In Re Industrial Sapphire Mfg. Co., 10095.
| Decision Date | 18 May 1950 |
| Docket Number | No. 10095.,10095. |
| Parties | In re INDUSTRIAL SAPPHIRE MFG. CO., Inc. |
| Court | U.S. Court of Appeals — Third Circuit |
Charles M. Solomon, Philadelphia, Pa., for appellant.
Bertram Bennett, Philadelphia, Pa., for appellee.
Before MARIS, GOODRICH and McLAUGHLIN, Circuit Judges.
The trustee in bankruptcy of Industrial Sapphire Manufacturing Company, Inc., appeals from the disposition by the United States District Court for the Eastern District of Pennsylvania of his petition for an order directing Industrial Sapphire Corporation to turn over certain assets of the bankrupt.
The bankrupt was a New York corporation engaged in the manufacture and sale of phonograph needles and jewelry in Flushing, New York, until the latter part of February, 1948 when the lease on its plant expired. The company thereupon decided to move its operations to Quakertown, Pennsylvania, and this was accomplished at the end of that month. The operations of the company had resulted in losses and substantial sums of money had been advanced to it by Martha L. Haines, wife of its president, Joseph W. Haines. Following the removal of the company to Pennsylvania Mrs. Haines declined to advance any more funds to it. Haines thereupon caused the incorporation under the laws of Pennsylvania of Industrial Sapphire Corporation which on April 1, 1948 took over and continued the manufacturing operations of the old company.
The referee found, and we accept the finding as did the district court, that the production end of the business was all that was taken over by the new corporation and that it was the intention of Haines as president of the old company to proceed in its behalf to collect its accounts receivable and to pay off its obligations pro rata as far as possible. In carrying out this intention he used the bank account of the old company from April 1st to May 12th when the new corporation opened a bank account after which date he used the bank account of the latter for the deposit of receipts and the payment of obligations of both companies. Records were kept of all the transactions, however, with the intention that an account should ultimately be stated between the old company and the new corporation and that the balance shown thereby should be settled. Operations proceeded in this manner from April 1 to July 20, 1948 when, two judgment creditors of the old company having attached certain of its accounts receivable, the old company filed a voluntary petition in bankruptcy.
Thereafter the trustee in bankruptcy filed a petition seeking an order directing Industrial Sapphire Corporation to turn over the machinery, equipment, furniture and fixtures which it had taken over from the bankrupt company and to pay the value of the other assets alleged to have been taken over together with the reasonable value of the use and occupation thereof from April 1st to the time of their turn over. At about the same time Mrs. Haines filed a petition for leave to institute legal proceedings under a chattel mortgage of the machinery, equipment, furniture and fixtures which she held as assignee. The referee in bankruptcy to whom the proceeding was referred granted Mrs. Haines' petition for leave to enforce her chattel mortgage. His order was confirmed by the district court and the action of the district court has this day been affirmed by this court. 182 F.2d 589. Therefore, the action of the referee in refusing to direct the new corporation to turn over the mortgaged chattels need not be further discussed.
After full hearings the referee determined that the value of the other assets of the bankrupt company which were taken over by the new corporation was $18,124.55 and that the rental due the trustee for the use by the new company for the fixed assets was $75.00 per month for 11 months totaling $825.00. By error the referee included the...
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White v. Murtha
...debtor in possession and subsequently paid by the Pension Fund, are properly allowed. We hold that they are. See In Re Industrial Sapphire Mfg. Co., 3rd Cir. 1950, 182 F.2d 591. The appropriate amount of such set-offs cannot be and is not determined on the basis of the record before us. A d......
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White v. Murtha
...debtor in possession and subsequently paid by the Pension Fund, are properly allowed. We hold that they are. See In Re Industrial Sapphire Mfg. Co., 3rd Cir. 1950, 182 F.2d 591. The appropriate amount of such set-offs cannot be and is not determined on the basis of the record before us. A d......
- In re Industrial Sapphire Mfg. Co.