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  • In The Matter of Ignatius A. MONFORTE, Bankrupt-Appellant. Chemical Bank New York Trust Company, Objecting Creditor-Appellee

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    The document is a court case from the United States Court of Appeals for the Second Circuit regarding the denial of a discharge in bankruptcy. The bankrupt, Ignatius Monforte, had transferred a $32,000 check fraudulently to avoid paying a creditor. A state court previously found the transfer was made with intent to defraud the creditor and entered a judgment. In the bankruptcy proceedings, the referee relied on the state court judgment and refused to allow Monforte to relitigate the issue. The district court and appeals court affirmed, finding the state court judgment had preclusive effect under principles of res judicata.

    Original Description:

    Filed: 1961-12-06 Precedential Status: Precedential Citations: 296 F.2d 233 Docket: 26959_1

    Original Title

    In the Matter of Ignatius A. Monforte, Bankrupt-Appellant. Chemical Bank New York Trust Company, Objecting Creditor-Appellee, 296 F.2d 233, 2d Cir. (1961)

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    The document is a court case from the United States Court of Appeals for the Second Circuit regarding the denial of a discharge in bankruptcy. The bankrupt, Ignatius Monforte, had transferred a $32,000 check fraudulently to avoid paying a creditor. A state court previously found the transfer was made with intent to defraud the creditor and entered a judgment. In the bankruptcy proceedings, the referee relied on the state court judgment and refused to allow Monforte to relitigate the issue. The district court and appeals court affirmed, finding the state court judgment had preclusive effect under principles of res judicata.

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    Public Domain
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    18 views3 pages

    In The Matter of Ignatius A. MONFORTE, Bankrupt-Appellant. Chemical Bank New York Trust Company, Objecting Creditor-Appellee

    Uploaded by

    Scribd Government Docs
    The document is a court case from the United States Court of Appeals for the Second Circuit regarding the denial of a discharge in bankruptcy. The bankrupt, Ignatius Monforte, had transferred a $32,000 check fraudulently to avoid paying a creditor. A state court previously found the transfer was made with intent to defraud the creditor and entered a judgment. In the bankruptcy proceedings, the referee relied on the state court judgment and refused to allow Monforte to relitigate the issue. The district court and appeals court affirmed, finding the state court judgment had preclusive effect under principles of res judicata.

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    of 3

    296 F.

    2d 233

    In the Matter of Ignatius A. MONFORTE, BankruptAppellant.


    Chemical Bank New York Trust Company, Objecting
    Creditor-Appellee.
    No. 71, Docket 26959.

    United States Court of Appeals Second Circuit.


    Argued Nov. 8, 1961.
    Decided Dec. 6, 1961.

    Ignatius A. Monforte, New York City, bankrupt-appellant pro se.


    Sherwin A. Rodin, New York City (Barney B. Fensterstock and Zalkin &
    Cohen, New York City, on the brief), for objecting creditor-appellee.
    Before LUMBARD, Chief Judge, MEDINA and WATERMAN, Circuit
    Judges.

    MEDINA, Circuit Judge. Ignatius A. Monforte filed a voluntary petition in


    bankruptcy on March 26, 1959 and on the same day he was adjudicated a
    bankrupt. There was then pending in the New York Supreme Court, New York
    County, an action, entitled 'Francis R. Doherty, as Receiver of the property of
    Ignatius A. Monforte, and Chemical Corn Exchange Bank, plaintiffs, against,
    Ignatius A. Monforte, Hearthstone Agency, Inc. and Royal State Bank of New
    York, defendants.' Part of the relief prayed in said action was a judgment
    setting aside a transfer by the bankrupt to Hearthstone Agency, Inc. of a check
    in the sum of $32,000 drawn by Harlem Savings Bank to the order of the
    bankrupt, as fraudulent as against his creditor, Chemical Corn Exchange Bank.
    All the parties appeared in this action, the case was litigated on the merits, and
    the opinion of Justice Henry Clay Greenberg, who presided over the trial, was
    filed on March 24, 1959. The formal judgment was entered in the office of the
    County Clerk on April 7, 1959. While the opinion as filed did not state in so
    many words specifically that the bankrupt had transferred the check to defraud
    the bank, the judgment as entered contained an adjudication to this effect, in the
    following words: 'the transfer * * * is hereby set aside as having been made by
    the defendant, Ignatius A. Monforte with actual intent to hinder, delay or

