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IN RE REALTY ASSOCS. SECS. CORP.

July 11, 1941

In re REALTY ASSOCIATES SECURITIES CORPORATION; REALTY ASSOCIATES SECURITIES CORPORATION
v.
WOHL et al.



The opinion of the court was delivered by: ABRUZZO

ABRUZZO, District Judge.

This is a motion by order to show cause for an order to punish Martin Wohl and Harry Wohl, and each of them, for contempt of court and committing the said Martin Wohl and Harry Wohl to imprisonment and/or finding them in the amount of at least $30,000, to be paid to the clerk of this court, for wilfully disobeying and failing to comply with the order of this court made and dated January 26, 1939.

On July 10, 1933, the petitioner, Realty Associates Securities Corporation, was duly adjudicated a bankrupt. On January 26, 1939, an order was made by this court directing and ordering the respondents, Martin Wohl and Harry Wohl, to file an account with the clerk of this court within thirty days after entry of the said order, of all rent collections and disbursements made by them as agents of the petitioner herein from July 10, 1933, to August 25, 1933. The order further directed Martin Wohl and Harry Wohl to pay to the clerk of this court the sum of $10,939.75, which was found to be in their possession or under their control as agents of and belonging to the said petitioner.

 The affidavits submitted indicate that the further accounting required by the order of January 26, 1939, for the period of time from July 10, 1933, to August 25, 1933, would show that Martin Wohl and Harry Wohl had in their possession approximately $30,000 which belonged to the petitioner. This amount is based upon the collections and disbursements for that period which these respondents had made during that time. The basis for this conclusion is undoubtedly derived from the knowledge which the petitioner had of the collections made by these individuals.

 The order was appealed and affirmed in the United States Circuit Court of Appeals, Second Circuit, 98 F.2d 722. A writ of certiorari to the United States Supreme Court was denied, 305 U.S. 656, 59 S. Ct. 252, 83 L. Ed. 425. The terms of the order, dated January 26, 1939, have not been complied with in any way.

 Benjamin Jaffe, an attorney, appeared in this proceeding as the attorney for Martin and Harry Wohl; and service of the proper orders were made upon the said attorney. Rule 16 of the Rules of the United States District Court for the Eastern District of New York. It appears that after the entry of the order herein, Martin Wohl and Harry Wohl left the jurisdiction of this court and became residents of the Town of Hollywood, State of Florida, where they now reside. An ancillary proceeding was instituted in the United States District Court, Southern District of Florida, but it was dismissed.

 The record indicates, therefore, that Benjamin Jaffe was the attorney of record for these two respondents at the time the order to show cause and the petition to punish them for contempt was served upon him. The decisions hold that this is sufficient service.

 It has been impossible to execute a warrant and order of arrest of the said Martin and Harry Wohl as these respondents are beyond the jurisdiction of this court.

 No trustee was ever appointed in the above-entitled bankruptcy proceeding. Two receivers were appointed, one of whom resigned and the other of whom was discharged by order of this court after the composition of creditors had been confirmed on April 6, 1934. The order confirming the composition agreement expressly reserved jurisdiction in this court to enforce any order of this court or the referee.

 Before the composition had been confirmed, turnover proceedings before the referee resulted in a turnover order, dated December 11, 1933, directing the said Martin Wohl and Harry Wohl to turn over to the receiver certain moneys and to account to him for certain additional moneys.

 Upon the failure to comply with the order of the referee, they were cited as being in contempt in refusing to comply with the order of the referee. This all occurred prior to the confirming of the composition.

 No order has ever been entered dismissing or closing the said bankruptcy proceeding. It is, therefore, evident that this bankruptcy proceeding is still open and the court has jurisdiction. See In re Rubin's Department Store, Inc., 7 Cir., 75 F.2d 731; and Murphy, Gorman & Waterhouse v. Manufacturers' National Bank, 1 Cir., 30 F.2d 389.

 These two respondents are in wilful contempt of this court.

 Upon the return date of this motion, Benjamin Jaffe appeared and filed an affidavit to the effect that he no longer represented the respondents on the present application and had no authority to do so. He stated that he became the attorney for the Wohls during the appeal in the United States Circuit Court of Appeals, Second Circuit. Emanuel Harris, an attorney, as counsel, made the application to the United States Circuit Court of Appeals for a rehearing, and an application to the United States Supreme Court for a writ of certiorari. It is claimed by Benjamin Jaffe that Harris was the last attorney who represented the respondents herein.

 Mr. Jaffe admits that a copy of this order to show cause and the petition in the instant application was served upon him. He returned the papers to the moving attorneys, claiming that he had no authority to represent Martin and Harry Wohl.

 On November 23, 1937, an order was made substituting Benjamin Jaffe in the place and stead of Peter A. McCabe as attorney for Martin and Harry Wohl. Later, Mr. Jaffe subscribed the brief on appeal to the Circuit Court of Appeals. The petition for rehearing was accompanied by a certificate of counsel made by Benjamin Jaffe, in which he stated that he appeared for Martin and Harry Wohl, and that he represented them in their appeal in the United States Court of Appeals.

 The cover in connection with such petition for rehearing bears the endorsement "Benjamin Jaffe, attorney for appellants, Emanuel Harris, of counsel. " (Italicizing the court's). Thereafter, Mr. Jaffe requested a notice of settlement of the order to be entered on the mandate of the United States Circuit Court of Appeals.

 On January 24, 1939, which was after the writ of certiorari was denied, Mr. Jaffe filed a memorandum in opposition to the proposed order on mandate, which was subscribed "Benjamin Jaffe, attorney for Martin Wohl and Harry Wohl, Appellants".

 On January 26, 1939, an order was signed on the mandate of the United States Circuit Court of Appeals, making such mandate the order and judgment of this court. A copy of this order was served on Benjamin Jaffe, as attorney of record, on January 27, 1939, which ...


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