Lochsley Hall Inc. v. Filmvideo Releasing Corp.

• Decision Date: 01 March 1971
• Citation: 36 A.D.2d 694,318 N.Y.S.2d 864
• Parties: LOCHSLEY HALL INC., Plaintiff-Appellant, v. FILMVIDEO RELEASING CORP., Defendant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 864

318 N.Y.S.2d 864

36 A.D.2d 694

LOCHSLEY HALL INC., Plaintiff-Appellant, v. FILMVIDEO RELEASING CORP., Defendant-Respondent.

Supreme Court, Appellate Division, First Department.

March 1, 1971.

I. R. Gilbert, for plaintiff-appellant.

H. Gotbetter, New York City, for defendant-respondent.

Before STEVENS, P.J., and CAPOZZOLI, MARKEWICH, KUPFERMAN and TILZER, JJ.

PER CURIAM.

Judgment, Supreme Court, New York County entered August 11, 1970, upon an order which granted motion for summary judgment in favor of Filmvideo Releasing Corp. (Filmvideo) against Lochsley Hall, Inc. (Lochsley) and University-at-Large Programs, Inc. (University), modified, on the law, to deny summary judgment as to Lochsley only. As so modified, the judgment appealed from is otherwise affirmed, without costs and without disbursements.

Lochsley executed a series of three promissory notes aggregating $41,400 payable to Filmvideo as part of a transaction involving the purchase of a film library. University, a 96% Owned subsidiary of Lochsley, guaranteed payment of the notes.

On or about July 1, 1970, Filmvideo moved for summary judgment against Lochsley and University, which motion was returnable July 14, 1970. On July 1, 1970 Lochsley filed a voluntary petition under Chapter XI of the Federal Bankruptcy Act. Simultaneously it filed a petition for an Order of Continuance in the Federal District Court which was signed July 2, 1970. The Order contained a stay against instituting or continuing actions or special proceedings against Lochsley upon causes of action which accrued prior to the institution of the arrangement proceeding, with an exception not relevant here. On or about July 9, 1970 Lochsley served answering papers in opposition to Filmvideo's motion, which papers included a copy of the Referee's Order of Continuance. This opposition, with the included copy of the Order of Continuance, gave notice to the court of the bankruptcy proceeding (cf. Boynton v. Ball, 121 U.S. 457, 7 S.Ct. 981, 30 L.Ed. 985) and operated to stay Filmvideo's action against Lochsley (see, Hill v. Harding, 107 U.S. 631, 2 S.Ct. 404, 27 L.Ed.2d 493; In Re Engram, D.C., 156 F.Supp. 342, aff'd Taylor v. Engram, 5 Cir., 249 F.2d 441, cert. den. 356 U.S. 901, 78 S.Ct. 561, 2 L.Ed.2d 580). In the last cited case it was noted that the filing of a petition in bankruptcy is a caveat to all the world and in effect an attachment and an injunction. The appropriate property of the debtor is so impounded...