Opinion
No. 209.
February 11, 1938.
Appeal from the District Court of the United States for the Northern District of New York.
Proceeding in the matter of the reorganization of the Hotel Martin Company of Utica, wherein an order was entered staying the First Citizens Bank Trust Company of Utica from selling pursuant to State Lien Law, Consol.Laws, c. 33, securities owned by William M. Martin, president of the debtor, and pledged with the First Citizens Bank Trust Company as collateral. From the order, the First Citizens Bank Trust Company of Utica appeals.
Order reversed.
Miller, Hubbell Evans, of Utica, N.Y. (Arthur L. Evans, of Utica, N.Y., of counsel), for appellant.
Maurice Supiro, of Utica, N.Y., for appellee.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
The Hotel Martin Company of Utica is in reorganization proceedings, pursuant to section 77B, Bankr.Act, 11 U.S.C.A. § 207, and still under the jurisdiction of the court. Mr. Martin, its president, was appointed trustee for the debtor. Neither he nor his property became subject to the jurisdiction of the court. He borrowed moneys from the appellant and gave second mortgage bonds of the debtor as collateral. A judgment has been recovered against Mr. Martin in the New York state court, and the appellant has been restrained by the court below from selling the bonds in satisfaction of the judgment.
The court was without jurisdiction or power to grant the injunction of restraint.
The debtor relies on Continental Illinois Nat. Bank Trust Co. v. Chicago, Rock Island Pac. Ry. Co., 294 U.S. 648, 55 S. Ct. 595, 79 L.Ed. 1110, in support of the order, but there the property restrained from sale was the property of the debtor and the principle of that case is inapplicable. No sufficient reason is advanced why the sale or disposition of the appellee's bonds would in any wise interfere or affect the reorganization of the debtor as proposed.
Order reversed.