In re Iron Clad Mfg. Co.

193 F. 781, 1912 U.S. Dist. LEXIS 1819
CourtDistrict Court, E.D. New York
DecidedFebruary 15, 1912
StatusPublished

This text of 193 F. 781 (In re Iron Clad Mfg. Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Iron Clad Mfg. Co., 193 F. 781, 1912 U.S. Dist. LEXIS 1819 (E.D.N.Y. 1912).

Opinion

CHATFIELD, District Judge.

The present application was made upon an order directing the American Steel Barrél Company and Elizabeth C. Seaman, individually and as an officer thereof, to show cause why certain real property described in the petition, and also certain personal property such as furniture, tools, machinery, books, papers, and articles of that nature, which it was alleged should have been turned over to the receiver of the Iron Clad Manufacturing Company as the property of that company, should not be delivered to this receiver, and why the American Steel Barrel Company and its president, Elizabeth C. Seaman, should not be punished for contempt in failing to deliver this property, and for interfering with the actions of the receiver by concealing property of the Iron Clad Manufacturing Company after knowledge of the bankruptcy proceedings, and in other ways hindering the conduct of the estate and of the bankruptcy proceedings in this court. The American Steel Barrel Company and Mrs. [783]*783Seaman, both as its president and as an individual, appeared and opposed the application, and a reference was asked to determine the issues raised by the answering affidavits.

it appears by the record that the petition in bankruptcy was filed against the Iron Clad Alanufacturing Company and an order made appointing a receiver upon the 23d day of AI ay, 1911. This order contained no stay nor direction as to the property in the possession of the Iron Clad Alanufacturing Company, and the receiver who was then appointed did not qualify and take possession of the premises until the following day, that is, upon May 24th, at which time Airs. Seaman was present and turned over to the receiver such property as went into his possession at that time. This included a tract of land with factory buildings used as the iron Clad Alanufacturing Com.pany’s plant, upon the south side of Cook street, in the borough of Brooklyn. It was alleged in the papers upon which the order to show cause was granted that many articles oí personal property, such as machinery, material, books, papers, and an office partition, were removed from the plant of the Iron Clad Alanufacturing Company after the signing of the order appointing a receiver, and after Airs. Seaman and the American Steel Barrel Company, through their attorney, had received notice of that appointment.

The testimony upon the reference shows, and the commissioner has reported, that considerable pioperty was so removed. The testimony also shows that certain real estate situated upon the north side of Cook street, and used by the American Steel Barrel Company, under an alleged lease from the Iron Clad Alanufacturing Company, was in reality the property of the Iron Clad Alanufacturing Company, and that no valid lease had ever been authorized or executed. A demand upon Airs. Seaman and the American Steel Barrel Company for the possession of this property was shown, but was not acquiesced in by her on account of the lease claimed.

The commissioner has reported that the title to this property is in the Iron Clad Alanufacturing Company, that no valid lease exists, and that the property should be turned over to the receiver. Upon the testimony this finding is plainly correct and should be confirmed. (The receiver has now been superseded by the trustee, who has title as well as the right to possession, and has joined in the present application.)

The receiver has never attempted to take possession of this real estate nor of any of the personal property referred to herein, nor has he applied to this court for a restraining order or direction with respect to so much of that property as was actually in the possession of the.Iron Clad Manufacturing Company at the time of the filing tof the petition in bankruptcy, except that the order to show cause upon which this proceeding is based restrains the respondents from further removing or disposing of any property of the alleged bankrupt.

But upon tlie reference a stipulation seems to have been entered into, by which the American Steel Barrel Company and Airs. Seaman [784]*784agreed to return to the Iron Clad Manufacturing Company all of the personal property, books, papers, machinery, and material for manufacturing, of the Iron Clad Manufacturing Company, .which was taken out by workmen on the night of May 23d, under Mrs. Seaman’s direction, or by employés of the American Steel.Barrel Com-pan}r who were subject to her orders. This property was by this stipulation admitted by her and the American Steel.Barrel Company to be the property of the Iron Clad Manufacturing Company. The commissioner reports that this stipulation has not been carried out, and .that the American Steel Barrel Company and Kirs. Seaman should be ordered to comply therewith. With respect to this finding the report should be confirmed.

[1] The commissioner has also reported that much of the property above recited, which was apparently removed, could not be identified or described, but that it should be returned. This conclusion would seem to be correct; but, upon a motion to turn over specific property, specific proof as to the identity or value of the property must be shown before a definite order can be made.

[2] In so far as the determination by the commissioner implies that certain personal property was in the possession of the Iron Clad Mam ufacturing Company and its officers and agents at the time of filing the petition in bankruptcy, that this possession was interfered with by the agents or employés of the American Steel Barrel Company, and that the burden is thereby thrown upon the American Steel Barrel Company, Mrs. Seaman, and their agents, to justify what was done by them after they had notice of the bankruptcy proceedings, it is entirely correct. In this respect, the failure on the part of the American Steel Barrel Company or of Mrs. Seaman to show just what was removed, and that they had a right so to remove it, is sufficient basis for directing the return to the possession of the Iron Clad Manufacturing Company, or the trustee now elected, of everything that can be shown to have been in its possession upon May 23, 1911, when the order appointing the receiver was signed.

[3] A failure to comply with such an order, and to carry out the stipulation made with the commissioner, if willful and if the action be within the power of those so ordered, would be contempt of the authority of this court.

[4] And.in so far as any property of the Iron Clad Manufacturing Company, or in its possession prior to taking possession of the plant by the receiver, was removed by any of the parties or their employés, in contemplation of the appointment of the receiver, such removal, concealment, and failure to account for the property is a contempt that is in defiance of the jurisdiction given this court by the filing of the petition, even if the intent did not go so far as to come within the criminal provisions of the statute prohibiting the removal of property so as to conceal it from the trustee.

Certain actions with relation to the possession or tearing down of a stairway and access to the office of the Iron Clad Manufacturing Company, on the part of Kirs. Seaman and some of her workmen, have not been passed upon by the commissioner, and there seems [785]*785to be nothing in the testimony from which a finding as to any taking of property of the bankrupt from the receiver, or of any contempt (unless it be for the receiver’s -comfort and convenience), could be based thereupon.

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193 F. 781, 1912 U.S. Dist. LEXIS 1819, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-iron-clad-mfg-co-nyed-1912.