Spach v. Johnina, Inc., 18409.
| Citation | 291 F.2d 619 |
| Decision Date | 13 September 1961 |
| Docket Number | No. 18409.,18409. |
| Parties | May SPACH, Trustee, Appellant, v. JOHNINA, INC., a Florida Corporation, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Robert R. Frank, Miami Beach, Fla., Frank & Weston, Miami Beach, Fla., for appellant.
Irving M. Wolff, Alvin M. Sandler, Miami, Fla., for appellee.
Before TUTTLE, Chief Judge, and CAMERON and JONES, Circuit Judges.
Following an adjudication of bankruptcy of the estate of Hyman Z. and Doris G. Gorin, doing business as Don Juan Men's Wear, the trustee, appellant here, petitioned the bankruptcy court for a turn over order as to certain monies allegedly belonging to the bankrupt estate and in the possession of appellee. This money, $5,700 in amount, was held by Johnina, Inc. as landlord of the property of the premises occupied by the bankrupt, and was claimed by it to stand as security for any unpaid rentals on the premises.
Responding to the order to show cause why it should not surrender the $5,700 on a "turn over" order, Johnina, without alleging any facts to support its motion, filed a special appearance "for the sole purpose of contesting jurisdiction of the Referee."1
Whatever may have been the facts, it is clear that upon the hearing of this motion the Referee correctly entered an order overruling the motion and setting down the issue on the merits.
Thereafter Johnina filed its answer on the merits. As a defense it asserted that some $5,400 of rent had accrued under the lease and that this amount represented damages actually suffered by it, compensation for which was payable out of the $5,700 deposit.
This answer was attacked for being filed too late, and, second, that the defense was "a sham in fact."
Thereafter the case came on for a hearing on the merits. The record discloses that the parties discussed the lease contract and discussed amounts of alleged past due rent, but it discloses no testimony and no proof on the part of Johnina seeking to establish the truth of its answer. As well as we can understand the action of the Referee, he treated the matter as though Johnina would not be entitled to retain the security even if the facts were proved. However, he simply entered an order directing a turn over of the funds. Thereafter, appellee filed its petition for review, asserting (1) the lack of summary jurisdiction, and (2) the lack of evidence to support the trustee's right to the said sum of money. Thereupon the Referee filed his certificate of review with the District Court. In this certificate the Referee stated, correctly we think, that, "the respondent failed to produce any testimony to establish its claim of set off to the claim of the trustee."
Upon its consideration of the matter, the trial court reversed the order of the Referee on the ground, "the Referee did not possess summary jurisdiction in the matter in that the petitioner, Johnina, Inc., did have a real and substantial claim against the security deposit retained by the said Johnina, Inc."
The parties all agree to the controlling legal principles, that is that the trustee is entitled to a turn over order to property held by another if the latter has no real claim to the property, but merely a colorable claim. See Nicholas v. Peter Pan Snack Shop, 5 Cir., 256 F.2d 349, 354. In case there is only a colorable claim the money in question is considered to be in the constructive possession of the Referee and subject to his summary jurisdiction. See Collier on Bankruptcy, ¶ 23.03 et seq., ¶ 70.44.
It is clear that the proof by the appellee, Johnina, that it held the $5,700 in accordance with the terms of the lease agreement would not be sufficient to entitle it to retain the sum as liquidated damages, for a provision such as that here involved2...
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