Gluck v. Camden Fire Ins. Ass'n, 204 F.2d 183, 2d Cir. (1953)

204 F.
2d 183
GLUCK,
v.
CAMDEN FIRE INS. ASS'N et al.
No. 257, Docket 22674.
United States Court of Appeals Second Circuit.

Argued April 9, 1953.
Decided May 11, 1953.
Nathan Weidenbaum, New York City (Isidore Krein, New York City, on
the brief), for appellants.
Sidney S. Korzenik, New York City, for appellee.
Before SWAN, Chief Judge, and CHASE and CLARK, Circuit Judges.
CLARK, Circuit Judge.
While the addition to this litigation of various parties representing conflicting

interests gives an appearance of complexity, the underlying question before us
is relatively narrow and simple. It is whether or not a court order requiring the
holding of a fund intact excludes, under the circumstances here, the possibility
of state court attachments obtained in other litigation by one of the parties
before the district court. A part of the relief sought alternatively is that the
attaching party and his counsel be adjudged in contempt of court. We have
jurisdiction at this time because the order refused an injunction against the
proceedings in the state court and, in fact, dissolved a stay to that effect
contained in the show-cause order granted on the motion. 28 U.S.C. 1292.
The original action was by Eugene Gluck as plaintiff against The Camden Fire
Insurance Association as defendant, seeking recovery on the latter's policy of
theft insurance for two motor trucks alleged to have been stolen by one Sam
Wiederhorn. It was instituted in the Supreme Court of New York on September
24, 1951. Defendant removed it to the district court and then brought in as
third=party defendants Wiederhorn himself, the two moving parties here, Al's
Tire Shop, Inc., and its president, Alfred Unger, who, as used car dealers, had
acquired possession of the trucks and sold them, and finally the two purchasers
of the trucks (who have no present significance here). The trucks were acquired
and sold by the moving defendants in 1948 and 1949 and were claimed by
plaintiff in 1950. During the course of settlement negotiations in 1950,
Wiederhorn deposited $3,000 in escrow with Rein, Mound & Cotton, attorneys
for defendant insurance company. But since plaintiff's claim for the two trucks
was $15,000, defendant brought in the various third-party defendants against
the contingency that it might ultimately be forced to pay. The escrow
agreement had been extended to June 1, 1952, but at that time would expire. So
these impleaded defendants, Al's Tire Shop and Unger, on May 27, 1952,
procured from Judge Conger an order to show cause why they should not have
a warrant of attachment upon the escrow deposit to secure their contingent
claim against Wiederhorn. This order contains the stay upon which the present
proceedings depend.
3
This part of the order called for service upon Wiederhorn through his attorney,
and upon Rein, Mound & Cotton, attorneys for the defendant insurance
company, and provided that until further order of the court the escrow deposit
should be held intact. It is quoted in full in the note.1 The motion for the
attachment was adjourned so that it was not passed upon until July 9, 1952; and
the order was not entered until August 13, 1952. Meanwhile plaintiff, suing
Wiederhorn in the New York Supreme Court on another and distinct claim,
procured a warrant of attachment against the fund; and before the August 13
order was entered, another action by plaintiff's nominee on yet another claim,
together with this claim, had gone to judgment in the state court. These
judgments have called forth subpoenas in supplementary proceedings, and
further action appears imminent. In his decision of July 9, 1952, Judge
Edelstein granted the attachment to the two moving parties here, but
notwithstanding protests as to the state court attachment then extant, refused to
declare it invalid, saying it was not in issue and in his later order providing that
nothing therein should be construed to impair such validity or priority as the
state court attachment 'may presently have' against the attachment he was
ordering.2 Later the parties agreed on a payment from the fund to Wiederhorn's
counsel for services, so that it now stands at $2,500.
The present proceeding is upon a motion that Messrs. Rein, Mount & Cotton
turn over the fund to the United States marshal subject only to the movants'
attachment and free of all state attachments or alternatively that plaintiff cancel
all state proceedings against the fund or further that he and his counsel be held
in contempt of court. On this Judge Irving R. Kaufman on November 20, 1952,
granted an order to show cause, together with a temporary stay against interim
action in the state proceedings. Thereafter Judge Sugarman made the order
appealed from, denying the motion in its affirmative demands (although

