Roth v. Gotthold — 90 Misc. 363

Majority

p. 363

Joseph Roth and Julius Hammel, Appellants, v. Arthur F. Gotthold, Respondent.

(Supreme Court, Appellate Term, First Department,

May, 1915.)

Headnote

Pleading — in action to recover for supplies sold to trustee — bankruptcy — answer — demurrer.

Where an order of the bankruptcy court authorizes the raising of money on receiver’s certificates “ for the use of the trustee in the continuance and operation of the business of the said bankrupt,” a decision overruling a demurrer to the complaint in an action to recover for supplies sold to the trustee and used in continuation of the bankrupt’s business to the effect that the trustee’s authority to continue the business was dependent on

p. 364

raising the money for that purpose by means of receiver’s certificates is the law of the case.

Where the answer interposed after the demurrer had been overruled alleged that plaintiffs were creditors of the bankrupt

' and joined in authorizing the trustee to continue the business on credit, but of which there was no proof, a dismissal of the complaint was in disregard of the law of the case as settled on demurrer. -

Appeal by plaintiffs from a judgment of the Municipal Court of the city of New York, borough of Manhattan, ninth district, in favor of defendant, after a trial by a judge without a jury.

Goldman, Heidenheimer & Unger (M. L. Heidenheimer, of counsel), for appellants.

Yankauer & Davidson (Maurice P. Davidson and Myle J. Holley, of counsel), for respondent.

This action is brought to recover supplies sold to a trustee in bankruptcy and used in the continuation of the- business of a bankrupt. To the complaint, defendant had interposed a demurrer, which was overruled and a formal order entered thereon, the judge who rendered the decision writing an opinion.

It appears that the trustee had been authorized by the federal court to continue the business; also to raise money on receiver’s certificates “ for the use of the trustee in the continuance and operation of the business of the said bankrupt. ’ ’ The judge who overruled the demurrer was of opinion—in which I agree with him—that the decision in Matter of Erie Lumber Co., 150 Fed. Rep. 817 , was decisive of the interpretation of this order, to the effect that the authority of the trustee to continue the business was dependent on raising the money for that purpose by means of

p. 365

receiver’s certificates. At all events, the decision overruling the demurrer is the law of this case.

Defendant thereafter interposed an answer which, so far as meeting the decision on the demurrer goes, sets out substantially that plaintiffs were creditors of the bankrupt and themselves joined in authorizing the defendant-trustee to continue the business on credit. Of this there was no proof. The judgment dismissing the complaint, therefore, was in plain disregard of the law of the case as settled on demurrer, and the judgment must, therefore, be reversed and new trial granted, with costs to appellant to abide the .event.

Guy and Pendleton, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.