Stockyards Loan Co., 16 F.......
  • Cooper v. United States, K-5.
    • United States
    • Court of Federal Claims
    • 7 Junio 1937
    ......Supp. 761 H. Maurice Darling, of New York City, for plaintiff.         Joseph H. Sheppard, of ......

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