Opinion
No. 255.
March 2, 1925.
Appeal from the District Court of the United States for the Southern District of New York.
Appeal from order in equity entered in the District Court for the Southern District of New York.
See, also, 296 F. 516.
Nathan Burkan, of New York City (Isadore Shapiro, of New York City, of counsel), for appellant.
F. Wright Moxley, of New York City, for appellee.
Before HOUGH, MANTON, and HAND, Circuit Judges.
The order appealed from is a plain violation of section 265 of the Judicial Code (Comp. St. § 1242), in that it contains an injunction staying proceedings in a state court in a matter which has no relation to bankruptcy and which does not interfere in any way with the custody, care, and distribution of the property in the hands of the court below under and by virtue of the bill. It is therefore directed that the order be reversed, with costs. A direction will, however, be included in our mandate, and in the order to be entered thereupon, that should any judgment be entered in said action in the state court, such judgment shall not be taken to be a liquidation of any claim filed or capable of being filed under the judgment creditors' bill herein, or as in any way affecting the right of the receiver to contest the claim so reduced to judgment de novo. Nothing, however, in our mandate shall be taken to prevent the court below permitting liquidation of Margolies' claim by suit in the state court, should it prefer so to do.