Abbildungen der Seite

not a creditor was warranted, reversed the order, except as to the portion thereof denying the motion to reopen-in that respect, affirming the order. 250 Fed. 997, -- C. C. A.

Thereafter Nevins made an application for an order opening this proceeding and for the election of a trustee to administer the assets owned by him (Nevins) at the time of his bankruptcy and not scheduled by him, subject to the order and control of this court. This motion was granted, and an order made opening the proceeding for the purpose of proceeding therein according to law and directing that the proceeding be referred to Virtus L. Haines, Esq., as referee, to take such action as may be necessary in the premises, to conduct the proceeding, and to administer the assets according to law. The referee, after appointing a trustee, made an order finding that the People's Trust Company, acting as executor of the estate of Edward Johnson, deceased, is not a creditor and has no right to file a proof of claim, and therefore had no right to examine the bankrupt or witnesses, and that such property of the bankrupt Nevins as may have come into the hands of the trustee, is surplus property, to be disposed of as provided for by the Bankruptcy Act, and directing that the trustee be authorized to deliver such property of the former bankrupt Nevins as may have come into his possession, subject to the payment of the expenses of this proceeding, to said Nevins, or such other person from whom the same was received, and for that purpose that he execute and deliver all necessary instruments to effectuate such purpose. The former bankrupt Nevins has now moved to confirm this order, while the People's Trust Company has filed a petition that the order be reviewed, claiming that the referee had no power to appoint a trustee. All these facts appear to have been before the court when the order opening the proceeding was made. Whether or not I would have made an order opening the proceeding under such circumstances, I am of the opinion that orderly procedure requires that I should not make any order which would in effect review an order already made. There could have been no reason for opening the proceeding and referring the matter to the referee, except to permit the latter to make such an order as is now before the court.

Accordingly the motion is granted, and the order made by the referee, directing the trustee to tum over property, is affirmed.

In re GRAFF et al.

Petition of PEOPLE'S TRUST CO.
(Circuit Court of Appeals, Second Circuit. December 11, 1918.)

No. 91.

It is within the power of a bankruptcy court to reopen a bankruptcy proceeding on petition of the bankrupt, although settlement has been made with all creditors, if satisfied that there are unadministered assets which should be administered for his benefit.

Petition to Revise Order of the District Court of the United States for the Eastern District of New York.

In the matter of G. Edward Graff and Thomas F. Nevins, individually and as partners, bankrupts. On petition of the People's Trust Company as executor, to revise order of District Court (255 Fed. 239). Petition dismissed.

See, also, 250 Fed. 997, C. C. A.

Walter H. Merritt, of New York City (David W. Kahn, of New York City, of counsel), for petitioner.

J. Herbert Watson, of Brooklyn, N. Y. (Michael M. Helfgott, of Brooklyn, N. Y., of counsel), for bankrupts.

Before WARD, ROGERS, and MANTON, Circuit Judges.

WARD, Circuit Judge. This is a petition by the People's Trust Company, as executor of Edward Johnson, deceased, to revise an order of Judge Garvin, affirming the order of the referee (255 Fed. 239), to whom the matter had been referred, reopening the bankruptcy of G. Edward Graff and Thomas F. Nevins, individually and as copartners composing the firm of G. Edward Graff & Co., bankrupts, appointing a trustee and directing him to turn over to Thomas F. Nevins, one of the former bankrupts, certain unadministered assets belonging to him, which he alleges were inadvertently omitted from his schedules, notably 412 shares of stock in the Brooklyn Citizen standing in his name.

The People's Trust Company as executor of Johnson, had previously filed a petition to reopen the estate for the purpose of having this same property administered, which petition Nevins opposed and Judge Chatfield denied. His order in this respect was affirmed by us on the ground that neither Johnson, deceased, nor the People's Trust Company, his executor, were creditors of the bankrupts. 41 Am. Bankr. Rep. 32, 250 Fed. 997, - C. C. A. - We have no disposition to depart from our former decision, and it being res adjudicata between the parties is enough to justify dismissal of this petition to revise.

