Shainwald v. Lewis

69 F. 487, 7 Sawy. 148, 1895 U.S. Dist. LEXIS 45
CourtDistrict Court, N.D. California
DecidedAugust 14, 1895
DocketNo. 260
StatusPublished
Cited by2 cases

This text of 69 F. 487 (Shainwald v. Lewis) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shainwald v. Lewis, 69 F. 487, 7 Sawy. 148, 1895 U.S. Dist. LEXIS 45 (N.D. Cal. 1895).

Opinion

MORROW, District Judge.

The bill in equity in this case seeks to revive, continue, and enforce a judgment and deci'ee of this court, rendered on June 14, 1880 (6 Fed. 753), in case No. 241. This last decree had revived and continued in force a judgment and decree made in an original suit, No. 221, on November 5, 1880 (6 Fed. 753). This is, therefore, the second suit which has been brought to revive and continue in force the judgment originally rendered in case No. 221 in favor of the complainant. There is no change -of parties or of their interest. This bill and the proceedings under it must be regarded, therefore, as merely ancillary and supplementary to the original suit in case No. 221 and the subsequent ancillary suit in case No. 241.

That the nature and scope of the present bill, as well as the relief originally afforded by the former judgments of this court,-and now sought to be enforced, may be the better understood, it will be necessary to refer to the early history of the proceedings out of which the present action has taken rise. During the years 1875, 1876, 1877, and the early part of 1878, a copartnership under the firm name of Schoenfeld, Cohen & Co. was engaged in a mercantile business in San Francisco, selling willow ware, fancy goods, toys, and notions. On the 26th day of April, 1878, Louis S. Schoenfeld and Simon Cohen, members of this copartnership, filed their petition in this court to be adjudicated bankrupts, as copartners and as individuals, and to be discharged from their debts, under the bankrupt act. The petition sets forth that Isaac Newman, a member [489]*489of the copartnership, had refused to join in the petition, and it was asked that he be made a party to the proceedings. -In a schedule annexed to the petition, the debts of the copartnership were set forth, amounting to $44,257.25, and in another schedule, purporting to contain an inventory of the estate of the copartnership, it was alleged that “one H. Lewis has in his possession mines, property, and accounts due the firm of Schoenfeld, Cohen & Co., the value of which is $68,989.18, said property, money, and accounts having been obtained by fraud on the part of the said Lewis, and held adversely to said firm.” It was also stated in this petition that the accounts, books, and papers of Schoenfeld, Cohen & Co. were in the possession of the said H. Lewis. No other property or assets of any kind or description belonging to either the firm or to its individual members a]>neared in the petition or schedule. In other words, the petition alleged that the entire property of this co-partnership, together with all the books of accounts and papers, had passed into the hands of one IT. Lewis, who had obtained the same by fraud. The petition was referred to the Register in bankruptcy, and on December 6, 1878, Louis S. Schoenfeld, Simon Cohen, and the firm of Schoenfeld, Cohen & Go. were adjudicated bankrupts, individually and as copartners. The first meeting of creditors was held, on March 29, 1879, when Herman Shainwald, of San Francisco, was chosen assignee of the estate. He qualified on April 7, 1879, and immediately entered upon the discharge of his duties as such assignee. On October 3, 1879, Shainwald, as assignee, filed a bill in equity in this court against Harris Lewis (the party referred to as H. Lewis in the petition in bankruptcy) for the purpose of having a certain judgment, execution, sheriff’s sale, and other proceedings in a suit at law in the Nineteenth district court of this state, entitled “Harris Lewis vs. Louis S. Schoenfeld, Isaac Newman, and Simon Cohen,” declared to be a fraud upon the creditors of the firm of Schoenfeld, Cohen & Co., and upon the assignee of such firm in bankruptcy, and upon Simon Cohen, and upon said firm; also, for the purpose of having it declared and decreed that certain promissory notes, upon which the said suit was brought, to wit, a note for $17,-000, a note for $8,000, and a note for $5,000, were fraudulent and void, as against said firm, for want of consideration; also, for the purpose of having it declared and decreed that certain transfers of money, bills of lading, promissory notes, and other property made to Harris Lewis by said Schoenfeld and Newman were fraudulent and void, as against the creditors of said firm, the assignee, and Simon Cohen, a member of said firm; and also for the purpose of having it declared and decreed that Harris Lewis was a trustee for the benefit of the assignee of all the moneys, bills of lading, accounts, merchandise, chattels, and other property obtained by said Lewis through or by means of the said action, attachment, judgment, execution, or sheriff’s sale, or transferred or delivered to or received by him from said Schoenfeld, from said Newman, or from any other person; and, also, for such further and other relief, etc.; also, for an injunction and a writ of ne exeat. This case is No. 221 in the records of this court, and is so designated to dis[490]*490tinguish it from other actions between the same parties. Though the suit was brought subsequently to the repeal of the bankrupt law (Act June 7, 1878; 20 Slat. 99), the right to sue was within the proviso of the repealing act saving' all further proceedings in any pending bankruptcy matter. Other suits have also been instituted against persons other than Harris Lewis, who had participated with him in fraudulently obtaining the assets of said firm. The litigation involved in these suits has been complicated, bitter, and protracted, engaging the attention of this court, in some form or another, for now 16 years past.

The testimony taken in the original suit (case No. 221) disclosed a series of fraudulent transactions devised and executed for the purpose of enabling the firm of Schoenfeld, Cohen & Co. to defraud its foreign and Eastern creditors out of the several amounts due them, aggregating more than $30,000. It appears that in January, 1877, it was determined between Schoenfeld and Newman that Schoenfeld should proceed to the Eastern states and Europe and procure a large stock of goods on credit. In this he was successful. Beturning. to San Francisco in June, 1877, Newman reported the firm in an embarrassed condition, whereupon certain fraudulent notes, amounting to about $30,000, were executed by Newman and Schoenfeld in the name of the firm, and placed in the hands of Harris Lewis, to enable him to wreck the concern by bringing an attachment suit against the firm in the state court. This suit was accordingly commenced June 27, 1877, and the property in the hands of the firm attached. An attorney was employed for the ostensible purpose of defending the suit, but the real purpose was to enable Lewis to obtain judgment and execution in the case, and a sale of the property of the firm, and this purpose was in fact accomplished. Lewis, by an arrangement, became a purchaser at the sheriff’s sale of a large part of the merchandise and accounts of the firm at a very low price, whereupon he opened a store with this stock in another part of the city, in the name of H. Lewis & Co. Schoenfeld and Newman were, however, connected with this new store under an agreement to divide the proceeds after certain claims had been paid. It does not appear that Mr. Cohen was a party to this conspiracy, or knew the character of the transactions involved in its execution. The amount realized by H. Lewis & Co. from this property, near the end of the year 1877, was about $69,000.

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Bluebook (online)
69 F. 487, 7 Sawy. 148, 1895 U.S. Dist. LEXIS 45, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shainwald-v-lewis-cand-1895.