In re Silver Cup Bar & Grill

Decision Date01 October 1942
Citation50 F. Supp. 528
PartiesIn re SILVER CUP BAR & GRILL, Inc.
CourtU.S. District Court — Southern District of New York

Irving Lipton, of Brooklyn, N. Y., for petitioner.

Levin & Weintraub, of New York City (Benjamin Weintraub, of New York City, of counsel; Milton Mitwell, of New York City, on the brief), for petitioning creditors.

CONGER, District Judge.

The assignee of a sum of money refunded by the New York State Liquor Authority upon the surrender of a liquor license heretofore issued to the alleged bankrupt, petitions this Court for an order vacating and setting aside an ex parte order, dated August 28, 1942. This order restrained the petitioner from taking any further proceedings in the New York Supreme Court for the purpose of collecting such refund.

There is no dispute as to the facts. On January 5, 1942, the petitioner loaned a sum of money to the alleged bankrupt and as security for such loan he received a chattel mortgage, a confession of judgment, a series of promissory notes and an assignment of the refund in question. Twelve hundred dollars of the money thus loaned was paid on or about January 30, 1942, to the New York State Liquor Authority as a renewal fee for a liquor license. The chattel mortgage was filed in the office of the Register of New York City and the assignment in the office of the State Comptroller. The license was renewed on March 1, 1942.

The alleged bankrupt defaulted in paying the promissory notes and discontinued business. The mortgage was foreclosed and certain chattels were sold which sale resulted in a deficiency in the sum of $1,287.99. This was reduced to $1,000 and a judgment for that amount plus costs was docketed in the Municipal Court of the City of New York and transcripts were docketed in the offices of the County Clerks of Kings and Albany Counties.

The liquor license was turned over to the petitioner by the alleged bankrupt and steps were taken to surrender it and to obtain a refund. On August 20, 1942, the petitioner was notified that the State Comptroller held the sum of $782.91 as a refund but that other judgment creditors also claimed the money upon the strength of third party orders which had been served on the comptroller. The comptroller refused to make any payment until an adjudication was obtained as to the rightful recipients of the money. The petitioner then served a third party order on the comptroller and instituted a proceeding in Albany County for an order directing that the money be paid to him. An order to that effect was granted on August 28, 1942. On the same day the involuntary petition in bankruptcy was filed and on the next day the order in question was served on the petitioner.

Upon the basis of these facts petitioner now contends that a chose in action for the refund in question vested in the alleged bankrupt on March 1, 1942, the date the liquor license was issued, and that on the same date he, the petitioner, acquired a valid lien on such refund by virtue of the assignment executed on January 5, 1942. He claims that because this lien attached to the fund more than four months before the filing of the petition in bankruptcy his right to it is paramount to that of a trustee. In support of this contention petitioner relies upon these cases. Niles v. Mathusa, 162 N.Y. 546, 57 N.E. 184; McNeeley v. Welz, 166 N.Y. 124, 59 N.E. 697; Okin v. Isaac Goldman Co., 2 Cir., 79 F.2d 317.

However, these cases do not support the proposition urged by the petitioner. As far as pertinent the two New York cases merely held that a liquor certificate or license is not a chattel but is a chose in action entitling the holder to a refund of any unused portion of the fee paid for such...

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2 cases
  • United States v. Bareno
    • United States
    • U.S. District Court — District of Maryland
    • 5 Junio 1943
  • In re Ideal Mercantile Corporation
    • United States
    • U.S. District Court — Southern District of New York
    • 24 Julio 1956 shall come into existence"; and (2) the equitable lien did not relate back to the October assignment.15 In Re Silver Cup Bar and Grill, Inc., D.C.S.D.N.Y., 50 F.Supp. 528, 529, petitioner in January, 1942, loaned bankrupt a sum of money and as security received an assignment of the refun......

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