In re Gubelman

• Decision Date: 07 December 1925
• Docket Number: No. 52.,52.
• Citation: 10 F.2d 926
• Parties: In re GUBELMAN et al.
• Court: U.S. Court of Appeals — Second Circuit

10 F.2d 926 (1925)

In re GUBELMAN et al.

No. 52.

Circuit Court of Appeals, Second Circuit.

December 7, 1925.

Brodek & Raphael, of New York City (Charles A. Brodek and Borris M. Komar, both of New York City, of counsel), for appellants.

Rosenberg & Ball, of New York City (George G. Ernst and Ralph F. Colin, both of New York City, of counsel), for appellee.

Kellogg, Emery, Inness-Brown & Cuthell, of New York City (Henry G. Hotchkiss, of New York City, of counsel), amici curiæ.

Before ROGERS, MANTON, and HAND, Circuit Judges.

ROGERS, Circuit Judge.

This is an appeal from an order dismissing a reclamation claim of copartners doing business as international bankers and maintaining a banking house in the city of Budapest, Hungary, under the firm name of N. Latzko & A. Popper, and on appeals in such a proceeding this court reviews both findings of fact and conclusions of law.

On June 15, 1923, an involuntary petition in bankruptcy was filed in the United States District Court for the Southern District of New York, praying that the firm of Knauth, Nachod & Kuhne be adjudged bankrupt and they are hereinafter referred to as the bankrupts. A temporary receiver was appointed and qualified, and the receivership was extended for each individual member of the copartnership, and the receiver entered into possession of the property of the alleged bankrupts.

The bankrupts were engaged in business as international bankers and maintained a banking house in the city of New York. They acted as the New York correspondents of the Budapest banking house of N. Latzko & A. Popper, the petitioners. The nature of the dealings between the two banking houses involved the transmission of funds by the Budapest house to the New York house, or the delivery by the Budapest house to the New York house of evidences of debt which were collected by the latter and placed to the credit of the former, from which account payments were made from time to time by the New York house upon order or request of the Budapest house.

There was no express agreement that evidences of debt, so forwarded to the bankrupts, were to be credited upon their receipt and before collection as a deposit of cash. Neither was there an express agreement that upon the receipt of such evidences of debt by the New York house the Budapest house should have the right to draw against the fund prior to its collection. But there was no agreement that the Budapest firm could not draw against such evidences of debt before their collection. They simply did not as a matter of fact do it. The allegations in the petition make this clear and are found in the margin.¹

In the determination of the questions which are involved it is important to keep in mind the date on which the trustee of a bankrupt's estate becomes vested with the title to the estate. Section 70a of the Bankruptcy Act (Comp. St. § 9654) provides that "the trustee of the estate of a bankrupt, upon his appointment and qualification * * * shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt; * * * (5) Property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him. * * *"

And Remington on Bankruptcy (3d Ed.) vol. 3, § 1191, states that the above section of the Bankruptcy Act vests all the property in the trustee, which, prior to the filing of the petition, the bankrupt could by any means have transferred, or which might have been levied upon and sold under judicial process against him.

In Everett v. Judson, 228 U. S. 474, 479, 33 S. Ct. 568, 569 (57 L. Ed. 927, 46 L. R. A. N. S. 154), the court said: "We think that the purpose of the law was to fix the line of cleavage with reference to the condition of the bankrupt estate as of the time at which the petition was filed and that the property which vests in the trustee at the time of adjudication is that which the bankrupt owned at the time of the filing of the petition." And this doctrine is reasserted in White v. Stump, 266 U. S. 310, 313, 45 S. Ct. 103, 104 (69 L. Ed. 301). In the case last cited, referring to the date when the petition is filed, the court said: "The bankrupt's right to control and dispose of the estate terminates as of that time, save only as to `property which is exempt.'"

The petition for reclamation in this case alleged that the involuntary petition in bankruptcy was filed on June 15, 1923, at 10:30 p. m., with the District Judge, and that on the same day the temporary receiver was appointed, and that on June 16th he duly qualified, filed his official bond, and entered into possession of the property of the alleged bankrupts. It then alleged that on June 16, 1923, at 9:30 a. m., the involuntary petition in bankruptcy was duly filed in the office of the clerk of the District Court. The receiver filed an answer to the petition, in which he denied various allegations contained therein, but he did not deny the allegation that the petition in bankruptcy was filed in the clerk's office on June 16, 1923, at 9:30 a. m.

