In re Gutman

• Decision Date: 08 May 1902
• Parties: In re GUTMAN et al.
• Court: U.S. District Court — Southern District of New York

114 F. 1009

In re GUTMAN et al.

United States District Court, S.D. New York.

May 8, 1902

Blumenstiel & Hirsch, for the motion.

David E. Grossman, opposed.

ADAMS District Judge.

This is a motion upon a petition by Robert A. Inch, formerly receiver and now trustee of the bankrupt estate, to restrain the prosecution of an action brought against him in a state court by Morris D. Kopple. The action is for the recovery of $800 damages alleged to have been caused to the plaintiff by the wrongful taking and carrying away from his possession of certain chattels which the plaintiff alleges were mortgaged to him on the 27th day of December, 1901, to secure a loan and thereafter duly taken possession of by him under the terms of the mortgage. The action was not brought against Inch in his official capacity, but merely demanded a personal judgment.

The defendant seeks the protection of this court upon the allegation that he took possession of the property by virtue of his appointment as receiver by this court, and that leave of this court has not been obtained to sue him. He also alleges that the alleged mortgagee consented that the receiver should take possession of the property and sell the same, provided that it realized more than the amount of the claim of $800, and the fund should be subject to a lien for that amount. The petitioner also alleges that the property realized more than the stipulated amount, was turned over by him as receiver, and now held by him as trustee subject to the order of the court. The plaintiff in the action opposes the motion, denying the consent as alleged.

The fact that the petitioner was a receiver of a court would not ordinarily afford him immunity for a tortious act, such as is alleged here (Curran v. Craig (C.C.) 22 F. 101; Barton v. Barbour, 104 U.S. 126, 134, 26 L.Ed. 672; Beach, Rec. Sec. 654); and even if he were sued for his official acts, being a federal receiver, his contention that leave of court would first have been obtained could not be sustained (24 Stat. 552, c. 373; 25 Stat. 433, 436, c. 866; Railway Co. v. Cox, 145 U.S. 593, 601, 602, 12 Sup.Ct. 905, 36 L.Ed. 829). But the statutes which permit such actions without leave of court provide that they should be subject to the general equity jurisdiction of the court in which the receiver was appointed, so far as the same shall be necessary to the ends of justice. The question here is whether the petitioner is entitled to invoke the equity powers of a bankruptcy court upon the facts as presented.

It appears that Gutman and Wenk were adjudicated involuntary bankrupts on the 4th day of January, 1902. On the next day the plaintiff Kopple took possession of the mortgaged property. The loan was not due at the time, and the justification for the act was alleged to be found in a clause in the mortgage to the effect that the mortgagee might take possession of the property at any time if he should deem the security afforded by the mortgage unsafe or at any risk, and sell the property according to law. It is evident that Kopple did not obtain legal possession of the chattels by his act. At the time of the filing of the petition and the adjudication in bankruptcy, the possession was in the bankrupt, and the trustees, to be subsequently appointed became vested with the title of the bankrupt as of the date of the adjudication (Bankr. Act. 1898, Sec. 70). The filing of the petition was in effect a caveat to all the world, and an attachment of all the bankrupt's property (In re Vogel, 7 Blatchf. 18, 20, Fed. Cas. no. 16,982; Bank v. Sherman, 101 U.S. 403, 406, 25 L.Ed. 866; Mueller v. Nugent, 7 Am.Bankr.R. 244, 22 Sup.Ct. 269, 46 L.Ed --; In re Krinsky (D.C.) 112 F. 972), and the property was constructively in the possession of the court when the plaintiff's alleged possession was obtained. It would seem clear that, as the plaintiff had no right of possession, there was no invasion of...