Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

HALPERT v. ENGINE AIR SERV.

April 27, 1955

Israel G. HALPERT, as Trustee in Bankruptcy of The Carburetor Corporation, Plaintiff,
v.
ENGINE AIR SERVICE, Inc., Lawrence A. Hauft, Lena P. Hauft, Walter S. Burfoot and May D. Burfoot, Defendants



The opinion of the court was delivered by: GALSTON

This is a plenary suit brought by the plaintiff, as trustee in bankruptcy, to recover property, assets and effects which the plaintiff alleges belonged to the bankrupt at the time of their wrongful seizure by defendant. Plaintiff alleges that the wrongful seizure constituted both a fraudulent and a preferential transfer, recoverable by the plaintiff as trustee under and by virtue of the provisions of Section 70 of the Bankruptcy Act, Section 110, Title 11 U.S.C.A. The complaint also alleges that the action is brought pursuant to Sections 15 and 59 of the New York State Stock Corporation Law. McK.Consol.Laws, c. 59, Section 60 of the General Corporation Law, McK.Consol.Laws, c. 23, Section 65 of the Personal Property Law, McK.Consol.Laws, c. 41, and Article 10 of the Debtor and Creditor Law, McK.Consol.Laws, c. 12.

Prior to the trial, summary judgment in favor of the trustee was reversed and the petition dismissed by the Court of Appeals for the Second Circuit, In re Carburetor Corp. (Halpert v. Engine Air Service, Inc.), 1953, 202 F.2d 75, certiorari denied, 1953, 345 U.S. 957, 73 S. Ct. 939, 97 L. Ed. 1378.

Subsequent to the reversal a new complaint was filed on June 23, 1953. A motion was then brought before Judge Bruchhausen to dismiss the complaint. In an opinion dated October 27, 1953, Halpert v. Engine Air Service, Inc., D.C., 116 F.Supp. 13, Judge Bruchhausen concluded that while the court had jurisdiction of this action under Section 70 of the Bankruptcy Act, all causes of action under Sections 60, subs. a, b, 67, subs. a and b of the Act, 11 U.S.C.A. §§ 96, subs. a, b, 107, subs. a, b were barred by the two year statute of limitations contained in Section 11, subsection e of the Act, 11 U.S.C.A. § 29, sub. e. The opinion also stated that the plaintiff was not precluded from pursuing causes of action grounded on State law which are not barred by the limitation of time provisions prescribed by State law.

 Judge Bruchhausen denied the motion to dismiss the complaint, but did dismiss those causes of action alleged to arise under Sections 60, subs. a, b, 67, subs. a, b of the Bankruptcy Act, and permitted the plaintiff to file an amended complaint.

 After the filing of the amended complaint the defendant moved for judgment on the pleadings. This motion was denied by Judge Byers, D.C., 131 F.Supp. 402, who wrote:

 'If the amended complaint is substantially the same as the original, restricted however to the assertion of a claim for relief under Section 70 of the Act, the law of the case has been established with reference thereto, and the present task is restricted to an examination of the challenged pleading to discover if new issues are presented.

 'That process reveals that again five 'causes of action' are pleaded, in 181 numbered paragraphs, as against 172 in the original complaint. The added paragraphs do not assert new or different alleged causes of action, but merely contain evidentiary and perhaps argumentative allegations which do not expand or alter the nature of the plaintiff's claim for relief as set forth in the original complaint.

 'Motion denied, without prejudice to the renewal thereof in whole or in part at the trial, as the defendants may be advised.'

 The motions were renewed at the beginning of the trial and again at the close of the plaintiff's evidence. The court reserved decision on the motions.

 The Carburetor Corporation, the bankrupt, is a New York Corporation organized in 1948 to engage in the business of overhauling carburetors and other engine accessories. Its authorized capital stock consisted of 2,000 shares of nonvoting stock which was never issued and 3,000 shares of class A with voting rights, of which 1,000 shares were issued to George Staley, and 500 shares each to Lawrence A. Hauft, Lena P. Hauft, Walter S. Burfoot and May D. Burfoot.

 The defendant, Engine Air Service, is also a New York Corporation, and was organized to engage in the business of overhauling airplane engines. It had an authorized capital stock of 100 shares which was held by the Haufts and the Burfoots in equal amounts of 25 shares each.

 Until the start of the series of events in 1949 which culminated in this lawsuit, Engine Air Service engaged in business at 199 East 2d Street, Mineola, New York, where it owned real estate and a substantial amount of machinery, tools, trucks, supplies and office equipment.

 Part of the premises at the above address was used by the now bankrupt Carburetor Corporation in the conduct of its business. It used the northwesterly 3,000 square feet of the plant in which it installed its own machinery and equipment.

 Prior to April 1949 it is clear that although some of the individuals involved were stockholders, officers and directors of both corporations, each corporation operated as a separate and distinct entity with its own employees, bank accounts, machinery, equipment, inventory, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.