At the hearing on the reclamation petition before the special master, the attorneys for the claimant and those for the trustee for the bankrupts stipulated certain matters, and "agreed that throughout the petition the reference to `the day said petition in bankruptcy was filed against said K., N. & K.,' or any similar allegation, shall mean only `June 15, 1923' (this refers particularly to paragraphs eighth, ninth, tenth, eleventh, and thirteenth)."

The paragraphs thus referred to are those which contain the allegations as to the time when the three checks herein involved were delivered, credited, and collected, and that when the petitioners caused the checks to be delivered to the bankrupts for collection and deposited to the petitioners' account they did not know of the bankrupts' insolvency, and also that when they caused the checks to be delivered to the bankrupts they had a credit balance with the said bankrupts amounting to several thousand dollars, and were not then and have not been at any time since indebted to the bankrupts or to the receiver.

This stipulation as to the meaning of "the day said petition in bankruptcy was filed" cannot have the effect of a determination binding upon this court upon the question of the time when the petition was legally filed, so as to determine the rights of the parties as affected thereby. Neither do we understand that the parties meant anything more than that the court should understand that the allegations, in so far as they refer to the occurrence of an act on the day when the petition was filed, referred to June 15, 1923. And we hold that the petition was filed, not on June 15th, when it was presented, at 10:30 p. m., to the District Judge, but on June 16, at 9:30 a. m., when it was filed in the clerk's office.

The word "filed" has not been defined by Congress. It has, however, a well-defined meaning. It signifies the delivery into the actual custody of the proper officer, designated by the statute, and whose duty it is to keep the records of the court. It carries with it the idea of permanent preservation of the thing as a public record. A paper is not filed by presenting it to the judge. He has no office in which papers are filed and permanently preserved. A paper in a case is not filed until it is deposited with the clerk of the court, for the purpose of making it a part of the records of the case. See United States v. Lombardo, 241 U. S. 73, 76, 36 S. Ct. 508, 60 L. Ed. 897; Laser Grain Co. v. United States, 250 F. 826, 831, 163 C. C. A. 140; Emmons v. Marbelite Plaster Co. (C. C.) 193 F. 181; In re Von Borcke (D. C.) 94 F. 352.

In the case under consideration the claim is based upon three checks: (1) A cashier's check of the Irving Bank-Columbia Trust Company, dated June 14, 1923, for $3,000. (2) A cashier's check of the National City Bank of New York, dated June 15, 1923, for $1,294. (3) A check of Goldman, Sachs & Co., dated June 15, 1923, drawn on the Bank of America, for $15,000. We shall consider them in the order named.

The $3,000 Check. — This check may be found in the margin.² The check did not indicate on its face that it was for the account of the petitioners. But the bankrupts on June 14th, the day the check was dated, and the day on which the bankrupts received it, gave to the Irving Bank-Columbia Trust Company a receipt in which they stated the check was received "for account of N. Latzko & A. Popper, Budapest." The special master held this indicated that the bankrupts undertook to collect the check as an agent for Latzko & Popper. He held that the proceeds, when collected, would have been the property of the Budapest house, were it not for the allegation in the petition that the petitioners caused the Irving Bank-Columbia Trust Company, who drew the check, to deposit it for the account of the petitioners with the bankrupts. He thought, therefore, that when the check was so deposited and credited and collected, all prior to the filing of the petition in bankruptcy, the bankrupts had become debtors to the petitioners, and the proceeds of the check amounted to a debt due from the bankrupts to them.

This check was credited by the bankrupts to the claimants' account on June 14, 1923, the day before the petition in bankruptcy was presented, and on the same day that the bankrupts credited the check to the claimants' account they indorsed the check to the American Exchange National Bank, and that bank on the same day credited the bankrupts with the amount of the check. The check was collected by the American Exchange National Bank through the New York Clearing House on June 15, 1923. This was the day the petition in bankruptcy was presented to the District Judge, though prior to the filing of the petition.

The District Judge, in his opinion confirming the special master's report, states that this...