In re Progressive Wall Paper Corp.

• Decision Date: 11 January 1916
• Docket Number: 78.
• Parties: In re PROGRESSIVE WALL PAPER CORP. v. PEOPLE'S NAT. BANK OF HUDSON FALLS. JUSTIN
• Court: U.S. Court of Appeals — Second Circuit

229 F. 500

In re PROGRESSIVE WALL PAPER CORP.

JUSTIN v. PEOPLE'S NAT. BANK OF HUDSON FALLS.

No. 78.

United States Court of Appeals, Second Circuit.

January 11, 1916

Weeds Conway & Cotter, of Plattsburgh, N.Y. (Frank E. Smith, of New York City, of counsel), for appellant.

Luther A. Wait, of Saratoga Springs, N.Y. (Edgar T. Brackett, of Saratoga Springs, N.Y., of counsel), for appellee.

Before LACOMBE, COXE, and ROGERS, Circuit Judges.

ROGERS Circuit Judge.

The trustee of the bankrupt filed his petition, in which he alleged that the People's National Bank of Hudson Falls N.Y., is a secured creditor of the bankrupt, holding a note for $5,000 made by the latter, dated September 13, 1914, and secured by a deposit of five bonds made by the bankrupt for $1,000 each; the bonds being secured by a mortgage upon all the real property of the bankrupt. He asks for a decree adjudging that the bonds are invalid, that they were transferred to the bank by the bankrupt, that they are not liens upon the real property of the bankrupt, and that the bank be ordered to return the bonds to him.

The facts are similar to those in Re Justin, 229 F. 489 . . . C.C.A. . . ., decided by this court at this term. Indeed, the two cases were argued and submitted together. The only difference in the facts is that in this case there are only five bonds, of $1,000 each, involved, while in that there were seven. The facts, therefore, need not be set forth, and it is sufficient to say that the decision in that case is equally applicable to this.

The order of the District Judge is reversed, and that made by the referee is affirmed.

LACOMBE Circuit Judge.

I am unable to concur with the majority of the court. My individual conclusions are sufficiently expressed in the following excerpts from the opinion of Judge Ray.

'It cannot be doubted that if the Progressive Wall Paper Corporation, finding itself unable longer to secure the indorsement of Wing, and through it a renewal of its note at the bank, had executed a new note indorsed by Cunningham Derby, and Ingalsbe for the same amount and due three or six months later, and had presented same at the bank for discount to obtain money to take up the old note, and had been refused on account of the insufficiency of the security of the indorsers, and the corporation had thereupon pledged $7,000 of its mortgage bonds as additional security for the payment of such note, and had...