IN RE v. LOEWER'S GAMBRINUS BREWERY CO.

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Citation74 F. Supp. 909
PartiesIn re V. LOEWER'S GAMBRINUS BREWERY CO.
Decision Date07 May 1947

74 F. Supp. 909

In re V. LOEWER'S GAMBRINUS BREWERY CO.

District Court, S. D. New York.

May 7, 1947.


74 F. Supp. 910

Finke & Jacobs, of New York City (Marcy Finke, of New York City, of counsel), for claimant-petitioner.

Glass & Lynch, of New York City (Leslie Kirsch and Sidney Freiberg, both of New York City, of counsel), for trustee.

BRIGHT, District Judge.

Loewer Realty Company petitions for a review of an order made by the Honorable John J. Joyce, referee in bankruptcy, subordinating its claim for $48,138.39, to the claims of all other creditors of the estate.

Claimant on April 20, 1943, filed proof of claim in the sum of $49,519.63, of which $45,000 was represented by a promissory note dated March 28, 1941, $2700 interest thereon, and $1819.63 for rent. Objection was filed by the trustee on November 28, 1944, on the ground that the debtor was not justly and truly indebted to the claimant. A bill of particulars was thereafter furnished which stated that the rental agreement was oral and was made on or about February 12, 1930, by Jacob Loewer, Henry D. Muller, Sr. and Ida Loewer, president, treasurer and secretary respectively of the claimant, with the board of directors of defendant, as then constituted, the names of whom were not known to claimant. The rental claim was for the use of the premises at 536-38 West 41st Street, New York City, at $3750 per annum ($312.50 per month), 540-542 West 41st Street, at $1250 per annum ($104.16 per month) and 535 West 40th Street at $1875 per annum ($156.25 per month). Upon the trial, the claim was amended by reducing the amount to $48,138.39 and substituting the premises 536-42 West 41st Street as those for which rent was sought.

The referee found the following facts, which do not seem to be disputed:

The debtor was engaged in the manufacture and sale of beer and owned 528-532 West 42nd Street, where it had its office, and 521-523 West 41st Street, which it used as a brewery and for cold storage. Claimant was the record owner of 536-538 West 41st Street, which were used by the debtor as a bottling plant and garage respectively.

Prior to 1923 and at all times thereafter, the debtor and claimant each had the same officers, directors, and stockholders; the two corporations kept separate books and bank accounts, but had common office space and telephone facilities in the building owned by the debtor, whose office manager kept claimant's books without charge, and when other employees of the debtor performed service for the claimant, except the president who received a nominal salary from the claimant, they were paid only by the debtor. All transactions between claimant and debtor were conducted, approved and effected through the same group of officers, directors or stockholders; and

74 F. Supp. 911
each of the corporations was an integral part of an enterprise owned, controlled and directed by the same group of persons as stockholders for their own benefit; and moneys and property of each corporation were applied under the direction of the stockholders for the benefit of the other as a branch or department of a joint enterprise owned and controlled by the same persons for their own benefit

It was also found that the note underlying part of the claim bears date March 28, 1941, and was made in the debtor's name by Kenneth P. Steinreich, as president and Henry D. Muller, as treasurer, and both were similar officers of the claimant. It was entered in the debtor's general ledger on May 31, 1941, and was executed as evidence of a purported indebtedness comprising (1) a loan account commencing in January 1923, and (2) a rental account commencing in May 1928.

The credit balance in favor of claimant was $35,154 at the end of each of the years 1935, 1936 and 1937. After 1935, the claimant was not credited with any loan but in 1941 was credited in the amount of $2,000, the character of which does not appear; and no other entries except for interest appear in the loan account after 1935.

It was further found that in 1932 claimant's three directors passed a resolution which recited that the two corporations were owned by the same individuals and were affiliated companies in fact, and directed its officers to assign its claim against the debtor to a bank as security for repayment of moneys borrowed by the debtor. At a joint meeting of stockholders of both corporations, held May 18, 1933, it was resolved that all of the assets of the respective companies, with certain exceptions, be sold, upon terms of sale to be fixed by the president, either by a direct sale or by transfer of assets to the stockholders and sale by them, or by transfer of the capital stock to the purchasers, or in such other manner as might be calculated to avoid or reduce taxes; and at a similar meeting on September 18, 1933, they considered a conditional offer by a prospective purchaser for such assets. On December 13, 1940, the stockholders of each corporation adopted separate but identical resolutions that the directors be instructed to receive and consider a proposal to purchase all the property of both corporations.