But we think it proper to consider the petitioner's contention that the District Court was without power to reopen the estate upon the application of the bankrupt, if there were no creditors before the court For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

255 F.-16

to be benefited. We think it within the power of the court to reopen la bankruptcy proceeding, if satisfied that there are unadministered assets which should be administered for the benefit of the bankrupt. Applications to reopen are almost always made by creditors, but we have no doubt the court may in a proper case exercise its discretion, when the fact is presented by the bankrupt. It appeared in the former case, the record of which' is made a part of the present record, that a settlement was made with the creditors all of whose claims were vested in Johnson, as trustee. The method of carrying out the settlement was informal and irregular, but we are satisfied that the creditors received all they were entitled to. Mutual releases were exchanged between Johnson, their trustee, and the former bankrupts; both the trustee and the bankrupts being discharged and the estate wound up. The bankrupt Nevins was therefore entitled to any surplus of assets belonging to him. In his petition to reopen now under consideration he states that the assets in question were inadvertently omitted from the schedules. If they had been scheduled, it would have been the duty of the original trustee to transfer them to him. The result is that his title is clouded, and is denied by the Brooklyn Citizen, which sets up the defense in a pending suit that the stock belongs to the trustee in bankruptcy. Nevins v. Brooklyn Citizen, 171 App. Div. 643, 157 N. Y. Supp. 155. In this way, and perhaps only in this way, can the former bankrupt get the benefit of his property, to which no one else has any claim.

The petition to revise is dismissed.


(Circuit Court of Appeals, Second Circuit. December 11, 1918.)

No. 13.



Motions by both parties for a directed verdict are equivalent to a request for a finding of facts by the court, and both are concluded on the

facts so found by direction of a verdict for one of them. 2. CHAMPERTY AND MAINTENANCE Ow6(1)-PURCHASE OF CLAIM BY ATTORNEY


A purchase by an attorney from his client of a right of action for tort, with intent to sue thereon, is champertous and void, and the purchaser

cannot maintain an action on the assigned cause of action. 3. CONTRACTS m108(1)-LEGALITY-PUBLIC POLICY.

The question whether a contract is void, as contrary to public policy, is to be determined by its general tendency, and if that is opposed to the interests of the public the contract is void, even though in the particular case the intent of the parties may have been good, and no injury to the


In “maintenance" no personal profit is expected or stipulated, the motive being simply to aid a party, with money or otherwise, to prosecute

or defend his suit; while in “champerty" there is a bargain with the Om For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

plaintiff or defendant by which the champertor is to carry on the suit at his own expense, and is to derive some profit out of the thing sued for. if he prevails.

(Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Champerty; Maintenance.]


In Error to the District Court of the United States for the Southern District of New York..

Action at law by Joseph H. Sampliner against the Motion Picture Patents Company and others. Judgment for defendants, and plaintiff brings error. Affirmed. For opinion below, see 243 Fed. 277. Rehearing denied 257 Fed.

- C. C. A. The action is brought by the plaintiff as assignee of the Lake Shore Film & Supply Company (hereinafter called the Lake Shore Company) under the Sherman Anti-Trust Act (Act July 2, 1890, c. 647, 26 Stat. 209 [Comp. St. 88 8820-8823, 8827–8830]), to recover treble damages for injuries alleged to have been sustained by the business and property of the Lake Shore Company. The plaintiff is a citizen of the state of Ohio, and is and has been for the last 25 years an attorney at law practicing in the courts of that state.

The Lake Shore Company is a corporation organized under the laws of the state of Ohio, having its principal place of business in the city of Cleveland. Since its incorporation it has been engaged in the business of dealing in positive motion picture films or subjects, and also in projecting machines and appliances, used, sold, and leased in connection with motion picture exhibitions.

The bill of complaint is long and complicated, and occupies 60 printed pages of the record. It narrates the various steps taken by the defendants in their alleged attempt to drive the Lake Shore Company out of business, and to ruin and destroy its good will and its assets. It is alleged that because of this conspiracy it became necessary for the Lake Shore Company to employ legal assistance and that it became obligated to pay $5,000. On December 28, 1911, the Lake Shore Company assigned to the plaintiff all of its right, title, and interest in any and all of its claims for damages against the defendants, or any of them, by reason of their acts and conduct.

