Phillip J. McNellis as Trustee of Donald S. Potter, Bankrupt v. First Federal Savings and Loan Association of Rochester, New York,defendant-Appellee

FEINBERG, Circuit Judge:

Appellants, two trustees in bankruptcy, appeal from an order of the District Court for the Northern District of New York, which granted appellee’s motion for summary judgment and dismissed the complaint. In a memorandum opinion, Judge Brennan held that the principles of res judicata compelled this result. For reasons set forth below, we reverse.

In November 1963, appellants sued defendant-appellee First Federal Savings and Loan Association of Rochester (“First Federal”) in the New York Supreme Court, Onondaga County, in a two-count complaint. The first count alleged…