In re Gadansky, 65-B-876.
| Decision Date | 29 December 1965 |
| Docket Number | No. 65-B-876.,65-B-876. |
| Citation | 249 F. Supp. 114 |
| Parties | In the Matter of Joseph GADANSKY, Bankrupt. |
| Court | U.S. District Court — Eastern District of New York |
Wolinsky & Wolinsky, College Point, N. Y., for bankrupt, Melvin Wolinsky, College Point, N. Y., of counsel.
Abraham S. Hittner, Brooklyn, N. Y., for creditor Beneficial Finance Co. of New York, Inc.
On August 27, 1965, Joseph Gadansky filed a petition and schedules in bankruptcy, including Schedule A-3 listing Beneficial Finance Co. of New York, Inc. (Beneficial) as a creditor, whose claim was unsecured in the sum of $571. On November 5, 1965, Beneficial served a summons and complaint upon the bankrupt in an action in the Civil Court of the City of New York, County of Kings, to recover the sum of $496.26, and on November 18, 1965, the bankrupt applied to this Court for an order restraining Beneficial from prosecuting said action in the Civil Court. On November 19, 1965, the Referee in Bankruptcy issued a certificate of discharge in bankruptcy and thereafter, on December 10, 1965, this application came on to be heard.
The applicable sections of the Bankruptcy Act are 14(c) (3), 11 U.S.C.A. § 32(c) (3), and 17(a), as amended, 11 U.S.C.A. § 35(a). The latter section provides, in part: "A discharge in bankruptcy shall release a bankrupt from all of his provable debts" except, among others, liabilities for obtaining money or property by false pretenses or false representations. Section 14(c) (3) provides, among other things, that the Court shall grant a discharge unless satisfied that the bankrupt while engaged in business as a sole proprietor, partnership, or as an executive of a corporation, obtained for such business money or credit by means of a materially false statement in writing. Since in this case the bankrupt was not engaged in a business as a sole proprietor or otherwise, he apparently would have been able to obtain a discharge even though he had obtained money by false pretenses, but in that event he would still remain liable for a debt which had been so incurred because it was not discharged.
The complaint in the Civil Court action alleges that "this is an action for money obtained by false pretenses or false representations and was, therefore, not dischargeable in bankruptcy". In his affidavit the attorney for the bankrupt admits that Beneficial's claim is predicated upon fraud
It is true that Beneficial, with full knowledge of the bankruptcy proceedings and all facts which it claims would preclude the discharge of the bankrupt's debt, failed to file a claim but instead sought its remedy in a nonbankruptcy tribunal in the Civil Court of the City of New York. Only under special and unusual circumstances, which are not present here, may the bankruptcy court entertain an ancillary bill enjoining a pending action in the State court upon a claim which could have been adjudicated in the bankruptcy court. See Local Loan Co. v. Hunt, 1934, 292 U.S. 234, 54 S.Ct. 695, 78 L.Ed. 1230. The character of a claim is determined by plaintiff's pleading. In the State court the bankrupt is free to plead his discharge and according to an array of authorities that court is bound to consider the plea and make its own determination.
As far as debtors under the old law and business debtors under the present law are concerned, the creditor victim of a fraudulent debtor can always...
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First Nat. Bank v. Haymes
...to enforce payment of a debt or collection of a judgment. A recent case wherein this issue presented itself is In Matter of Gadansky, Bankrupt, 249 F.Supp. 114 (Dec. D.C.1965), in which the bankrupt sought a stay in the Federal court of the Eastern District of New York to prevent a creditor......
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In re Tel-A-Sign, Inc., 17016.
...3 See In re Alvino (2d Cir., 1940), 111 F. 2d 642; In re Redwood Furniture Company (W.D.N.C., 1965), 248 F.Supp. 228; In re Gadansky (E.D.N.Y., 1965), 249 F.Supp. 114. 4 Ibid, note 3, and Greenfield v. Tuccillo (2d Cir., 1942), 129 F.2d 854; In re Armour (7th Cir., 1951), 186 F.2d 503; In r......
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...his only opportunity to enforce his complaint is in the State Court. See In re Bell, E.D.Va.1962, 212 F.Supp. 300; Matter of Gadansky, Bankrupt, D.C., 249 F.Supp. 114, 115. The question which must be decided in this Court is whether the judgment of the City Court of the City of Middletown, ......
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In re Courbat
...300 (E.D.Va. 1962). Beneficial sought the only available forum in which its claim might be completely enforced. See in re Gadansky, 249 F.Supp. 114 (E.D.N.Y.1965). The petitioners argue that the demand for judgment against Kenneth in the fraud action is the same as the demand against the de......