In re Consumers World, 115-57
| Decision Date | 19 February 1958 |
| Docket Number | 215-57.,No. 115-57,115-57 |
| Citation | 160 F. Supp. 238 |
| Parties | In the Matter of CONSUMERS WORLD, Inc., in consolidation with Kormon Water Co., Inc., d/b/a Alan Sales Co., Debtors. |
| Court | U.S. District Court — District of Massachusetts |
James F. Selligman, Fall River, Mass., for appellant.
Ellis F. Brown, Boston, Mass., trustee.
Alfred Siegel, Boston, Mass., receiver.
Wasserman & Salter, Boston, Mass., for receiver.
This matter comes before the court on a certificate of the referee on a petition for review of an order entered by the referee in the course of proceedings for an arrangement under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq.
On June 21, 1955, Albert and Mildred L. Moss leased to Consumers World, Inc., the debtor, for a ten-year period a store in Fall River adjacent to a larger store also owned by them and leased to the Atlantic & Pacific Tea Co. The lease to the debtor contained a provision in paragraph 6 that "the lessors agree that no business shall be permitted, other than that presently conducted, on the entire premises owned by them as referred to above, including the leased area, which will conflict with the business of the lessee as presently to be conducted hereunder." The lease to A & P allowed the latter to sell any kind of merchandise without restriction, but the terms of this lease were not known to the debtor. In accordance with the provisions of the lease debtor paid to lessors the sum of $11,500, an amount equivalent to one year's rent, which was to be held by lessors as a security deposit, and eventually to be applied to payment to the tenth year's rent.
The debtor filed a petition for leave to disaffirm the lease and for an order for the return of the $11,500 security deposit. An order to show cause why the petition should not be granted was issued, returnable on April 5, 1957. Thereafter hearings were held on May 13, June 4 and June 14, 1957. On October 4, 1957, the referee entered an order granting leave to reject the lease and ordering the return of the security deposit. The lessors object to the latter part of the order and also move to remit the certificate to the referee for corrections of the record.
The first ground for objection is that the referee had no jurisdiction in a summary proceeding to order lessors to return the deposit. This contention must be rejected. A bankruptcy court has summary jurisdiction over money or property of the debtor held by a third party and deposited by the debtor as security. In Matter of Muntz TV Inc., 7 Cir., 229 F.2d 228, 231. In any case lessors failed to make timely objection to the summary jurisdiction of the referee as required by § 2, sub. a(7) of the Bankruptcy Act, 11 U.S.C.A. § 11, sub. a(7) as amended, which provides "* * * and where in a controversy arising in a proceeding under this Act an adverse party does not interpose objection to the summary jurisdiction of the court of bankruptcy, by answer or motion filed before the expiration of the time prescribed by law or rule of court or fixed or extended by order of the court for the filing of an answer to the petition, motion or other pleading to which he is adverse, he shall be deemed to have consented to such jurisdiction; * * *" The referee in his certificate states that no objection to the summary jurisdiction of the bankruptcy court was made at any time. Lessors point only to the fact that the question of jurisdiction was included in the statement of questions raised in lessors' brief filed with referee in...
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Medical Multiphasic Testing, Inc. v. Linnecke
...MMTI inferably no longer had reason to believe Any sublease of the property would be acceptable to Mrs. Linnecke. Cf. In re Consumers World, 160 F.Supp. 238 (D.C.Mass.1958). 2. The respondent contends, however, that MMTI remained liable for the rent so long as its possession of the leased p......
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