Katzenstein v. Prager

67 S.E. 792, 67 W. Va. 343, 1910 W. Va. LEXIS 29
CourtWest Virginia Supreme Court
DecidedMarch 29, 1910
StatusPublished
Cited by3 cases

This text of 67 S.E. 792 (Katzenstein v. Prager) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Katzenstein v. Prager, 67 S.E. 792, 67 W. Va. 343, 1910 W. Va. LEXIS 29 (W. Va. 1910).

Opinion

KOBINSON, PRESIDENT:

Isaac Prager & Son, insolvent merchants at Parkersburg, made a general assignment for the benefit of creditors on December 29, 1896. Previous to this assignment, on that day, an attachment was levied on the property which was transferred by the assignment. This attachment was in favor of Katzenstein, of Cincinnati. On the second day thereafter Friedman, of Baltimore, sued out attachments against Isaac Prager & Son and Isaac Prager individually, which were levied on the same property. On that day Katzen-stein instituted his suit in chancery for the assertion of his attachment lien, for the appointment of a receiver of the prop■erty, and for a proper distribution of the assets of the insolvent firm among its creditors. And on the same day Friedman also instituted suits in chancery, setting up his attachment liens, assailing the assignment as fraudulent on the part of Isaac Prager & Son, Keller, the trustee, and Katzenstein, and seeking to overthrow the assignment as a scheme conceiyed and promoted by them for the purpose of hindering and delaying creditors and avoiding the payment of debts. The court refused to appoint the receiver prayed 'for in the Katzenstein suit and the trustee proceeded to administer the assets for the benefit of the cerditors.

The trustee made sale, at auction, of the stock of goods transferred by the assignment and Katzenstein became the purchaser for the sum of $16,250.00'. The First National Bank of Park-ersburg had also proceeded against the insolvent firm by proceedings in attachment and by a suit in chancery. A part of the goods purchased by Katzenstein were taken from him by the sheriff, under the bank’s attachment, and were subjected to the debt claimed by the bank. The litigation on behalf of the bank was long pending. It was finally in this Court. A decision, reported in 50 W. Ya. 660, was entered here in March, 1902. Until the date of that decision the other proceedings in relation to the estate of the insolvents rested. It seems that all who were interested awaited the determination of the questions involved in the suit of the bank. In the meantime, Keller, [345]*345the trustee in the assignment, became wholly incapacitated by mental derangement.

In April, 1902, soon after tbe bank’s case was determined here, Friedman1 filed an amended and supplemental bill in that one of his- chancery suits which claimed his debt as due from the insolvent partnership. In his other suit, he claimed the debt from Isaac Prager individually. Yet he asserted against the firm that it had assumed this individual debt of Isaac Prager. And by an action of assimpsii, Friedman also claimed the same indebtedness from Paul Prager, who was not a member of the insolvent firm, averring that he had assumed to pay the indebtedness. Friedman made Katzenstein a party to the amended and supplemental bill, renewed his attack upon the assignment and the sale to Katzenstein thereunder as fraudulent, asserted that his attachments were liens upon the assets, demanded an accounting by the trustee,, and prayed the appointment of a receiver to collect and administer the assets under order of the court. He stated a ease similar to that which the bank had sustained. In August, 1902, a demurrer to this bill was sustained. Later, he filed a second amended and supplemental bill. In this suit Katzenstein appeared, demurred, and fully answered.

On August 12, 1902, Katzenstein filed an amended and supplemental bill in his suit. He made Friedman a party, averred the incapacity of the trustee, again asked the appointment of a receiver, prayed a settlement of the trustee’s accounts, and sought a distribution of the assets among the creditors. He expressly assailed the Friedman suits as inconsistent, fraudulent, and vexatious. He emphatically averred that Friedman held no debt against the insolvent firm, that the debt which Friedman claimed was the individual debt of Isaac Prager, and that the firm had not assumed to pay it. The debt claimed by Friedman was specifically and directly assailed and its existence as a claim against the insolvent firm was brought into issue. Katzenstein, in this amended and supplemental bill, also claimed the right to be subrogated to the lien that had been declared in favor of the bank in its suit for the amount realized by a sale of the goods taken from him. By decree of February 13, 1903, the death of Keller, the trustee, having been suggested, the suit was revived as against his administrator, a receiver of [346]*346the estate of the insolvents was appointed, and the canse was referred to a commissioner for the ascertainments, accounting-, and settlement usually demanded in cases of its character. This suit of Katzenstein was not matured as to Friedman by service of process, order of publication, or appearance, but after the death of Friedman there was a revival against his executors and an order of publication as to them. At this time, July, 1904,. the cause was pending on the order o'f reference. The executors of Friedman appeared before the commissioner, and filed petitions addressed to the commissioner in which they set forth the pendency of their suits in the same court. They stated that this appearance was in answer to the command of the order of publication that they appear and do what was necessary to protect their interests. They suggested to the commissioner that he report to the court the pendency of their suits, the rights claimed by them in those suits, and the fact that if they prevailed in the same they would be entitled to a lien on the assets of the insolvent estate so as to take precedence over other creditors. They asked that their proceedings and suits be taken and considered as a part of their petitions, and offered to file certified copies from the records if the commissioner should desire them to do so. The gist of these petitions was that the commissioner should report to the court the pendency of the suits of the petitioners. They sought nothing else. They did not seek the allowance of the Friedman debt. In one of them the petitioners in fact object to any action of the commissioner upon that debt. Nor do these petitions pretend to answer the Ivatzenstein bill. They make no reference to any of its allegations. They do not answer the allegation that the Friedman debt is the individual obligation of Isaac Prager — that the Friedman debt does, not bind the assets of the insolvent firm.

Lehman & Cohen and Strauss Brothers filed petitions to the commissioner which were the sime in substance and effect as those filed by Friedman’s executors. These parties also had suits pending which were similar to those of Friedman’s executors. By these suits they sought to fix liens on the assets of the insolvent firm by setting up the same grounds of fraud in the assignment that were asserted in the Friedman suits. The commissioner in his report notes the filing of all these petitions under the heading: “The claiip. of Ménica Friedman, [347]*347Lehman and Cohen and Strauss Brothers.” That part of the report closes with the following: “There being no proof of any of these debts yonr commissioner could not report them as proven debts and it appearing that suits are pending in which they will be directly adjudicated, your commissioner believes that those eases should be disposed of before he can report upon the debts and is of the opinion that if those parties are successful in their suits that it is most probable that it will be decided that they have a prior claim to the property of Prager and Son involved in this suit.”

Friedman’s executors, Lehman & Cohen and Strauss Brothers filed exceptions to the report of the commissioner.

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Bluebook (online)
67 S.E. 792, 67 W. Va. 343, 1910 W. Va. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katzenstein-v-prager-wva-1910.