On December 3, 1940, the debtor's stockholders authorized a mortgage for $20,000 upon the 42nd Street property, the proceeds of which were to be applied to the discharge of all arrears of taxes, mortgage interest and other charges against the claimant's property; and out of the proceeds of that loan, the debtor on December 31, 1940, paid $5,671.33 taxes on the claimant's property at 530-538 West 41st Street, $3,973.75 for interest on a mortgage on part of those premises, and $1361.25 on mortgages covering the property.

On January 27, 1941, the debtor's directors authorized...

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8 practice notes
  • In re Bellucci, Bankruptcy No. 4-80-00213-G.
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • 9 Noviembre 1982
    ...v. United States, 153 F.2d 101 (6th Cir.1946); Corley v. Cozart, 115 F.2d 119 (5th Cir.1940); and In re Loewer's Gambrinus Brewery Co., 74 F.Supp. 909 (S.D.N.Y.1947), aff'd, 167 F.2d 318 Traditionally, it has been held that absent some showing of fraud or inequitable conduct on the part of ......
  • Schwartz v. Mills, No. 22
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • 15 Noviembre 1951
    ...6 Cir., 106 F. 57, 62. It is true that in In re Loewer's Gambrinus Brewery Co., 2 Cir., 167 F.2d 318, this court affirmed D.C.S.D.N.Y., 74 F.Supp. 909, to hold, after a full trial upon objections filed by the trustee, that a claim of a solvent corporation having the same stockholders as the......
  • Farmers Bank of Clinton, Missouri v. Julian, No. 18588.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 18 Diciembre 1967
    ...corporate insiders who take advantage of their position and knowledge to defraud creditors. In re V. Loewer's Gambrinus Brewing Co., 74 F.Supp. 909 (S.D.N.Y.1947) affd. 167 F.2d 318 (2 Cir. 1948), approved subordination of claims of officers, directors and stockholders that did not carry th......
  • Matter of Powe, Bankruptcy No. 82-436
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida
    • 1 Junio 1987
    ...on equitable grounds requires "that the claimant be guilty of at least some inequitable conduct"); In re Loewer's Gambrinus Brewery Co., 74 F.Supp. 909, 913-914 (S.D.N.Y.1947), aff'd, 167 F.2d 318 (2nd Cir.1948), ("the essence of the test is whether or not under all the circumstances the tr......
  • Request a trial to view additional results
8 cases
  • In re Bellucci, Bankruptcy No. 4-80-00213-G.
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • 9 Noviembre 1982
    ...v. United States, 153 F.2d 101 (6th Cir.1946); Corley v. Cozart, 115 F.2d 119 (5th Cir.1940); and In re Loewer's Gambrinus Brewery Co., 74 F.Supp. 909 (S.D.N.Y.1947), aff'd, 167 F.2d 318 Traditionally, it has been held that absent some showing of fraud or inequitable conduct on the part of ......
  • Schwartz v. Mills, No. 22
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • 15 Noviembre 1951
    ...6 Cir., 106 F. 57, 62. It is true that in In re Loewer's Gambrinus Brewery Co., 2 Cir., 167 F.2d 318, this court affirmed D.C.S.D.N.Y., 74 F.Supp. 909, to hold, after a full trial upon objections filed by the trustee, that a claim of a solvent corporation having the same stockholders as the......
  • Farmers Bank of Clinton, Missouri v. Julian, No. 18588.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 18 Diciembre 1967
    ...corporate insiders who take advantage of their position and knowledge to defraud creditors. In re V. Loewer's Gambrinus Brewing Co., 74 F.Supp. 909 (S.D.N.Y.1947) affd. 167 F.2d 318 (2 Cir. 1948), approved subordination of claims of officers, directors and stockholders that did not carry th......
  • Matter of Powe, Bankruptcy No. 82-436
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida
    • 1 Junio 1987
    ...grounds requires "that the claimant be guilty of at least some inequitable conduct"); In re Loewer's Gambrinus Brewery Co., 74 F.Supp. 909, 913-914 (S.D.N.Y.1947), aff'd, 167 F.2d 318 (2nd Cir.1948), ("the essence of the test is whether or not under all the circumstances the ......
  • Request a trial to view additional results

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