In re Stringer

• Decision Date: 15 July 1916
• Citation: 234 F. 454
• Parties: In re STRINGER.
• Court: U.S. District Court — Eastern District of New York

234 F. 454

In re STRINGER.

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

July 15, 1916

A Gordon Murray, of New York City, for trustee.

Henry M. Stevenson, of New York City, for claimants.

Ward D Williams, of New York City, for general creditor.

CHATFIELD District Judge.

The referee has found as a fact that certain items advanced by Mrs. Mary E. Lewis, by her son, H. Leroy Lewis, and by the H J. Lewis Oyster Company, should be allowed as valid claims against the estate in bankruptcy of Stringer & Co., a copartnership having as its members, G. Franklin Stringer (a brother of Mrs. Lewis) and his son (G. Franklin Stringer Jr.). This firm was in existence from May 23, 1912, to the death of G. Franklin Stringer, in January, 1915. The petition in bankruptcy immediately followed, being filed by G. Franklin Stringer, Sr., as an individual and as the sole surviving partner of Stringer & Co.

The referee has in general made findings as to two issues presented upon the testimony. One of these is as to the obligations of Stringer & Co. with respect to the assets and liabilities of a firm known as Jewell & Stringer (or Jewell, Stringer & Co.) in which firm G. Franklin Stringer, Sr., was a partner. The other member of this firm held a Stock Exchange seat in his name, which was sold for the benefit of this firm when the firm was dissolved at G. Franklin Stringer's request. The proceeds of this stock including the seat were used in liquidation of the partnership debts, which were all assumed by G. Franklin Stringer, who also took over the assets and who immediately formed the firm of Stringer & Co. with his son, putting into this new firm the assets of Jewell & Stringer, and assuming therewith the debts of that firm as a necessary accompaniment of taking over the assets. The firm of Jewell & Stringer was not insolvent. The referee has found, therefore, that the firm debts of Jewell & Stringer can be proven against the property of Stringer & Co.

It also appears that some of the securities upon which the claims are based have been used continuously as collateral since the formation of the firm of Stringer & Co., and were actually disposed of and applied to the account of Stringer & Co. when that firm's loans were finally closed out under the rule. As to these latter items there would seem to be no question that the firm of Stringer & Co. was properly held to have succeeded to the obligations successively of Jewell & Stringer and G. Franklin Stringer, Sr., in the same way that it would have been liable for these obligations if the original transactions had occurred since the formation of the firm of Stringer & Co. In other words, the finding of the referee that for the purposes of these claims Stringer & Co. was the successor and assumed the obligations of Jewell & Stringer, is correct.

The second proposition, found by the referee as to all of the claims, presents a different situation. The claim of the H. J. Lewis Oyster Company, for the sum of $25,091.69, is based upon a check drawn to the order of Jewell & Stringer, for which a demand note, signed by Jewell & Stringer, was given.

The claim of H. Leroy Lewis is based upon 6 bonds, of the par value of $1,000 each, of the International Silver Company, which H. Leroy Lewis took from his own funds and delivered to Jewell & Stringer in order to make up a block of 15 of such bonds, which Mrs. Lewis requested her son to take out of her safe deposit box and deliver in response to a request therefor by her nephew, G. Franklin Stringer, Jr. But 9 of these bonds were found in the possession of Mrs. Lewis by her son, H. Leroy Lewis, and he therefore added the 6 bonds of his own and delivered them all to Jewell & Stringer, who proceeded to credit them in an account marked 'G. Franklin Stringer, Sr., Special.'

The subsequent treatment of these securities in this account was the same as that accorded to the other securities turned over at the dissolution of that firm to G. Franklin Stringer, as surviving partner, and by him to Stringer & Co. The manner of entering this loan upon the books of Jewell & Stringer would not affect the obligation incurred by that firm when it received the securities, and plainly the finding of the referee is correct when he holds that the firm of Stringer & Co. was indebted to H. Leroy Lewis for the 6 bonds in question, and to the H. J. Lewis Oyster Company for the $25,091.69 upon the demand note made by Jewell & Stringer therefor. But the referee has held also that certain securities advanced by Mrs. Lewis, including the 9 bonds just referred to, were also obligations of Jewell & Stringer, and hence valid as claims against Stringer & Co., when they found their way into the hands of Jewell & Stringer and were used by it for firm purposes.

Mrs Lewis makes some point of the fact that no formal adjudication in bankruptcy has...