    defraud plaintiff Chemical Corn Exchange Bank as his creditor * * *.' As this
    transfer had been made on June 18, 1958, subsequent to the first day of the
    twelve months immediately preceding the filing of the petition in bankruptcy
    (See Bankruptcy Act, Sec. 14, sub. c(4), 11 U.S.C.A. 32, sub. c. (4)), it was
    included in the specifications of objections to the bankrupt's discharge.
    2

    When the matter came on for hearing before Referee Arthur J. Doran, it was
    stipulated that the hearing would be limited to this particular specification, the
    others to be held in abeyance, to be considered only in the event that a decision
    favorable to the bankrupt be made on the specification thus brought on for
    disposition.

    The judgment roll in the New York Supreme Court action was received in
    evidence and relied upon to prove the allegations of fraudulent transfer as res
    judicata. Objection was made 'unless the minutes of the trial are included
    because it would be an unfair inference against the bankrupt unless all of the
    facts to substantiate the judgment are clearly shown to the Court.' The bankrupt
    also requested an opportunity to call witnesses, quite evidently for the purpose
    of retrying the issue already determined in the state court. No specific element
    of unfairness was alluded to, nor was any representation or offer of proof made
    to impeach the validity of the judgment already rendered, or to attack the
    competency of the New York Supreme Court to render the judgment, on
    jurisdictional or other grounds. Moreover, no appeal had been taken from the
    judgment, and the time to appeal had long since expired.

    The Referee sustained the specification of objection to discharge, relying upon


    the judgment roll in the state court action, he refused to permit the bankrupt to
    relitigate the matter, the bankrupt's petition to the District Court for review of
    the decision thus made was denied, and the bankrupt now appeals to us.

    As the bankrupt prosecutes the appeal pro se and made the oral argument
    before us, we can readily understand how so many irrelevant matters are urged
    upon us as a basis for reversal. Nevertheless, in our scrutiny of the entire record
    we have had in mind each of these miscellaneous confused and complex side
    issues in order to satisfy courselves that appellant has suffered no injustice. The
    fact remains that the only substantial issue in the case is whether or not it was
    proper to rely upon the judgment roll in the Supreme Court action and to refuse
    to require the production of the transcript of the state trial and to refuse to
    permit the bankrupt to call witnesses and relitigate the issue of the fraudulent
    transfer.

    Preliminarily, it is clear that there is no significance in the fact that the formal

    Preliminarily, it is clear that there is no significance in the fact that the formal
    entry of judgment in the state court action was a few days after the filing of the
    voluntary petition in bankruptcy and the adjudication. Moreover, as there was
    no stay of proceedings, there was nothing to prevent the bankrupt from taking
    an appeal from the judgment, had he chosen to do so.

    That the principles of res judicata are applicable to such a proceeding as the one
    before us has been repeatedly held. Sawyer v. Orlov, 1 Cir., 1926, 15 F.2d 952,
    cert. denied, 1927, 274 U.S. 736, 47 S.Ct. 574, 71 L.Ed. 1316; Stalcup v.
    Jepson, 8 cir., 1923, 289 F. 479; In re Gophrener, E.D.N.Y., 1937, 20 F.Supp.
    922; In re Ruthkowski, S.D.Minn., 1930, 39 F.2d 969; In re Krall, D.Conn.,
    1912, 196 F. 402; In re Skinner, N.D.Iowa, 1899, 97 F. 190.

    We find it not necessary to discuss the other points argued by the bankrupt as
    we find no merit in any of them.

    Affirmed.

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