The plaintiff sues as an assignee of the Lake Shore Company to recover $750.000, alleging that the company had been injured in its business up to December 28, 1911, to the extent of $250,000, and that by reason thereof he is entitled under the Sherman Anti-Trust Act of July 2, 1890, and the Act of Congress of Oct. 15, 1914 (38 Stat. 730, c. 323), amendatory thereof, to treble damages, making the sum of $750,000.

The defendants in their answer set up two affirmative defenses—the statute of limitations and champerty. As respects the latter it “alleges, upon information and belief, that at the time of said alleged purchase, it was, and is now, the law of the state of Ohio that an attorney who purchased a demand with full knowledge and notice that the same was contested and would be litigated, and with the intent and for the purpose of bringing an action thereon, was guilty of maintenance and champerty, and got no title to such demand by such purchase which could be enforced either at law or in equity, and that the same was at said time, and still is, the law of the state of New York; alleges. upon information and belief, that the plaintiff purchased the demand set forth in the complaint with full knowledge and notice that the same was contested and would be litigated,' and with the intent and for the purpose of bringing action thereon."

On May 22, 1917, an order was entered granting a separate trial on the issue of champerty, and providing that, if the judgment of the court or the verdict of the jury on that issue should be in favor of the plaintiff, the trial of the other issues should be set for the June or October term. The case came on for trial on the issue of champerty on May 29, 1917. Testimony was taken on behalf of the plaintiff, and at the conclusion thereof the defendants moved for the direction of a verdict, on the ground that the agreement under which the plaintiff brought his action is champertous and void. The plaintifr

also asked for a direction of a verdict. The court directed a verdict for the defendant. Judgment was entered accordingly on July 12, 1917, which was in certain particulars amended on September 5, 1917.

The plaintiff brings the case here on writ of error. He assigns 63 errors, and the assignment of errors covers 104 printed pages of the record.

Rogers & Rogers, of New York City (Gustavus A. Rogers and Saul E. Rogers, both of New York City, John G. White, of Cleveland, Ohio, and C. A. Neff, Joseph Walker Magrauth, and Nathan Frankel, all of New York City, of counsel), for plaintiff in error.

Seabury, Massey & Lowe, of New York City (Samuel Seabury, William M. Seabury, and Frank de R. Storey, all of New York City, of counsel), for defendants in error Smith and Vitagraph Co. of America.

George F. Scull, of New York City (Robert H. McCarter, of Newark, N. J., of counsel), for defendants in error Thomas A. Edison, Inc., Dyer, and Pelzer.

Coudert Bros., of New York City (Samuel Seabury and Charles B. Samuels, both of New York City, of counsel), for defendants in error Berst and Pathe Frères.

Charles F. Kingsley, of New York City, for defendants in error Motion Picture Patents Co., Kennedy, Marvin, and Biograph Co.

Gifford, Hobbs & Beard, of New York City (Alfred P. W. Seaman, of New York City, of counsel), for defendant in error Kalem Co., Inc.

Dwight McDonald, of New York City, for defendant in error Waters.

Before ROGERS, HOUGH, and MANTON, Circuit Judges.

ROGERS, Circuit Judge (after stating the facts as above). The only question it is necessary for us to consider is whether the assignment of December 28, 1911, is champertous and void. If it is void, the plaintiff cannot maintain his action. If it is not void, the judgment must be reversed. The assignment states that“For value received the Lake Shore


hereby sells, assigns, and transfers to J. H. Sampliner all of its rights and interests in and to any and all damages which it has sustained and suffered by reason of injury to its business, because of the unlawful combination and monopoly in restraint of interstate commerce, and in violation of the Sherman Anti-Trust Act, brought about, engaged in and as a result of the unlawful agreement by and between the Motion Picture Patents Company; * * all of said parties having conspired together for the purpose of ruining and destroying the business of the Lake Shore

Company, and contrary to and in violation of the Sherman Anti-trust Act.


[ocr errors]

The testimony shows that the plaintiff had rendered legal services to the assignor as its general counsel in connection with the difficulties in which it found itself with the defendants, and that those services extended over a period from July, 1910, to December, 1911. The plaintiff regarded the reasonable value of his services as worth from $8,000 to $10,000. On December 10, 1911, he was asked by the president of the Lake Shore Company whether he would be willing to bring suit against the defendants, and that he replied that he would bring

« ZurückWeiter »