Ginsberg Sons v. Popkin
| Decision Date | 14 March 1932 |
| Docket Number | No. 429,429 |
| Citation | 285 U.S. 204,52 S.Ct. 322,76 L.Ed. 704 |
| Parties | D. GINSBERG & SONS, Inc., v. POPKIN |
| Court | U.S. Supreme Court |
Messrs. Leo J. Linder, of New York City, and Raymond J. Mawhinney, of Washington, D. C., for petitioner.
Mr. Louis Jersawit, of New York City, for respondent.
The District Court in the Eastern District of New York adjudged the Foster Construction Corporation a bankrupt and in June, 1930, a trustee was appointed. Respondent was president, and petitioner was a creditor of the corporation. December 4, 1930, petitioner presented to one of the judges in the Southern district of New York a petition, the brief substance of which follows:
In 1929, about the time the petition in bankruptcy was filed, respondent withdrew, and has failed to account for, a large amount of cash belonging to the corporation. He fled to Canada in order to avoid examination and did not return until January, 1930. About that time the court in the Eastern district issued an order of ne exeat against him but he fled again and later returned to the borough of Manhattan where he was then concealing himself with the intention of immediately leaving the United States to avoid examination. The petition stated that respondent's testimony would be in aid of creditors, and that, had he been requested so to do, the trustee would have refused to apply for his arrest, and that therefore the petitioner made the application for an ancillary order of examination and arrest in aid of itself and other creditors. It was shown that a judge in the Eastern district authorized petitioner to apply for this order in the Southern district.
On these representations the judge made an order of examination and arrest. And on the same day he signed another order, under the caption 'Writ Ne Exeat,' commanding the marshal to apprehend respondent, take him into custody and bring him before the judge for examination, 'or, at his option, cause him to give sufficient bail or security in the sum of $10,000 * * * that he the said Joseph Popkin will not depart from or go * * * beyond the territorial jurisdiction of this court without its leave, and will at all times and in all manner, respect and things, obey and comply with the lawful orders and decrees of the court herein for his examination, in default of which he is to be lodged in New York County Jail. * * *' In obedience to that command the marshal arrested respondent. He gave the prescribed bail and the clerk released him from custody. Then respondent applied to a judge in the Southern district to have the order vacated on the ground that it was made without jurisdiction. The motion was denied. 47 F.(2d) 276. The Circuit Court of Appeals reversed. 50 F.(2d) 693.
The petitioner contends that clause (15) of section 2 of the Bankruptcy Act, 11 USCA § 11(15), empowers district judges in bankruptcy cases upon the application of a creditor to issue orders directing the arrest of officers of bankrupt corporations.
The words of section 2 relied on are: 'The courts of bankruptcy * * * are hereby invested * * * with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings * * * to * * * (15) make such orders, issue such process, and enter such judgments in addition to those specifically provided for as may be necessary for the enforcement of the provisions of this title.'
Clause (15) is to be construed having regard to the other parts of section 2, to the provisions of the act in respect of examinations concerning the business and property of bankrupts, and to section 261 of the Judicial Code (28 USCA § 376) relating to writs of ne exeat.
Section 2 creates courts of bankruptcy and in general terms, by twenty separately numbered clauses, confers upon them authority in respect of at least as many matters relating to bankruptcies. By clause (13) bankruptcy courts are empowered by means of fine or imprisonment to enforce obedience by bankrupts and others to all lawful orders and by clause (16) to punish persons for contempts committed before referees. Section 7a(9), 11 USCA § 25(9), makes it the duty of the bankrupt, when present at the first meeting of creditors and at such other times as the court shall order, to submit to examination concerning his business, acts, and property. Section 21a, 11 USCA § 44(a), empowers the court upon the application of a creditor to require any designated person, including the bankrupt, to appear for simi- lar examination. Section 9a, 11 USCA § 27(a), exempts the bankrupt from arrest upon civil process issued from a court of bankruptcy except for contempt or disobedience of its lawful orders. And section 9b, 11 USCA § 27(b), specifically governs arrests and detention of bankrupts about to leave the district in order to avoid examination. It is as follows:
Section 261 of the Judicial Code (28 USCA § 376), provides that writs of ne exeat may be granted by any district judge in cases...
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