In re GL Miller & Co.

Citation45 F.2d 115
Decision Date10 November 1930
Docket NumberNo. 36.,36.
PartiesIn re G. L. MILLER & CO., Inc. Appeal of INDEPENDENCE INDEMNITY CO.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

R. A. Mansfield Hobbs, of New York City (Samuel Lewis, of New York City, of counsel), for appellant.

Goldmark, Bennitt & Colin, of New York City (Godfrey Goldmark, of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

SWAN, Circuit Judge (after stating the facts as above).

The appellant's original petition sought reclamation of sums of money paid to the bankrupt by "mortgagors, bondholders or other persons" for specific purposes. It charged that such sums had come into the hands of the trustee in bankruptcy and were impressed with a trust to be used for the purposes specified. There were three classes of items: (1) Sums totaling $697.50 paid to the bankrupt for the purpose of paying "premiums on bonds issued by the petitioner at the request of said G. L. Miller & Company," guaranteeing payment of principal and interest of certain first mortgage bonds; (2) a sum of $325 paid to the bankrupt for the purpose of paying interest due August 15, 1926, on "Castle Hill" bonds owned by appellant; (3) sums in an amount unascertainable without an audit of the bankrupt's books, paid to the bankrupt for the purpose of paying principal or interest of mortgage bonds guaranteed by appellant. The relief asked was payment to appellant of items 1 and 2, and, as to item 3, payment to appellant or to the bondholders to whom appellant might be liable under its guaranty. Thus it is apparent that appellant sought as owner to trace the first two items and sought as surety of certain mortgagors to trace money belonging to the guaranteed bondholders. Hence the petition, after dismissal as a reclamation claim, stood as a general claim asserting, with respect to items 1 and 2, an indebtedness to the appellant based on the bankrupt's failure to pay over money received for appellant's account, and, with respect to item 3, an indebtedness to bondholders based on the bankrupt's failure to pay over money received for their account.

By stipulation, the general claim as to premiums (item 1) was allowed in the sum claimed $697.50, and was disallowed as to "Castle Hill" interest, item 2. There was no stipulation with respect to the disposition of the general claim as to indebtedness to guaranteed bondholders, item 3. Under section 57i of the Bankruptcy Act (11 USCA § 93(i), if such bondholders failed to prove their claims, the appellant as guarantor of the bonds was entitled to make proof in the names of the bondholders. The original petition set forth neither their names nor the amounts due them. Whether such facts could be added by amendment after expiration of the statutory six months for proving claims, we need not now consider, because the proposed amendment, refusal of which is the sole error assigned, contains no reference to any such indebtedness; nor is any contention presented that appellant should have been permitted to make proof in the right of any guaranteed bondholder.

The indebtedness asserted in the proposed amendment is based upon a written agreement made in May, 1925, by which the bankrupt agreed to indemnify appellant against expense or liability it might incur by issuing bonds or guaranties at the request of the bankrupt. It is then alleged that appellant thereafter, at the bankrupt's request, guaranteed payment of principal and interest of various mortgage bonds sold through the bankrupt, and that certain mortgagors defaulted, and appellant had been obliged to make good their defaults to the extent of several hundred thousand dollars, the details of such defaults and of appellant's payments under its guaranties being set out in extenso.

It is clear that this is an entirely different cause of action from that alleged in the original claim. The obligation there asserted was for money had and received by the bankrupt for the use of appellant or of persons to whose rights appellant was subrogated. The obligation now asserted is upon an express agreement of indemnity...

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