allowing deposit of the fund in court for the convenience of the parties). In a
short memorandum he said: 'The priority of liens and the propriety of
attachments and orders supplementary to judgment were all before Judge
Edelstein. His order, indicating that third-party defendants' (Al's Tire Shop, Inc.
and Unger) attachment was to be subordinate to plaintiff'; and Suss' established
the law of the case.' (Suss was plaintiff's nominee in the second state action.)
The judge added that one district judge was bound to follow another judge's
rulings in the same case involving the same issues.
5
It would seem probably that Judge Sugarman has interpreted Judge Edelstein's
rulings somewhat more broadly than the latter intended, and there was no intent
to pass finally upon the validity of the state attachments. Nevertheless the
essential point that they did not violate orders of the district court is made clear.
And in any event we are not bound by any prior ruling of a district judge as the
'law of the case,' as plaintiff claims. United States v. Wissahickon Tool Works,
2 Cir., 200 F.2d 936, 940; Frost v. Bankers Commercial Corp., 2 Cir., 194 F.2d
505, 508. Nevertheless we agree with Judge Edelstein's interpretation of the
prior order.
This brings us to the meaning of Judge Conger's order that the escrow fund
must be held intact. Appellants and their counsel argue vehemently that
plaintiff has been guilty of sharp practices in getting ahead of them, so to speak;
but the district judges have not thought so, nor do we. Appellants, we fear, are
incensed because they did not thoroughly foresee what might happen; as is not
unusual, hindsight provides them with answers they did not have before. For
we think that the possible ambiguity in the order is explained by their own
actions. As they point out, they drew the order, chose the language, and
presented it to the judge for approval. Semantically it is hardly adequate for
their present intent; the fund itself is obviously intact and in the hands of the
escrowees, whatever series of notices any courts may have served upon the
latter. Thus successive orders of attachment on the same property are not
unusual; while issues of priority may arise, none of validity are presented by
this simple fact. Heilbronn v. Herzog, 17 App.Div, 416, 45 N.Y.S. 268; AngleContinentale Trust Maatschappij (Angle-Continental Trust Co.) v. Alligemeine
Elektricitaets-Gesellschaft (General Electric Co., Germany), 171 Misc. 714, 13
N.Y.S. 2d 397; Bates v. Days, C.C.W.D. Mo., 17 F. 167; Gumbel v. Pitkin, 124
U.S. 131, 151-157, 8 S.Ct. 379, 31 L.Ed. 374. When it is recalled that the
immediate objective on this 27th day of May was to prevent the return of the
fund to its original owner on June 1, it can be seen that the words used were apt
for their particular purpose. That this is what the framers had in mind is then
demonstrated by the notice for which they provided; they arranged for notice of
the forthcoming hearing to the owner and the holders, but with no notice to the
plaintiff. He was left substantially in the situation of an outside third party. And
it would hardly be claimed that some other creditor of Wiederhorn, not here
involved, could not sue the latter and attach the fund.
7
Keeping in mind the natural construction of a writing against the writers- if

they wanted this action prohibited, they could so easily have said so explicitlyand considering, as we have held, that a person ought not to be adjudged in
contempt of court upon the implications of an order whose provisions are not
clear, see Berry v. Midtown Service Corp., 2 Cir., 104 F.2d 107, 122 A.L.R.
1341, certiorari dismissed 308 U.S. 629, 60 S.Ct. 297, 84 L.Ed. 525, we think
the result reached below correct. This keeps the fund out of the hands of the
debtor, but does not attempt to freeze it for the benefit of any one creditor- and
a contingent one at that. Plaintiff attempts to go further and say that under
Toucey v. New York Life Ins. Co., 314 U.S. 118, 62 S.Ct. 139, 86 L.Ed. 100,
137 A.L.R. 967, no injunction may issue against state proceedings. But the
statute, amended in 1948 to lessen somewhat the effect of the Toucey doctrine,
does permit such an injunction by a district court 'in aid of its jurisdiction,' 28
U.S.C. 2283; see Reviser's Note to this section. The applicability of this
provision depends somewhat on the answer to the main question. If the district
court had intended to take exclusive possession of the fund, then it could well
have power to stop outside interference from whatever source. This does not
therefore furnish a complete answer. But it does have some bearing. Federal
judges are now taught by experience to respect state processes in ways
unknown to earlier federal generations. Had Judge Conger intended an order
which might have suggested a possible clash, it is hardly to be expected that he
would have acted thus without seeming prededitation and merely on the basis
of a document presented to him by movants' counsel.
In short we see little to justify the construction of the order claimed by

appellants and much in favor of that made below. Our affirmance, like Judge
Edelstein's original ruling below, should not be taken as a test of the ultimate
validity of the state attachments, an issue which has not been before the court
below. It is merely a holding that they do not violate Judge Conger's stay.
Order affirmed.
'Sufficient reason appearing therefor,

'Let, service of a copy of this order, together with the affidavit annexed thereto,
be made upon the defendant, Sam Wiederhorn, by service thereof upon George
J. Hart, Esq., his attorney, and upon Rein, Mound & Cotton, Esqs., attorneys for
defendant and third-party plaintiff, The Camden Fire Insurance Association, be
made on or before the 28th day of May, 1952, at 11:00 A.M. o'clock, which
service so made shall be deemed sufficient, and in the meantime, and until the
further order of this Court, said escrow deposit in the hands of Rein, Mound &
Cotton, Esqs., shall be held intact.'
2
'Ordered, that nothing herein shall be construed to impair such validity or

priority as the warrant of attachment which issued out of the Supreme Court of
New York on the application of Eugene Gluck in his separate cause of action
against Sam Wiederhorn may presently have as against the warrant of
attachment to follow hereunder; and that any and all rights of all parties herein
and of Eugene Gluck as an independent suitor in the New York Supreme Court
are reserved to them with respect to any and all issued as may hereafter be
raised in any contest elsewhere between the two attachments referred to herein.'

Gluck v. Camden Fire Ins. Ass'n, 204 F.2d 183, 2d Cir. (1953)

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204 F.

United States Court of Appeals Second Circuit.

While the addition to this litigation of various parties representing conflicting

appealed from, denying the motion in its affirmative demands (although

Keeping in mind the natural construction of a writing against the writers- if

In short we see little to justify the construction of the order claimed by

'Sufficient reason appearing therefor,

'Ordered, that nothing herein shall be construed to impair such validity or

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