In re Keiler

14 F. Cas. 210, 4 Abb. N. Cas. 150, 18 Nat. Bank. Reg. 10
CourtDistrict Court, S.D. New York
DecidedMay 15, 1878
StatusPublished
Cited by1 cases

This text of 14 F. Cas. 210 (In re Keiler) is published on Counsel Stack Legal Research, covering District Court, S.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 Keiler, 14 F. Cas. 210, 4 Abb. N. Cas. 150, 18 Nat. Bank. Reg. 10 (S.D.N.Y. 1878).

Opinion

Choate, J.

[After stating the foregoing facts.]— This motion was heard upon affidavits, and upon all the papers used in the supreme court on the motion for the appointment of a receiver, and ’'among these papers was a petition or request to the supreme court, in which all these petitioning creditors united with other creditors of the firm in the course of the proceedings in that court.

This petition or request was to the effect that the court should appoint as receivers the alleged bankrupts Wormser and Kingsbury, and it was signed by thirty-five creditors of the firm, two of the petitioning creditors in this court having signed it, one in the eighteenth and the other in the thirty-second place in the order of the signatures respectively.

It also appeared by the papers that one of the petitioning creditors—the same who signed the said petition or request in the eighteenth place—had made an [153]*153affidavit used in the action in the supreme court, stating, among other things, that he was the bookkeeper of the firm, and that the whole number of creditors of the firm was forty-three.

A motion was also made by the alleged receiver, on the papers on which the injunction was granted, to modify the same by striking out that part of the order specially restraining the receiver from taking possession, on the ground that the injunction in that respect was one which this court could not legally or properly grant, and that on the petition and affidavits the receiver’s title appeared to be a vested title, that by operation of law on the facts stated he was in possession, and that therefore this court could not divest him of the possession of the property, nor should by injunction restrain him from taking possession of it. Both motions have been heard together.

The petitioning creditors, to meet the motion to dismiss the petition, have produced the affidavit of one of said creditors, being the same person who signed as the thirty-second, the petition or request presented in the supreme court, to the effect that the petition was presented and is intended to be prosecuted in good faith.

The petitioning creditor who was also the bookkeeper makes an affidavit used by the petitioning creditors in opposing this motion, but he makes no explanation of his inconsistent oaths—the one in this court and the one in the State court—except that he says he did not know how many creditors would sign and verify the petition after him ; and both of these petitioners alleged that they acted under the advice of counsel.

Another of the petitioning creditors makes affidavit to what occurred in the supreme court at the hearing before the judge at 2 o’clock on May 7, a few hours before he verified the petition, at which hearing coun[154]*154sel urged the right of these thirty-five creditors, of whom he was one, to be heard; but he says nothing as to his good faith in making his verification to the petition.

The other three petitioning creditors make no affidavits, but on behalf of the petitioning creditors is presented a great mass of papers, most of which were used in the actions in the supreme court, which, it is claimed by the counsel for Wormser and Kingsbury and their creditors, tend to show that the action of Keiler and his attorneys in said actions in the supreme court have been oppressive to his copartners and to the creditors of the firm, especially in procuring the appointment of an unsuitable person, as it is claimed, as receiver; and that the action of the court in the appointment of the receiver was oppressive and unjust; that Keiler has no real interest in the property, and has been guilty of gross violations of the partnership relation, and has improperly withdrawn the funds of the partnership ; and that his action and the proceedings therein were parts of a plot arranged between him and said Lewis and other persons to ruin his co-partners and get possession of the property of the firm; as to all which matters it is proper to say there are on the other side counter statements, denials, explanations and recrimination, the merits of which I have had no occasion to examine.

It appears from these papers that the suit of Keiler against Wormser and Kingsbury was commenced April 25, 1378, and on the same day an injunction was granted against their interfering with the firm property, pending the decision of the plaintiff’s motion for the appointment of a receiver.

That on April 27, Wormser and Kingsbury commenced an action against Keiler, and obtained an injunction against him from interfering with the firm property pending the motion of the plaintiffs in that [155]*155action for the appointment of a receiver ; that each of the parties, in their complaint, charged against the other party various acts injurious to the firm and acts in violation of the duties of partners.

Both motions for the appointment of a receiver came on before the same judge who had granted the injunctions on May 6, and he, after a hearing, announced in writing, on May 7, his decision or opinion, which concluded as follows : “ Fred. Lewis appointed receiver, bonds $100,000.” The formal order was not signed by the Judge till the next day, May 8, and when signed, it was dated as of May 7.

At one o’ clock on May 7, notice was served on the attorney of Wormser and Kingsbury for the settlement of the order at two o’clock the same day.

All the parties appeared, and the counsel for Wormser and Kingsbury asked and obtained a delay of the settlement of the order till May 8, at ten o’clock, to prepare amendments to the proposed order.

On the same afternoon, May 7, the creditors’ petition in bankruptcy was prepared and presented to this court by different counsel, and the order to show cause thereon, and .the injunction, were issued by this court and served on the alleged bankrupt, Keiler, and his attorneys, and the said Lewis.

It is insisted on the part of said Keiler, that the adjournment of the settlement of the order was asked for and obtained deceitfully and for the purpose of commencing these proceedings in bankruptcy.

This is denied under oath by the counsel who asked for and obtained the adjournment, and I give full credit to his statement to that effect.

It is evident, however, that the delay thus obtained was availed of by some of the creditors, who had asked the appointment of Wormser and Kingsbury as receivers, and who felt aggrieved by the appointment of Lewis, for the purpose of preparing and presenting [156]*156the petition and obtaining the injunction now in question, and this was done with the aid and knowledge of Wormser and Kingsbury.

It does not seem to me that the fact that the delay so obtained was thus availed of, would be a sufficient reason for this court’s declining the jurisdiction of the petition or dismissing it.

If it was, as is suggested, any indignity to the State court, this court cannot punish for it, and if the proceedings in this court are regular, the motives of the parties in instituting the proceedings are immaterial, nor is it any objection to the regularity of these proceedings that the alleged bankrupts, Wormser and Kingsbury, promoted and advised them.

There is no doubt, however, of the power and duty of this court to set aside summarily any process obtained by fraud and deception practiced upon itself (In re Scammon, 11 B. R. 280).

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Cite This Page — Counsel Stack

Bluebook (online)
14 F. Cas. 210, 4 Abb. N. Cas. 150, 18 Nat. Bank. Reg. 10, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-keiler-nysd-1878.