The opinion of the court was delivered by: BYERS
Hearing on a petition to review an order of a referee in bankruptcy granting a turnover motion made by the trustee. The order is attacked on the ground that the persons against whom it was made took timely objection to the jurisdiction of the referee to adjudicate in a summary proceeding; and that he erred in deciding that a special notice of appearance and claim of adverse title by the petitioners was without merit and showed no colorable title on the part of the latter.
The facts involved are undisputed, namely:
On May 9, 1931, a voluntary petition in bankruptcy was filed by the above named corporation, all the capital stock of which ($7,500.00) was owned by Harris Bloom, the president. The business of the company was the manufacture of women's pocket books and hand bags.
The business was conducted by Harris Bloom and his three sons, Michael, Samuel and Marcus, on 27th Street, in the borough of Manhattan, New York City. The office of the company is said to have been in the home of the son Michael at No. 7402 Twenty-First avenue, in the borough of Brooklyn, where the meager books of the corporation were said to have been kept from and after January 1, 1931, as a matter of convenience. Presumably this was regarded as the principal office of the company.
On the 6th or 7th of May, 1931, Harris Bloom decided to put his corporation into bankruptcy; two days before, the son Michael (who was salesman and general factotum) casually encountered on the street an acquaintance by the name of Herman Holtzman, who at that time was a salesman in the awning and screen business in White Plains; about a year before that he had been a solicitor for the Metropolitan Life Insurance Company.
Michael Bloom stated to Holtzman that the company had a considerable accumulation of such bags which Holtzman could buy for $175.00, and the latter then went to the factory, saw the merchandise in question, and paid the sum named in cash, using in part the proceeds of collections which he had made for his employer; having made the purchase, he walked downstairs to the street on the lookout for a carrier to transport the merchandise; he had no delivery agency in mind, and by chance encountered a truck driver on the street; at that moment of time it occurred to Mr. Holtzman to send the merchandise which he had so purchased to the home of Michael Bloom's mother-in-law; the idea came to him without previous suggestion, and he thereupon telephoned to her and procured her permission to cause the delivery to be made to the cellar of her home, and he thereupon returned to the factory; with the assistance of one or both of the sons of Harris Bloom, he carried the merchandise in two packing cases downstairs, put it on the truck, drove it to the place in question, saw Mrs. Hecker, Michael Bloom's mother-in-law, and, pursuant to the telephone arrangement, delivered the merchandise into her cellar.
Holtzman had never bought pocket books before, and he knew nothing of their value; after leaving them in the said cellar and during the course of the next few days, he went to several stores, offering to sell the pocket books, but he could not give the name of any store or the street on which it was located. He never counted the pocket books, and does not know how many he purchased.
His narrative is contradicted by Michael Bloom only as to an arrangement with Mrs. Hecker to receive the merchandise, which Michael Bloom said he himself accomplished prior to the delivery to Holtzman.
Also Michael Bloom said that Holtzman was in the insurance business at the time, instead of the awning and screen business.
Holtzman decided -- so he says -- that he had made a poor purchase, and therefore sought an interview with Michael Bloom at the latter's home on or about the 9th of May, and, according to the brief of Bloom's attorney, "insisted upon rescinding the sale."
It will be noted that a rescission would have to be accomplished between the buyer and seller.
Michael Bloom repaid $175.00 to Holtzman, having turned that sum in cash over to his father when the deal with Holtzman was made, and having received it back from his father; thereafter he went to Chicago and interviewed Mr. G. J. Lynn, a buyer for Marshall Field & Company, and sold 112 dozen pocket books or bags at $15.50 a dozen, from samples from the lot in question, and the order bears date of May 20, 1931.
There is no dispute that the bags so sold were the ones above referred to, and they were promptly shipped by Michael Bloom from No. 7402 Twenty-First avenue, Brooklyn, New York, ...