Evening journal., 1921-07-22
RECEIVER HERE
FOR Pa ]. CO.
Judge Morris Rules That
Local Court Appoint
ments Stand
SAYS STATE HAS
SOME CONTROL


without control over the internal
affairs Of a corporation not char
tered in that State" remarked Judge
Morris. OF the United States District
Court, here, yesterday afternoon.
The court held that the Pusey and
Jones Company. shipbuilders. are for
the time being insolvent, and con-
tinued for the pendency of the liti-
cation over the company's affairs the
temporary receivers Willard Sauls-
bury and Charles b. Evans, who
we're named by the local court in
June.
In his opinion Judge Morris
states that conceding the Emer-
gency Fleet Corporation. on which
the Pusey and Jones Company has
claims aggregating s14,O00.00O, has
long been the financial mainstay OF
the company, there is no indication
OF any immediate relief from the
Fleet Corporation and therefore re-
ceivers are necessary TO protect
all persons concerned in the litga-
tion because OF the existing method
OF managing the affairs OF the COM
pany, which, although devised un-
der the agreement later approved
by the United States District Court
OF the Southern District OF New
York, is held TO be contrary to the
Delaware laws.
In the New York Court last Tues
day, Judge Manton appointed Henry |
A Wise receiver in bankruptcy for |
the company.
The receivers appointed by Judge |
Morris were at the instance Of Hans
Karluf Hansen, Of Norway. who al
legged in his complaint against the
Pusey & Jones Company that II was |
not a corporation for public i'm
provement and that IL was insolvent |
and unable to pay its obligations as
they became due. In his motion for |
the appointment OF receivers he
cited the case Of the Baltimore Dry
Dock and Shipbuilding Company.
which had secured a judgment OF
sSOO,125 and which was unpaid
through Illegal collusion.
In December, 1919. Christoffer
Hannevig. then president OF the
Pusey & Jones Company. was in
debted 70 nine Norwegian individ-
uals and corporations to the extent
Of and exceeding $1.25O.OO AS the
Hansen came TO this country and
in February, 1920. nine promissory
notes and shares Of stock aggregate
ing $3.50, 900. made by the Pusey &
Jones Company, eight payable to
Christoher Hannevig, Inc, and one
70 the order Of Hannevig. were de-
livered TO Hansen. Some were pay
able in four months and others three
months after date. All were in
dorsed by their respective payees.
Later Hennevig became indebted
to the defendant by reason Of mat
ters not connected with the notes
In an amount exceeding the aggre-
gate OF the notes7 In September.
1917, he entered into an agreement
with the q. S. Shipping Board Emer-
gency Fleet Corporation that he
would extend the notes until the
completion Of the last Of eight ships
requisitioned by the Shipping Board
OF August 3, 1917.
Pursuant to that agreement a
memorandum was made on the
back of each note as follows: Tx
tended according to letter dated
September IS. 1917. to u. S. Shipping
Board Emergency Fleet Corpora
ton" The ships were all complet-
ed before August 1, 1919. The claim
against the defendant evidenced by
the notes has not been reduced TO
judgment
Under these facts the defendant
makes four contentious; First, that
by the agreement OF September IS.
1917, the negotability OF the notes
was destroyed.
Second: the notes having been de-
livered TO the complainant after
their maturity, they were received by
him subject 10 all equities against
Hannevig, and Hannevig being in
debted to the defendant in a sum
in excess Of the amount of the
notes, nothing is due thereupon; third.
that the notes having been deliv-
cred to the complainant as the rep
resentative Of the Norwegian cred
itors OF Hannevig the complainant
has no title to the notes and is
not creditor OF the defendant cor
poration; and lastly, that even IL
the complainant is a creditor he is
only a general creditor and a suit
OF this character may be maintain
ed in this court only by judgment
creditor.
The Court continued:
1T appearing that the complain
ant will probably bc able to estab-
lish at final hearing that he is a
creditor of the respondent company,
and that that company is insolvent
In that it is unable to pay its obli-
cations as they mature in the ordi-
nary and usual course of trade and
business, should an order be now
made continuing the receivers dur
ing the pendency Of this cause?
Serious injury TO the complainant
is an important element in deciding
whether the relief should be granted.
The remedy Is, OF course,
provisional and not decisive of the
ultimate rights nor conclusive of the
merits. With a prima facie case
made by the complainant and prob
able cause fOf sustaining the bill, the
preliminary relief should be granted
without going into the merits"
Concluding his opinion, Judge
Morris says: I'm view OF the fnan-
cial condition OF the company and
the foregoing facts I deem the con-
tinuance Of the receivers during the
pendency OF this cause essential for
the protection Of the interests Of the
complainant and others in like posi-
ton"