JOS. RIEDEL GLASS WORKS, INC., v. Keegan

• Decision Date: 05 February 1942
• Docket Number: No. 67.,67.
• Citation: 43 F. Supp. 153
• Parties: JOS. RIEDEL GLASS WORKS, Inc., v. KEEGAN.
• Court: U.S. District Court — District of Maine

43 F. Supp. 153

JOS. RIEDEL GLASS WORKS, Inc., v. KEEGAN.

No. 67.

District Court, D. Maine, S. D.

February 5, 1942.

COPYRIGHT MATERIAL OMITTED

Sidney W. Wernick and Jacob H. Berman, both of Portland, Me. (Barnett L. Kulak, of New York City, of counsel), for plaintiff.

Robert Hale, of Portland, Me., and Edward R. Parent, of Lewiston, Me., for defendant.

PETERS, District Judge.

This action is on a judgment rendered February 1, 1940, by the Supreme Court of New York against the defendant Keegan, a Maine citizen. It is based on a decree finding Keegan guilty of contempt of court and assessing damages, under Section 924 of the New York Civil Practice Act, for interposing a false claim to property in the possession of a sheriff who held it under a warrant of attachment in a suit in favor of the plaintiff, against Francis W. Kurtz & Co., Inc., a New York corporation, of which Keegan's son was an officer. A fine of $7,500 was imposed for presenting the false claim and interfering with the attachment, and the fine was ordered by the Court to be docketed as a judgment in favor of the plaintiff against Keegan.

The defendant here, in answering to the suit on the judgment, denies the jurisdiction of the New York Court to issue it, and, in an amendment to his answer, alleges that the judgment, being in the nature of a fine and penal in character, cannot be enforced extraterritorially. It is also alleged that the plaintiff has received $2,500, in partial satisfaction of the judgment, from another source. The supplemental answer was allowed to be filed after the pre-trial hearing and the order thereon, which order should be considered as amended by permitting the additional issues to be raised.

The evidence is almost wholly documentary, in the form of copies of the records in the Supreme Court of New York in the suit of the plaintiff here against Kurtz & Co. From this evidence I find the following facts, which must be recited somewhat in detail to clarify the questions involved.

In 1938 Jos. Riedel Glass Works Inc. brought a suit against Kurtz & Co. on an account for goods sold and delivered, and attached machinery and other personal property of the defendant. A few days later Keegan, the defendant here, filed an affidavit with the sheriff claiming title to the attached goods under a chattel mortgage from Kurtz & Co. On this claim appropriate proceedings were had under Section 924 of the New York Civil Practice Act¹ (pertinent language from which is set forth in the margin hereof), resulting in a finding by an official referee, confirmed by the Court, that the Keegan mortgage was void as to the Glass Works and its attachment. Whereupon, on June 2, 1939, the Glass Works, alleging that the claim filed by Keegan was falsely and fraudulently filed, moved the Court for a show-cause order, stating that Keegan "should be punished for a wilful contempt of Court, and that the matter be set down for a hearing for the purpose of assessing the damage did to the plaintiff, and that the said claimant(s) be fined in a sum treble the amount of the damage did to the plaintiff in accordance with Section 924 of the Civil Practice Act". The affidavit supporting the motion stated that Keegan was a resident of Maine and asked for notice to him by registered mail.

On June 5, 1939, a show-cause order on the above motion was issued returnable June 15, 1939, with directions to serve upon Keegan in Maine by registered mail, and such service was made.

On June 20, 1939, Solomon Goldman, Esq., as attorney for Keegan, filed a motion that the proceedings be dismissed as to Keegan, on the ground that the Court had no jurisdiction of his person, and could not obtain such in a contempt proceeding by a registered mail notice to a non-resident. He alleged that the proceeding brought under Section 924 of the Civil Practice Act to determine the title to the property claimed under the mortgage had been concluded by the final order entered therein with no adjudication that the claim of Keegan was false or fraudulent.

On July 26, 1939, the Court, — Mr. Justice Carew, — made the following memorandum: "The falsity of the claim presented not having been specifically decided by Referee Weil, it will be returned to him to take testimony and report his opinion as to whether or not the respondent falsely presented his claim to the sheriff and the damage done to the plaintiff".

