Butterworth v. Degnon Contracting Co.

• Citation: 214 F. 772
• Decision Date: 07 April 1914
• Docket Number: 245.
• Parties: BUTTERWORTH v. DEGNON CONTRACTING CO.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

214 F. 772

BUTTERWORTH v. DEGNON CONTRACTING CO.

No. 245.

United States Court of Appeals, Second Circuit.

April 7, 1914

Culver & Whittlesey and Walter Gordon Merritt, all of New York City for plaintiff in error.

Parker & Aaron and Herman Aaron, all of New York City, for defendant in error.

Before LACOMBE, COXE, and WARD, Circuit Judges.

COXE Circuit Judge.

The plaintiff is the receiver of the Gilbert Transportation Company, a Connecticut corporation with its principal office at Mystic in that state. Its business at all times was carrying freight by water and it owned and operated a large number of vessels for that purpose. The plaintiff, by virtue of his appointment dated October 5, 1909, was authorized to take possession of and manage all the company's vessels and property and to continue the conduct of its business. Between October 5, 1909, and December 30, 1909, the plaintiff, as such receiver, transported on the company's vessels a large quantity of stone from Maine and discharged the same at places designated by the defendant, which was engaged in constructing the Cape Cod Canal at Barnstable Bay Mass.

These services were, it is alleged, reasonably worth $8,797.70, for which sum judgment is demanded. The contract under which this stone was delivered and these services were rendered was not made by the plaintiff. When he was appointed receiver he found the contract with the defendant company partly executed and the question immediately arose whether, as receiver, it was his duty to assume or disaffirm it. It was impossible to reach a conclusion upon this question from the data then on hand. Consequently the receiver, upon the advice of counsel made 15 deliveries of stone between October 5 and December 30, 1909, when, being convinced that the contract was not a profitable one, he wrote on January 25, 1910, notifying the defendant that he, as receiver, did not regard the contract as a desirable asset and gave formal notice that he would not assume or become responsible for it. It seems to us that he pursued the proper course. On taking possession as receiver he found a contract which might develop into an exceedingly valuable asset. Had he repudiated it, without investigation he would have been guilty of a clear dereliction of duty. He was in duty bound to proceed with the contract if it were beneficial to the estate administered by him and to abandon it if not beneficial. He had a...