In re Columbia Shoe Co.

• Decision Date: 28 March 1923
• Docket Number: 157.
• Parties: In re COLUMBIA SHOE CO. v. SPIEGEL. KREISHER
• Court: U.S. Court of Appeals — Second Circuit

289 F. 465

In re COLUMBIA SHOE CO.

KREISHER v. SPIEGEL.

No. 157.

United States Court of Appeals, Second Circuit.

March 28, 1923

Petition to revise an order denying the application of the trustee to compel Spiegel to turn over certain moneys to the trustee. The petition of the trustee alleged that an involuntary petition in bankruptcy was filed in the Middle district of Pennsylvania on October 13, 1921, against Columbia Shoe Company, which was thereafter adjudicated a bankrupt, and that appropriate ancillary proceedings were taken in the District Court for the Southern District of New York; that at the time the petition was filed Ajax Shoe Company was indebted to the bankrupt in the sum of $3,057.90, and N. H Smith Company was indebted in the sum of $849; and that on October 15, 1921, Spiegel, with knowledge of the filing of the petition, collected from Ajax Shoe Company $1,954.12 and from M. H. Smith Co. $418.07, which he improperly retained. Spiegel, in an affidavit in opposition, did not deny knowledge of the filing of the petition, nor did he deny that he collected the amounts, supra, but insisted that he had the right to collect and retain the same.

Spiegel set forth that he was engaged in the leather business in New York City; that in March, 1921, he entered into an agreement with the bankrupt, whereby he agreed to extend credit to it in the sum of $25,000; that to effectuate the agreement the bankrupt gave him power to collect all sums due the bankrupt and to draw against the funds so collected; and that at the time of filing the petition in bankruptcy, the bankrupt was indebted to him in a sum exceeding $3,000. Spiegel's answering affidavit then concluded: 'Your petitioner collected the sum claimed by the trustee under the general agreement set forth above under date of March 21, 1921 (evidently meant to be March 25), and applied same upon the indebtedness of the bankrupt to him. ' The three papers annexed to and made part of Spiegel's affidavit, upon which he rested his right to retain the sums collected, are as follows:

Agreement of March 25, 1921.

'This arrangement, made between Edward Spiegel and David J Finkelstein. Edward Spiegel, of E. Spiegel, hereby agrees to extend credit to David Finkelstein, of the Columbia Shoe Company, up to $25,000, twenty-five thousand dollars, for leather to be bought from E. Spiegel & Co. at a market price to be agreed upon. The leather is to be shipped in installments of $5,000, more or less, at one time.

'David J. Finkelstein in turn agrees, for each installment of leather to be shipped to the Columbia Shoe Company, to forward shoes at an agreed market price if E. Spiegel & Co. see fit that they can sell them. If E. Spiegel & Co. do not take shoes in payment of the leather, then it is agreed that after the leather is worked up and the shoes are sold, the Columbia Shoe Company can either turn over these accounts, to whom the shoes are sold, to E. Spiegel & Co., or after the money is collected by the Columbia Shoe Company they are to turn over this money to E. Spiegel & Co. E.S.D.J.F.C.S. Co.'

Letter of Attorney.

'Know all men by these presents, that Columbia Shoe Company, by its duly authorized officers, doth hereby make, constitute, and appoint E. Spiegel & Co., of the city of New York, its true and lawful attorneys, for it and in its name to collect and receive all such accounts and moneys as may be due this corporation from its patrons in the city of New York, and when so collected to deposit the same in such bank, banks, or depositories as to our said attorneys may seem expedient, and to draw checks and drafts against said funds so to be deposited, and to do all lawful acts requisite for effecting the premises, and hereby ratify and confirm all that our said attorneys shall do therein by virtue of these presents.

'In witness whereof, the said corporation has caused to be set hereto its corporate name by the hand of its president, and to be hereto affixed its corporate seal, duly attested by its secretary, this twenty-seventh day of April, A.D. 1921.

Columbia Shoe Company,

'D. L. Finkelstein.'

Certificate.

'I C. D. Rupp, secretary of the Columbia Shoe Company, * * * hereby certify that at a meeting of the board of directors of said corporation, duly * * * held on the twenty-seventh day of April, A.D. 1921, the following resolution was unanimously adopted: 'Resolved, that the president and secretary of this corporation be and are hereby authorized, empowered, and directed to appoint E. Spiegel & Co., of the city of New York, attorneys in fact for this corporation to receive and collect all such moneys and accounts as may be due this corporation from patrons in the city of New York, to deposit said money in the name of and for the account of this corporation in such bank, banks,...