In re Interocean Transp. Co. of America

232 F. 408, 1916 U.S. Dist. LEXIS 1672

• Court: District Court, S.D. New York
• Decided: March 7, 1916
• Status: Published

Opinion

LEARNED HAND, District Judge

(after stating the facts as above). [1] On November 24, 1915, when the notice of motion was served by the receiver upon the Equitable Trust Company, it held a fund upon which it had no claim and against which there had already been made two adverse claims. Each of these arose from circumstances existing before petition filed, which distinguishes the case from Bryan v. Bernheimer, 181 U. S. 188, 21 Sup. Ct. 557, 45 L. Ed. 814, where the purchaser of the assignee for creditors had bought after petition filed. The question, therefore, is whether claims made after petition filed, but arising before that time, constitute adverse claims, when the fund is in possession of one who makes no adverse claim. First National Bank v. Chic. Title & Trust Co., 198 U. S. 280, 25 Sup. Ct. 693, 49 L. Ed. 1051, seems to be directly in point. In that case the bankrupt had seed in storage with a warehouseman, whose receipts he had pledged. The warehouseman had no- claim on the seeds, hut did have possession. The Supreme Court decided that the District Court had no jurisdiction to determine the validity of the pledgees’ claims. It is true that in Whitney v. Wenman, 198 U. S. 539, 552, 25 Sup. Ct. 778, 49 L. Ed. 1157, Mr. Justice Day says that the jurisdiction exists whether the property is held by the bankrupt, “or for him”; but he mentions First National Bank v. Chic. Title & Trust Co., supra, and distinguishes it, because the District Court was not in possession of the fund. I have looked with some care for any case holding that an adverse claim against property in the possession of a stakeholder is not enough to forbid summary jurisdiction of this court, ánd I can find none. On the other hand, in the similar case of a claim by assignment of a chose in action the rule is against jurisdiction. Copeland v. Martin, 182 Fed. 805, 105 C. C. A. 237; In re Driggs (D. C.) 171 Fed. 897. I therefore conclude that there is no jurisdiction to determine in this proceeding the claims of Palin, Evans & Co., Limited, or of the Hellenic Transatlantic Steamship Company.

[2] There is another ground^quite as conclusive, so far as concerns the claim of Palin, Evans & Co., Limited, which is that they assert a maritime lien which cannot be discharged or adjudicated, except in the admiralty (Moran v. Sturges, 154 U. S. 256, 14 Sup. Ct. 1019, 38 L. Ed. 981), a rule equally applicable between a federal court sitting as a court of admiralty and the same court sitting in any other capacity as it is between the admiralty court and a state court (Hudson v. N. Y. & Albany Transport. Co., 180 Fed. 973, 104 C. C. A. 129). Possibly the bankruptcy court might enjoin all proceedings in admiralty until the bankruptcy was over, but that would be an idle thing to do in the case at bar, since the maritime lien of Palin, Evans & Co., Limited, would remain, and no final disposition of the res could be had till it was terminated. A much better way is for the receiver or trustee to intervene in the admiralty proceedings and claim the bankrupt’s right there. In. view of the length of time which has elapsed since the adjudication, I will not issue any stay to run until a trustee is appointed, assuming, which I do not, however, decide that only a trustee can intervene in the admiralty proceedings. .

[3] Coming now to the motion against the Hellenic Transatlantic Steamship Company, what I have already said at the beginning is sufficient to settle the matter of any permanent stay, and I will give no-temporary stay until a trustee is appointed for the reasons just given. There is, however, another reason against any stay. Even if this were an action against the receiver himself, this court would not issue any stay. In re Russell, 101 Fed. 248, 41 C. C. A. 323; In re Kanter & Cohen, 121 Fed. 984, 58 C. C. A. 260; In re Spitzer, 130 Fed. 879, 66 C. C. A. 35; In re Mertens & Co., 147 Fed. 182, 77 C. C. A. 478. These cases establish the doctrine that, even when the receiver or trustee is in possession of goods, formerly the bankrupt’s, his title may be tried in the state court by the simple expedient of avoiding any pos-sessory action and suing in conversion. Doubtless it is true that when, after his appointment, he meddles with the property of others, he is liable to action. Hebert v. Crawford, 228 U. S. 204, 33 Sup. Ct. 484, 57 L. Ed. 800. But these cases go further, and allow his mere refusal to surrender possession to be regarded as a tort for which he may be sued elsewhere. Since this is binding law for me, it must be apparent that a fortiori I may not stay the prosecution of an action for money had and received against a third person, who is a stakeholder. The trustee, when appointed, may commence such an action on his own account, if he does not care to intervene in the admiralty. How the Equitable Trust Company is to protect itself in the unpleasant emergency which will result is not a question of bankruptcy.

Both motions are denied.