Freed v. Central Trust Co. of Illinois

• Decision Date: 14 April 1914
• Docket Number: 1969.
• Parties: FREED v. CENTRAL TRUST CO. OF ILLINOIS. In re STANDARD FURNITURE DISTRIBUTING CO.
• Court: U.S. Court of Appeals — Seventh Circuit

215 F. 873

FREED v. CENTRAL TRUST CO. OF ILLINOIS.

In re STANDARD FURNITURE DISTRIBUTING CO.

No. 1969.

United States Court of Appeals, Seventh Circuit.

April 14, 1914

Bernard J. Brown, of Chicago, Ill., for plaintiff in error.

Harold F. White, of Chicago, Ill., for defendant in error.

Before BAKER, KOHLSAAT, and MACK, Circuit Judges.

MACK Circuit Judge.

This is a proceeding to review an order of the District Court entered November 29, 1912, adjudging Isadore B. Freed guilty of contempt in refusing willfully and contumaciously to obey an order entered October 24, 1912, directing said Freed, as president of the Standard Furniture Distributing Company, a bankrupt, to turn over $1,100 to the Central Trust Company as receiver of the bankrupt, and committing him to jail 'until he deliver to the receiver * * * the sum of $1,100 or until the further order of this court or until otherwise released by law.'

Both orders were entitled and entered in the bankruptcy proceedings, the first on a petition of a creditor, rule on and due notice to Freed, and default for want of an answer thereto, the second on petition of the receiver, rule to show cause, answer thereto by Freed, and, as the order recites testimony offered on behalf of the receiver and of Freed.

A writ of error, in which the United States was named as defendant in error, was sued out of this court on the day of the entry of the commitment order. Afterwards the Central Trust Company, as receiver, was made a defendant in error, and later the United States was dismissed as a party.

No time had been fixed by the District Court for filing a bill of exceptions or certificate of the evidence. Over the objection of the receiver that the court was then without jurisdiction there was filed on April 22, 1913, by leave of the District Court, a so-called bill of exceptions, dated April 22, 1913 certified by the District Judge as containing 'all of the evidence offered and received on the hearing of said matter.'

Motions to dismiss the writ of error and to strike this bill of exceptions from the record were reserved to the final hearing. At that time leave was granted to file a petition to review and revise without prejudice to defendant in error's right, however, to object thereto.

1. Counsel for plaintiff in error now properly concede that, as the proceedings culminating in the order of November 29th and the commitment pursuant thereto are clearly for civil and not for criminal contempt (Clay v. Waters, 178 F. 385, 389, 390, 101 C.C.A. 645, 21 Ann.Cas. 897), they cannot be reviewed by writ of error either under the Circuit Court of Appeals Act or by appeal under section 24a of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 553 (U.S. Comp. St. 1901, p. 3431)). On the other hand, counsel for defendant in error admit that, as the orders were made in the course of bankruptcy proceedings for the purpose of enforcing the rights of the receiver in and to property held to belong to the bankrupt's estate, a petition to revise and review, if filed in due time, would have enabled this court, under section 24b of the Bankruptcy Act, to review the order entered by the bankruptcy court under its 'jurisdiction in equity' in a 'proceeding in bankruptcy.' In re Cole, 163 F. 180, 90 C.C.A. 50, 23 L.R.A. (N.S.) 255; Mueller v. Nugent, 184 U.S. 1, 22 Sup.Ct. 269, 46 L.Ed. 405.

While for reasons stated in Re Friend, 134 F. 778, 67 C.C.A. 500 (see, too, Matter of Loving, 224 U.S. 183, 32 Sup.Ct. 446, 56 L.Ed. 725), we held that a petition to revise could not be dealt with as an appeal, the converse of this proposition, that an appeal cannot be dealt with as a petition to revise, while maintained by some Circuit Courts of Appeals (Brady v. Bernard, 170 F. 576, 95 C.C.A. 656), has been denied by others (Re Abraham, 93 F. 767, 35 C.C.A. 592; Chesapeake Shoe Co. v. Seldner, 122 F. 593, 58 C.C.A. 261).

The Supreme Court in Bryan v. Bernheimer, 181 U.S. 188, 21 Sup.Ct. 557, 45 L.Ed. 814 (the Abrahams case on certiorari), and in Holden v. Stratton, 191 U.S. 115, 119, 24 Sup.Ct. 45, 48 L.Ed. 116, by express reference to the effect of the Bernheimer Case, impliedly approved of the principle adopted in the Abrahams Case, and, in Duryea Power Co. v. Sternbergh, 218 U.S. 299, 31 Sup.Ct. 25, 54 L.Ed. 1047, while affirming the principle of the Friend Case, expressly distinguished but in no way limited or overruled the principle of these other cases. Bank v. Trust Co., 198 U.S. 280, 25 Sup.Ct. 693, 49 L.Ed. 1051, holds that as the Court of Appeals on petition could revise only in matters of law, it is, of course, powerless to review and to reverse the District Court in matters of fact, in a case presented on appeal instead of by petition.

If then, an appeal which, as applied to bankruptcy proceedings aims to correct errors both of law and of fact arising on the equity side of the bankruptcy court (Bankruptcy Act, Sec. 25a), may be treated as a petition to revise which aims to correct only errors of law so arising (section 24b), a writ of error which aims to correct only errors of law arising on the common-law or criminal-law side of the court may, in our judgment, be similarly dealt with. While the writ and the petition differ in form, in substance they are similar; both begin new proceedings in this court to accomplish substantially the same end. Especially in contempt cases incident to bankruptcy proceedings should a liberal practice in this respect be adopted, in view of the uncertainty that so long prevailed in distinguishing between cases of civil contempt, properly reviewable in bankruptcy proceedings by petition to revise, and criminal...