In re Lesser
| Decision Date | 23 March 1900 |
| Citation | 100 F. 433 |
| Parties | In re LESSER et al. |
| Court | U.S. District Court — Southern District of New York |
Anderson & Anderson, for trustee in bankruptcy.
Stickney Spencer & Ordway, for judgment creditors.
Henry V. Rothschild, for Stieglitz & Ballin.
This is an application to the court by a trustee in bankruptcy of Lesser Bros. upon an order directing Metcalf Bros. & Co. judgment creditors of the bankrupts, to show cause why further proceedings by them upon a judgment creditors' bill, pending in the supreme court of the state and seeking to have applied to their judgment certain assets of the bankrupts fraudulently conveyed, should not be stayed. A temporary injunction was granted until the hearing and decision of this motion. The facts are somewhat complicated and the dates of the several proceedings, as well as the kind of assets affected, are important.
On October 22 and 29, 1896, Metcalf Bros. & Co. obtained judgments against the bankrupts in the supreme court of the state for the sums of $930.21 and $2,547.80 respectively, on which executions were issued and returned unsatisfied. Shortly before the entry of those judgments, viz., on October 2, 1896, Lesser Bros., being insolvent, confessed three judgments amounting in the aggregate to upwards of $18,000 upon which executions were on the same day issued and levies made by the sheriff upon all the bankrupts' leviable property, consisting of a stock of clothing material, store furniture and fixtures. They also on the same day executed two assignments of a large amount of book accounts due the firm, and a deed of conveyance of premises 495 Manhattan avenue and an assignment of the lease of premises 306 West Fifty-fifth street. On the same day also a partnership action was commenced for the dissolution of the firm, and on the same day, by consent of the parties, Morris Moses was appointed receiver of the firm, and afterwards, at the instance of some creditors, James T. Franklin was added as joint receiver. Within a few days thereafter numerous actions of replevin were brought against the firm by creditors to recover back goods claimed to have been sold under fraudulent representations. The claims of the creditors to the goods were so conflicting that an action in equity was brought against them all by the partnership receivers in the state court, and an injunction obtained against prosecuting the replevin suits, and an order was made on November 23, 1896, directing that certain of the goods claimed in replevin should be delivered to the claimants, and that the plaintiffs in the other actions in replevin might present their claims before a referee. The receivers, the plaintiffs, were also appointed receivers in their own suit, and were authorized to sell all the other goods, and to hold the proceeds in place of the goods, subject to the final order of the court and subject to the same liens as the goods. Under that order sales were made by the receivers as authorized, and about $27,000, it is said, came into their hands as the proceeds thereof and of some other collections.
Thereafter on December 19, 1896, Metcalf Bros. & Co., the judgment creditors, filed a creditors' bill in the state court based upon their judgments of October 22d and 29th, as above stated, against the partnership receivers and the persons to whom Lesser Bros. had confessed judgments and transferred the real estate, lease and book accounts as above stated, to have all those transfers declared fraudulent as well as the partnership suit; and after trial, a decree therein was entered on April 6, 1898, adjudging the aforesaid assignments, confessions of judgment and transfers of the real estate, the lease and the accounts, fraudulent as against Metcalf and others, as well as against the partnership receivers. The decree also declared that the real estate and lease conveyed, as above stated, were subject to the lien of the plaintiffs' judgments first above stated; and directed that all the other property or its proceeds should be paid over or accounted for to the partnership receivers. No receiver was ever appointed in the suit of Metcalf. That decree gave no directions as to what the receivers should do with the property; but the opinion of Judge Russell shows that it was designed to be held by the partnership receivers for the benefit of the partnership creditors pro rata; and that any payment or preference to the complainants in that suit was intentionally denied. Metcalf v. Moses, 22 Misc.Rep. 664, 50 N.Y.Supp. 1060.
From the decree last mentioned, an appeal was taken by both parties to the appellate division, upon whose decision a judgment or decree was entered on January 31, 1899, affirming the decree below as to the fraudulent character of the transactions above stated, but adjudging that the complainants were entitled to be paid their original judgments out of the fund in the hands of the partnership receivers; but reversing the decree below as respects the two assignments to Adler and Lilienthal as being unnecessary for the complainants' relief. 35 A.D. 596, 55 N.Y.Supp. 179. An appeal was thereupon further taken by both parties to the court of appeals, which affirmed the judgment of the appellate division directing payment of the complainants' claims and adjudging all the transactions fraudulent, including also the appointment of the receivers in the partnership suit, as a fraud and imposition upon the court. The remittitur from the court of appeals was filed a few days since, on or about March, -- -- -.
While the latter appeal was pending in the court of appeals, Lesser Bros. filed their petition in bankruptcy in this court on May 12, 1899, which was less than four months after the decree of the appellate division adjudging payment to Metcalf & Co. out of the fund in the receivers' hands; and the firm and its members were on the same day adjudicated bankrupts, and on the 7th day of June, 1899, Mr. Barker was appointed trustee.
The court of appeals having finally adjudged that all the conveyances above specified and the partnership receivership were fraudulent and void as to creditors, the trustee in bankruptcy is entitled by operation of law (section 67e), to avail himself of the benefit of that adjudication in...
To continue reading
Request your trial
-
In re Dayton Coal & Iron Co.
...Knight (D.C.) 125 F. 35, 45; Brown v. Crawford (D.C.) 254 F. 146, 153. And see, by analogy, Martin v. Oliver, supra; Re Rathbone, supra; Re Lesser, supra. In light of the foregoing cases, I conclude that the prior jurisdiction acquired by a State court in a winding up proceeding, is not ips......
-
Perfection Garment Co. v. Crosby Stores, Inc.
...for the possession of such assets. The court cited as authority for such rule Mauran v. Carpet Lining Co., supra; In re Lesser (D. C.) 100 F. 433, 439; In re Kersten (D. C.) 110 F. 929, 931; In re Lengert Wagon Co. (D. C.) 110 F. 927; Ex parte Waddell, Fed. Cas. No. 17.027; In re Seebold (C......
-
Carling v. Seymour Lumber Co.
... ... court is sustained, not only by the analogous cases relating ... to comity, but the adjudications directly in point on this ... question of practice under the bankrupt law. Mauran v ... Carpet-Lining Co. (R.I.) 50 A. 331; In re Lesser ... (D.C.) 100 F. 433, 439; In re Kersten (D.C.) ... 110 F. 929, 931; In re Lengert Wagon Co. (D.C.) 110 ... F. 927; Ex parte Waddell, Fed. Cas No ... [113 F. 492.] ... 17,027; ... In re Seebold, 45 C.C.A. 117, 105 F. 910; ... Scheuer v. Stationery Co. (C.C.A.) 112 F ... ...
-
In re Unit Oil Co.
...Bros & Co. v. Barker, 1902, 187 U.S. 165, 23 S.Ct. 67, 47 L.Ed. 122. That case arose upon an appeal from the decision of In re Lesser (I), D.C.N.Y.1900, 100 F. 433, which held that service of summons did not create a lien within the meaning of the bankruptcy act. But in the Metcalf case the......