In re CM Piece Dyeing Co., 327.

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: MANTON, L. HAND, and SWAN, Circuit
• Citation: 89 F.2d 37
• Parties: In re C. M. PIECE DYEING CO., Inc. GEORGE et al. v. LEE et al. BUSHWICK BLDG. CO., Inc., v. SAME.
• Docket Number: No. 327.,327.
• Decision Date: 05 April 1937

89 F.2d 37 (1937)

In re C. M. PIECE DYEING CO., Inc.
GEORGE et al.
v.
LEE et al.
BUSHWICK BLDG. CO., Inc.,
v.
SAME.

No. 327.

Circuit Court of Appeals, Second Circuit.

April 5, 1937.

89 F.2d 38

Edward Siegel, of New York City, for Emanuel George et al. and the Bushwick Building Co., Inc.

Maurice F. Miller, of Brooklyn, N. Y., for Robert C. Lee, as receiver.

Horace G. Pender, of Brooklyn, N. Y. (Julius Zizmor, of Brooklyn, N. Y., of counsel) for trustee.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

L. HAND, Circuit Judge.

These appeals are from an order in bankruptcy which directed the trustee in bankruptcy to pay claims for use and occupation of two lessors whose premises had been occupied by the receiver between December 15, 1935, the date of his appointment, and March 6, 1936, when the lessors took possession. The premises were in two parcels, one owned by Emanuel George and others; the other, by the bankrupt, upon which the Bushwick Building Company held a second mortgage. The bankrupt's business does not appear in the record, but upon the premises were a number of pieces of heavy machinery, difficult and expensive to move, to which a number of persons laid claim. The nature of these claims does not appear except that apparently in most cases — perhaps all — they were for sums of money due under chattel mortgages, conditional sales, or the like. The petition — involuntary — was filed on December 15, and the receiver was at once appointed and took possession on the next day. George filed his petition on December 21, asking payment for use and occupation out of the estate, against the receiver as such. The motion was made returnable on January 3, 1936, but was adjourned to the tenth, and the receiver who, so far as appears, had done nothing meanwhile, procured the appointment of an attorney on the eighth. The attorney got an order to sell the property on the ninth, but because, as he says, the bankrupt did not file its schedules until January 23d, he did nothing to bring on the sale except to send out notices to creditors for February 11. Meanwhile against the protests of George he succeeded in getting the motion repeatedly adjourned and claimants kept appearing and demanding the machinery. No sale was had on February 11, and the matter drifted along until March 6, when the trustee took possession. He at once surrendered the premises to the lessors, and has realized out of the machinery only $700.

The Bushwick Company had made some futile demands upon the receiver for payment for the use of the premises covered by its mortgage, but did not move to have the receivership extended to its parcel at any time before February 4, when a referee in the foreclosure suit in the state court executed a deed to it. On the fourteenth it made a motion like George's, which on some day in May — undetermined — was referred to the referee in bankruptcy. (There is no similar order referring George's petition, but all parties assumed that the Bushwick order covered it and so did the referee.) He heard the parties at length and concluded that the receiver was at fault for not selling the machinery, or moving it to a storage warehouse, within one month after his appointment. He found the value of the use and

89 F.2d 39

occupation of each parcel; George's at $400 a month, and the Bushwick Company's at $500; and charged the trustee with one month's rent upon both, $900, and the receiver personally with one month and twenty days, $1,499.99. All parties petitioned to review this order, and the district judge modified it by throwing the whole payment upon the trustee, and exonerating the receiver. His notion was that though the receiver might have exercised bad judgment, yet, since all his conduct was in good...