Rockmore v. Lehman

129 F.2d 892 (1942)

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Rockmore v. Lehman

United State Court of Appeals for the Second Circuit
129 F.2d 892 (1942)

Facts

Surf Advertising Corporation (Surf) and Fiegel Advertising Company (Fiegel) entered contracts with Calvert Distillers Corporation (Calvert), under which Surf and Fiegel agreed to furnish and maintain advertising signs for Calvert. Calvert agreed in the contracts to make installment payments for the signs over a period of years. Surf assigned its contract with Calvert to Joseph Abrams (defendant), and Abrams, in turn, advanced Surf money that Surf used to erect the signs. Similarly, Fiegel assigned its contract with Calvert to Mathilde Lehman (defendant), and Lehman advanced Fiegel money. The assignments provided that Surf and Fiegel would repay the advances by turning over to Abrams and Lehman the payments received from Calvert. Following the assignment to Lehman, and while Fiegel still owed Lehman $964.52 to pay back the advance, Fiegel assigned its contract with Calvert to Surf. In 1939, Surf entered reorganization under Chapter X of the Bankruptcy Act. Max Rockmore (plaintiff) was appointed bankruptcy trustee. Calvert deposited $5,960 with the court, which represented payments owed by Calvert under its original agreements with Surf and Fiegel. The court awarded $4,410 to Abrams, $964.52 to Lehman, and the remaining $585.32 to Rockmore as reimbursement for servicing the signs. Rockmore appealed the court’s distribution of the funds to Abrams and Lehman. The appellate court originally reversed the court’s distribution, holding that the assignments to Abrams and Lehman were nothing more than agreements to assign rights that might arise in the future. The court characterized those agreements as equitable liens that would have arisen if the payments were received from Calvert but which the bankruptcy trustee had the power to avoid. Abrams and Lehman filed a motion for rehearing.

Rule of Law

Issue

Holding and Reasoning (Hand, J.)

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