Glass v. United States

• Decision Date: 25 March 1916
• Docket Number: 2061.
• Citation: 231 F. 65
• Parties: GLASS v. UNITED STATES.
• Court: U.S. Court of Appeals — Third Circuit

231 F. 65

GLASS v. UNITED STATES.

No. 2061.

United States Court of Appeals, Third Circuit.

March 25, 1916

I. F Goldenhorn, of Jersey City, N.J., for plaintiff in error.

J Warren Davis, U.S. Atty., of Trenton, N.J.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

WOOLLEY Circuit Judge.

The plaintiff in error (defendant below) was tried and convicted upon an indictment charging him with 'the offense of having knowingly and fraudulently concealed while a bankrupt * * * from his trustee * * * property belonging to his estate in bankruptcy. ' Section 29b, Bankruptcy Act of 1898.

The defendant was a merchant, having a store in Passaic, another in Paterson, New Jersey, and warerooms in Brooklyn, New York. The latter were used for the storage of goods bought in New York and afterward shipped to Passaic, whence they were re-shipped (at times in original packages) to the warerooms in Brooklyn, and thence disposed of. The testimony discloses that in July or August, 1912, the defendant was in financial difficulty. He represented to his creditors that he was solvent, and that his assets were about $15,000 in excess of his liabilities. He succeeded in quieting his creditors until August 30th, when they made an examination of his merchandise and books at his Passaic and Paterson stores, and found that his previous representations were false, in that he had overstated his assets and understated his liabilities. Being confronted with his insolvency and under threat of bankruptcy proceedings, the next night he removed his books to his dwelling, and the larger portion of his goods from the Passaic store to rooms which he had recently rented in Paterson, and two days later loaded them on trucks and moved them to New York. An involuntary petition in bankruptcy was filed against him on September 6th, and in due course a trustee was appointed. Neither the merchandise nor the books of the defendant so removed, were delivered to the trustee.

The defendant claims that large sales and the payment of his debts with the proceeds, explain the removal of the goods and the disparity between assets found by the trustee and assets which he but recently had. The trial court admitted testimony touching the conduct of the defendant in removing his books and in disposing of his goods during a brief period immediately prior to the date of bankruptcy, upon the ground that such testimony had a probative bearing on their subsequent disappearance. Much of this testimony consisted of statements made by the defendant to his creditors, and acts done by him and his agents in secreting his books and in removing merchandise from place to place, before bankruptcy proceedings were instituted. The defendant complains that in admitting this testimony the court erred, because from its very nature, the offense of concealing property from a trustee can only be committed after bankruptcy proceedings have been instituted and a trustee appointed. Therefore evidence of prior conduct was irrelevant. The defendant urges this contention upon the theory that concealment within the meaning of the act must at all times be a physical act in the nature of manual conversion, begun and completed after bankruptcy, and therefore to be proved only by acts done after bankruptcy. This contention is without merit. The testimony was admitted, as stated by the court, not in proof of the completed act of concealment, but as evidence of a plan or a scheme from which inference of subsequent concealment and of fraudulent intent to conceal might reasonably be drawn. 'Conceal' is defined by the act to include 'secrete, falsify and mutilate' (section 1, clause 22), and by concealment of property, the act contemplates a continuous concealment in instances where property is physically converted and concealed before bankruptcy and remains secreted and concealed after bankruptcy. In re Cramer (D.C.) 175 F. 879; In re James, 181 F. 476, 104 C.C.A. 224. As evidence of acts committed before bankruptcy is admissible in proof of concealment then begun and thereafter completed, so evidence of acts before bankruptcy is admissible in proof of fraudulent intent with which concealment is completed after bankruptcy. Seigel v. Cartel, 164 F. 691, 90 C.C.A. 512.

The case of Gretsch v. United States, 231 F. 57 C.C.A. . . ., recently decided by this court, is distinguishable from this case upon the facts and in the point of decision. In that case, the property alleged to have been concealed had never been in the district in which the offense was laid and the defendant tried. The question was whether the offense of concealing property from a trustee in bankruptcy could be committed in a...