Simon Lesser v. James Gray

Decision Date18 January 1915
Docket NumberNo. 110,110
PartiesSIMON LESSER, Plff. in Err., v. JAMES R. GRAY
CourtU.S. Supreme Court

Messrs. Henry A. Alexander, C. Henry Cohen, and Rodney S. Cohen for plaintiff in error.

Messrs. Alexander C. King and Charles T. Hopkins for defendant in error.

Mr. Justice McReynolds delivered the opinion of the court:

Lesser brought suit in the city court of Atlanta against Gray and another, once members of Inman & Company, for damages alleged to have resulted from breach of contract by the firm. A demurrer was sustained and final judgment rendered for defendant; this was affirmed by the court of appeals of Georgia (8 Ga. App. 605, 70 S. E. 104), and the matter is here upon writ of error.

A motion to dismiss must be denied. Plaintiff in error seasonably set up and claimed that, because the bankruptcy court adjudicated his debt to be not provable (Re Inman & Co. 175 Fed. 312), the proceedings in bankruptcy and discharge of defendant constituted no bar to a recovery thereon in the state court. A Federal issue is raised and we cannot say that it is too frivolous to give jurisdiction. Rector v. City Deposit Bank Co. 200 U. S. 405, 411, 50 L. ed. 527, 529, 26 Sup. Ct. Rep. 289.

The following summary adequately indicates the essentials of the original petition:

Inman & Company, a copartnership composed of Gray and others, in July, 1907, agreed to purchase from Lesser 500 bales of patches—cotton bagging—to be delivered during the twelve months commencing September 1, 1907. About one third was delivered and paid for prior to May 4, 1908, at which time an involuntary petition in bankruptcy was filed against the firm and its members. Shortly thereafter all were adjudicated bankrupts. Thustees were appointed, and in July, 1908, Gray obtained his discharge. Prior to the bankruptcy proceedings there was no breach or disavowal of the contract, and thereafter no demand for further deliveries nor offer to make any.

In February, 1909, Lesser presented a claim against the estate for his alleged loss. The trustees objected on several grounds. Among others these were specified: 'That said claim is not a provable claim in bankruptcy under the provisions of the bankrupt act; that said claim on its face shows that at the time of the filing of the petition in said cause, and at the date of adjudication, the merchandise, the subject-matter of the claim, had not been delivered to the bankrupts as provided under the contract of sale therein set forth, but that all of said merchandise that had been delivered, to wit, the amount of 174 bales, had been paid for. . . . Said proof shows that at the date of the adjudication, as well as the filing of the petition, no breach of said contract had occurred. . . . Your trustees show that the contract set forth is not such a contract as is avoided by an adjudication in bankruptcy, and, therefore, that the same is not a provable debt.'

The referee disallowed the claim, and the United States district court approved his action for reasons stated in a written opinion incorporated in the petition.

'Petitioner shows that the defendants have failed under said contract to accept and pay for 326 bales of patches at the contract price, and petitioner having retained said goods, defendants are indebted to him for the difference between the contract price and the market price at the time and place of delivery under said contract; . . . that his said claim having been disallowed and adjudicated not provable in bankruptcy, the said discharges of the defendants are no bar to the prosecution of this suit, and the plea of bankruptcy is not available to the defendants;' and he prays for judgment.

In support of the demurrer defendant Gray maintains: (1) The plaintiff sustained no legal injury. Before any breach of the contract an involuntary petition in bankruptcy, afterwards sustained, was commenced against the partnership and its members; the partnership was dissolved, the contract rendered impossible of performance and...

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62 cases
  • Pepper v. Litton
    • United States
    • U.S. Supreme Court
    • December 4, 1939
    ...of any claim asserted against the estate and to disallow it if it is ascertained to be without lawful existence. Lesser v. Gray, 236 U.S. 70, 35 S.Ct. 227, 59 L.Ed. 471. And the mere fact that a claim has been reduced to judgment does not prevent such an inquiry. As the merger of a claim in......
  • In re Nathan, 48059.
    • United States
    • U.S. District Court — Southern District of California
    • June 28, 1951
    ...1293; Chicot Co. Drainage Dist. v. Baxter State Bank, 1940, 308 U.S. 371, 376-378, 60 S.Ct. 317, 84 L.Ed. 329; Lesser v. Gray, 1914, 236 U.S. 70, 73-75, 35 S.Ct. 227, 59 L.Ed. 471; Giffin v. Vought, supra, 175 F.2d at pages 189-190; Johnson v. Wilson, 9 Cir., 1941, 118 F.2d 557, 560; In re ......
  • In re Caldor, Inc.-NY
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    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • January 30, 1998
    ...debt or obligation of the bankrupt upon which a demand or claim against the estate is based'") (quoting Lesser v. Gray, 236 U.S. 70, 74, 35 S.Ct. 227, 228, 59 L.Ed. 471 (1915)). It is also a core proceeding under § 157(b)(2)(C) because Caldor's claims against S Plaza are the equivalent of c......
  • Katchen v. Landy, 28
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    ...or a claim against the estate is based. This is essential to the performance of the duties imposed upon it.' Lesser v. Gray, 236 U.S. 70, 74, 35 S.Ct. 227, 228, 59 L.Ed. 471. The trustee is enjoined to examine all claims and to present his objections, Bankruptcy Act, § 47, sub. a(8), 11 U.S......
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1 books & journal articles
  • Redesigning Education Finance: How Student Loans Outgrew the debt Paradigm
    • United States
    • Georgetown Law Journal No. 109-1, October 2020
    • October 1, 2020
    ...Pepper v. Litton, 308 U.S. 295, 305–06 (1939) (recognizing availability of equitable disallowance in bankruptcy (citing Lesser v. Gray, 236 U.S. 70, 74 (1915))). 188. See, e.g., 34 C.F.R. §§ 685.215(a), 685.222(d) (2019). 189. 15 U.S.C. § 1603(7) (2018). 190. See supra Section I.E. 38 THE G......

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