King v. Hiawatha Silk Mills, Inc.
| Decision Date | 25 January 1924 |
| Docket Number | 201. |
| Citation | 296 F. 907 |
| Parties | KING v. HIAWATHA SILK MILLS, Inc., et al. |
| Court | U.S. Court of Appeals — Second Circuit |
Appeal from a decree of the District Court for the Southern District of New York, entered July 7, 1923, amending ex parte orders entered on March 2, 1922, and May 1, 1923, respectively, by reducing certain allowances made to ancillary receivers and their attorneys. A bill in equity was filed by Herman King in the District Court for the Middle District of Pennsylvania against Hiawatha Silk Mills, Inc., in June, 1921, and Messrs Perley and Lynch were appointed receivers by the District Judge. There were assets in the Southern District of New York, and the same persons were appointed ancillary receivers by the District Court for the Southern District of New York on June 10, 1921. On March 2, 1922, an order, dated March 1 1922, was entered, authorizing the payment of $2,500 to Lynch and $3,000 to Myers & Goldsmith, attorneys for the receivers. On May 2, 1923, another order, dated April 30, 1923, was entered allowing Lynch a further sum of $2,000, Perley $4,500, and the attorneys for the receivers a further sum of $3,500. On June 30, 1923, Morimura. Arai & Co., a creditor obtained an order to show cause why it should not be permitted to intervene, and why the court should not reconsider the two orders, supra, which had made an aggregate allowance of $15,500.
After hearing the motion which thus came up, the District Judge on July 7, 1923, made a decree which reduced the allowances and awarded $2,125 to each receiver, $4,250 to the attorneys for the receivers, and provided that the receivers be not discharged nor their bonds canceled until the receivers had repaid $7,000, the amount of the reduction. It appears that on June 14, 1923, the receivers had obtained an ex parte order discharging themselves and canceling their bonds. This order was modified by the order of July 7, 1923, as follows: 'Ordered that said F. M. Lynch and A. P. Perley be surcharged, * * * and that the said ancillary receivers be not discharged herein, nor the bonds filed by them canceled, until after repayment by them to the receivers of the amount so surcharged.'
From the decree of July 7, 1923, the ancillary receivers and their attorneys appeal.
Mortimer C. Rhone, of Williamsport, Pa., and Myers & Goldsmith, of New York City, for appellants.
Putney, Twombly & Putney, of New York City, for respondent.
Elkus & Gleason (for Champlain Silk Mills and Gosho Corp.), and Rounds, Schurman & Dwight (for Salembier & Villate), all of New York City, amici curiae.
Before ROGERS, MANTON, and MAYER, Circuit Judges.
MAYER Circuit Judge (after stating the facts as above).
If the court had power, the reduction of the allowances was within its discretion. Ordinarily an order making allowances is interlocutory, but in this case the order of July 7, 1923 surcharged the receivers as on a final accounting, and ordered that they be not discharged, nor the bonds filed by them canceled, until after repayment of the surcharged amount. Thus the order or decree of July...
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