On August 3, 1939, a formal order was entered by Mr. Justice Carew, reciting the motion that Keegan and one Inga Wichgraf (alleged to be implicated with Keegan) be punished for contempt, referring to the affidavits and motions filed in behalf of the respondents submitted in opposition to the motion, and directing that "the matter is hereby referred to the Hon. David L. Weil, Official Referee, to take testimony and report as to whether or not the respondents, Benjamin H. Keegan and Inga Wichgraf, falsely presented their respective claims to the sheriff of Queens County and the damage done to the plaintiff".

On October 18, 1939, Goldman, as attorney for Keegan, "appearing specially and for the purpose, and only for the purpose, of moving to set aside the service of the order to show cause * * * on the ground that this Court has no jurisdiction of the person of the claimant because the service of the order to show cause was defective", moved that the proceeding be dismissed for lack of jurisdiction, stating that "No previous application has been made for the relief herein to any Court or Judge, except that Justice Carew was informed of the manner of service of the aforesaid order to show cause by my affidavit of special appearance as aforesaid".

On this application there was an order of court directing the Glass Works to show cause why an order should not be issued vacating the service of the order of June 5, 1939, made on Keegan.

On October 23, 1939, Mr. Justice Miller disposed of the Goldman motion and affidavits annexed thereto and answering affidavits, with the following memorandum: "The contentions made by the movant were presented to Mr. Justice Carew and overruled by him. The present motion seeks, in effect, to review the order of Mr. Justice Carew. Motion denied."

On November 6, 1939, hearings began before the official referee, Mr. Weil, pursuant to the order of Mr. Justice Carew of August 3, 1939, and on December 4, 1939, the referee made his report, incorporating his previous findings as to the invalidity of the Keegan mortgage and finding further that Keegan, in assisting his son W. O. Van Keegan, the president of Kurtz & Co. Inc., in an attempt to defeat the attachment referred to, had filed a void claim under which some of the attached property had been taken away from the sheriff. The minutes of the proceedings in the hearing before the referee were filed with his report.

On January 31, 1940, Mr. Justice Carew filed findings of fact and conclusions of law upon which the order or decree in question, fining Keegan $7,500 and directing that it be entered as a judgment in favor of the plaintiff, was issued. The seventh finding of fact was "That the claim interposed by the claimant Benjamin H. Keegan, as aforesaid, was an invalid and fictitious claim and was made falsely and fraudulently at the request of William O. Van Keegan and under his guidance and direction".

The seventh conclusion of law was as follows: "That the said Benjamin H. Keegan by interposing his sworn affidavit of claim herein with the Sheriff of Queens County, and by submitting his verified pleadings in this Court, and otherwise invoking the aid of this Court, under Section 924 of the Civil Practice Act, and by his other proceedings herein, voluntarily submitted his person to the jurisdiction of this Court and was subject to all proceedings prescribed by the said Section 924 of the Civil Practice Act and all the rights and remedies accruing thereby and thereunder during the course of the proceedings herein, and as a result thereof, and this Court therefore has jurisdiction of the person of Benjamin H. Keegan. That the said Benjamin H. Keegan by his attorney also generally participated in the hearing before the Hon. David L. Weil on the 6th day of November, 1939".

The extent of the participation of Mr. Keegan and his attorney in the proceedings in New York appears to have been as follows:

On October 6, 1938, Keegan filed in New York his claim to the goods under attachment in the suit of the Glass Works against Kurtz & Co. Thereupon the plaintiff in that suit, denying the validity of the claim, acting under the authority of Section 924 of the New York Civil Practice Act, as already stated, applied to the Court for a determination of its validity. To this Keegan filed a verified answer in support of his claim and the matter was referred to the referee. Keegan appeared as claimant before the referee in New York and testified at the hearing.

On or before July 26, 1939, before Mr. Justice Carew on the motion that Keegan be required to show cause why he should not be held in contempt for filing a false claim, Goldman appeared specially for Keegan and argued his motion for a dismissal of the proceeding for lack of jurisdiction, on the ground that the proceeding was a new one, — as the proceeding to try title had been closed and terminated, — and that the contempt proceeding being a separate one required personal service on the defendant to bring him within the jurisdiction of the Court.

On September 1, 1939, Goldman, as attorney appearing specially for Keegan, filed notice of an appeal from the order of August 3, 1939, as he put it "granting in part plaintiff's motion to hold the claimant Benjamin H. Keegan in contempt of Court and to assess damages".

On October 11, 1939, the Appellate Division of the Supreme Court dismissed the appeal "after hearing Mr. Barnett L. Kulak for the motion and Mr. Solomon Goldman opposed", with a stipulation added for the filing of an undertaking for costs in the event of the...