Rubenstein v. Lottow
Opinion
The undisputed facts out of which these two suits in equity have arisen are in substance as follows.
In April, 1911, one Setlin, who theretofore had been a shipping clerk in the employ of an overall company on Hanover Street in Boston, set up in business for himself. To use his own words, the business consisted in "jobbing; children’s dresses and muslin underwear.” The defendant Lottow was an uncle of Setlin. His business was manufacturing “ladies’ and children’s dresses.” He assisted his nephew Setlin in setting up in business; he sold him goods on credit and spoke a good word for him when Setlin referred persons to him. In July, 1911, Setlin took in as a partner one Smith, who was an uncle of Setlin and a brother-in-law [159] of Lottow. When Setlin began in April, 1911, he put $300 into the business. It appeared from an account of stock taken at the time he took Smith into partnership that he had $300 in the business at that time; Smith put $300 into the business, $75 of which was his own and $225 of which he borrowed from Lottow. The name of the new firm was "S. & S. Manufacturing Company.”
After January 1, 1912, at any rate, the business of the firm was not profitable. The firm was indebted to Lottow in a considerable sum for goods sold to the firm. On June 11, June 22, July 5 and July 25, the firm paid Lottow sums amounting to $893.20 on account of their indebtedness to him. On July 30, 1912, the partnership was dissolved by Smith retiring from the firm. To induce him to retire Setlin paid Smith $100 in cash and gave him his note or, notes for $200 on Lottow’s agreeing to take it or them on account' of his (Smith’s) indebtedness to him (Lottow). All the partnership assets were assigned to Setlin, and Setlin agreed with Smith to pay all partnership debts. At the same time Setlin assigned to Lottow substantially all of the book accounts due to the partnership, amounting to $1,673.25; he also gave to Lottow notes amounting in the aggregate to $500. The two were equal in amount to the indebtedness theretofore due from the partnership to Lottow. Thereafter Setlin undertook to carry on the business on his own account. After June 1 Lottow sold no more goods to the firm or to Setlin, but he furnished Setlin with samples and after July 30 he filled orders taken by Setlin through the use of these samples, on Setlin’s assigning to him (Lottow) the accounts due for such sale. When Setlin took over the partnership assets he had some stock on hand, and thereafter he made some purchases. Between July 30 and October 3, 1912, Lottow’s clerk, Sedlis, advanced to Setlin $723.39, on receiving from Setlin book accounts amounting to $920.08, due for sales of goods made by Setlin after July 30, 1912. These advances were made from time to time between July 30, 1912, and October 3, 1912. Of these accounts receivable amounting to $920.08, the judge who heard the case found that Sedlis had collected $709.91, and that the balance of the accounts was of uncertain value.
On October 3, 1912, an involuntary petition in bankruptcy [160] was filed against Setlin. He subsequently was adjudicated a bankrupt, and the plaintiff, Rubenstein, was appointed trustee of his estate.
Later these two bills were brought by the trustee so appointed, one against Lottow and the other against his clerk Sedlis. The two bills in equity were tried together. The judge made findings of fact on February 27, 1913, and on July 24, 1913, a final decree was entered, a copy of which is set forth below.
Footnotes
220 Mass. 156 (Rubenstein v. Lottow) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.