Crane v. Tannenbaum
John F. CRANE, Trustee in Bankruptcy of Eugene Parfumes Extraordinaire, Inc., Bankrupt v. Paul H. TANNENBAUM and Max Goldweber, co-partners doing business under the name and style of Tannenbaum & Weber, and Eugene Dunn
- Proceeding
- district
- Area
- probate
- Panel
- Levet (author)
Analysis
The court considered a motion to dismiss or quash service in a bankruptcy trustee's action to recover fraudulent payments. The court denied the motion but transferred the case to the Eastern District of New York due to improper venue.
| What the court decided | The model |
|---|---|
Motion to dismiss or quash service denied“Defendant Goldweber’s motion is denied in all other respects.” | agree with court The court correctly identified that while diversity jurisdiction was lacking, the court possessed subject matter jurisdiction under Section 70(e) of the Bankruptcy Act. Therefore, the motion to dismiss for lack of jurisdiction was properly denied, as the defect was one of venue, not jurisdiction. |
Case transferred to the Eastern District of New York“Therefore, the-suit is hereby transferred to said district in accordance with Title 28 U.S.C.A. § 1406(a).” | agree with court The court correctly applied the general venue statute (28 U.S.C. § 1391) to a non-local action seeking a money judgment for fraudulent payments. Since all defendants resided in the Eastern District of New York, that was the proper venue. The transfer under 28 U.S.C. § 1406(a) was the appropriate procedural mechanism to cure the venue defect. |
The order itself: sound — The order correctly distinguishes between subject matter jurisdiction and venue. It accurately applies the rule that a trustee's citizenship does not confer diversity jurisdiction in this context and correctly identifies that a suit for a simple money judgment for fraudulent payments is governed by general venue rules, requiring suit in the defendant's district. The transfer is procedurally correct.
Opinion — Levet
LEVET, District Judge.
This is an action by a trustee in bankruptcy to recover $3,802.74 allegedly paid by the bankrupt to the defendants in violation of Section 70, sub. e of the Bankruptcy Act, 11 U.S.C.A. § 110, sub. e, and Section 15 of the New York Stock Corporation Law, McK.Consol.Laws, c. 59. Defendant Goldweber moves for an order dismissing the action or to quash the return of the service of the summons on jurisdictional grounds.
Since the bankrupt was a New York corporation and the defendants are citizens of New York, diversity of citizenship is lacking despite the fact that the trustee is a citizen of New Jersey. Stiefel v. 14th Street & Broadway Realty Corporation, 2 Cir., 1931, 48 F.2d 1041. Consequently, jurisdiction must be predicated solely upon Section 70, sub. e of the Bankruptcy Act. Although this court has jurisdiction to entertain the action, there remains for consideration the question of venue. “Where * * * the action is not local, as where the trustee seeks a simple money judgment * * * for payments of money made in fraud of creditors, the general venue, section 1391, requiring suit to be brought, in the defendant’s district would seem to-be clearly applicable.” 4 Collier on Bankruptcy, 14 Ed., p. 478.
In the instant case, it appears that all', of the defendants reside in the Eastern District of New York. Therefore, the-suit is hereby transferred to said district in accordance with Title 28 U.S.C.A. § 1406(a).
Defendant Goldweber’s motion is denied in all other respects.
So ordered.