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ANDREWS v. ANDREWS & ANDREWS

November 24, 1941

ANDREWS
v.
ANDREWS & ANDREWS, Inc.



The opinion of the court was delivered by: MOSCOWITZ

MOSCOWITZ, District Judge.

These are two motions; one, by the plaintiff G. D. Andrews for an order "adjudging Thomas J. McErlane and Julian E. Goldberg in contempt of court, directing their arrest and imprisonment until they shall have purged themselves of their contempt, and until they shall have paid the fine which may be imposed upon them, for the damages suffered by virtue of their misconduct." The other motion by Julian E. Goldberg for an order "quashing the service of the said order to show cause upon Julian E. Goldberg of 12 South 12th Street, Philadelphia, Pennsylvania, and to dismiss the proceedings to punish said Julian E. Goldberg for contempt, upon the ground that the service of said order to show cause was defective, void and improper, in that the alleged service of said order to show cause was effected outside of the jurisdiction of the United States District Court for the Eastern District of New York, and outside of the State of New York, to wit, at the City of Philadelphia, State of Pennsylvania, and that by reason of said fact, this Court has no jurisdiction over the person of said Julian E. Goldberg."

Although the motion to quash was argued on September 8, 1941, on consent of the parties the briefs were not submitted until November 14, 1941.

 A motion was made by the plaintiffs for a receiver of the assets of Andrews & Andrews, Inc., the defendants. The Court directed that notice of such application be given to all of the creditors on May 8, 1941, at two o'clock. Such notice was mailed to the creditors on May 5, 1941 by the plaintiffs attorneys.

 At the hearings that were had before the Court a number of creditors were present, some in person and some through their attorneys. Those who wished to appear had their appearances noted by the reporter who was recording the proceedings. An examination of the papers discloses no appearance by Mr. McErlane. Mr. McErlane was present at one or more hearings.

 G. D. Andrews, one of the plaintiffs, has submitted an affidavit, verified July 29, 1941, in which he states:

 " At the hearings, Mr. McErlane appeared personally, recorded his appearance upon the court records, addressed the Court on his own behalf, testified upon direct examination, submitted to cross-examination by the attorneys who appeared, and himself participated in the cross-examination of A. Laupheimer, one of the witnesses before the Court. Furthermore, he was in court on June 24th, 1941, the date of the last hearing in this cause, when Judge Moscowitz advised counsel of the order which he proposed to enter, directed that the order be settled on notice, and fixed June 26th, 1941, as the date when the order would be settled and signed. By that order, the Court, among other things, adjourned sine die my application for the appointment of a receiver of the defendant herein, appointed A. Louis Oresman, Esq. as an auditor, accountant and special master, and specifically

 "ordered that pending further order of this Court, all interested parties herein and all other persons, firms, and corporations be and they hereby are restrained and enjoined from instituting any action or proceeding either in law or at equity against the defendant, from levying any warrant of attachment against the property and assets of the defendant, from filing any involuntary petition in bankruptcy against the defendant, or from maintaining any other legal process against the defendant or its property, real or personal, tangible or intangible.'

 "Notwithstanding the explicit mandate contained in Judge Moscowitz's order, and on June 28th, 1941 -- only two days after Judge Moscowitz's order was entered -- Thomas J. McErlane verified a petition which requested the United States District Court for the Eastern District of Pennsylvania, to appoint an ancillary receiver for the purpose of seizing property, assets and effects of Andrews & Andrews, Inc. in the State of Pennsylvania. To that petition, McErlane annexed a certified copy of the order of Judge Moscowitz, revealing his complete and comprehensive knowledge of each and every term and provision contained therein. That petition by McErlane was filed by Julian E. Goldberg, as his attorney. Mr. Goldberg, having annexed a certified copy of Judge Moscowitz's decree to the petition which he filed, was likewise familiar with each and every term thereof. Notwithstanding the stay contained in the order of Judge Moscowitz, both McErland and Goldberg persisted in filing the petition and setting a day for the hearing thereon."

 Sigmond J. Beck, an attorney associated with the firm of attorneys representing Mr. Goldberg upon the application to quash the service of the order to show cause, has submitted on affidavit, verified August 12, 1941, in which he states:

 "That your deponent has examined the minutes of the proceedings had before this Court in the above entitled action and has likewise examined certain of the records of this Court. That such examination was made with particular reference to the statement contained in the affidavit of G. D. Andrews, verified July 29, 1941, in which said affidavit it is stated, among other things: 'Among those who appeared and became a party to the proceedings pending before Judge Moscowitz, was one Thomas J. McErlane, of 3125 Tulip Street, Philadelphia, Pa., who asserted a claim against Andrews & Andrews, Inc. for $630.55', and as to that portion of the said affidavit which reads (being underscored in the original): 'At the hearings Mr. McErlane appeared personally, recorded his appearance upon the Court records, addressed the Court on his own behalf, testified upon direct examination, submitted to cross-examination by the attorneys who appeared, and himself participated in the cross-examination of A. Laupheimer, one of the witnesses before the Court.'

 "That your deponent examined the minutes of the proceedings had on May 5th, May 8th, June 4th, June 20th and June 24, 1941.

 "Deponent believes the first reference to the said McErlane is contained in the minutes of the June 4, 1941 proceedings. In those minutes reference is made to one 'Thomas J. McElroy', who deponent assumes was intended to refer to Thomas J. McErlane. At the hearing at that time, it appears that the said McErlane (or McElroy) was personally present in Court. As to recording his appearance upon the Court records, as stated in the affidavit of G. D. Andrews, and as to the statement that the said McErlane addressed the Court on his own behalf, it appears that Judge Moscowitz asked, in open Court, whether any of the people who had written him were in Court and then he asked the name of a person who responded, which name is recorded in the minutes as 'Thomas J. McElroy'. The said person was asked by the Court as to whether he was a creditor, to which he answered 'Yes', and stated the amount of his claim, and also in answer to a question from the Court as to where he was from, stated: 'Philadelphia'. He at that time described the services performed by him and the nature of the claim, similarly stating that he had written a letter to the Court. The Court asked if he understood what was going on, to which he answered in the affirmative, and when asked by the Court as to what his attitude toward the situation was, stated that he believed he would get nowhere unless a Receiver be appointed.

 "As to the statement contained in the affidavit of G. D. Andrews that the said McErlane testified upon direct examination and submitted to cross-examination, it appears that on June 24, 1941, at a hearing before the Court, a person identified in the minutes as Mr. McLean, ...


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