Horton v. Mendelsohn

• Decision Date: 03 April 1918
• Docket Number: 2315.
• Citation: 249 F. 185
• Parties: HORTON v. MENDELSOHN et al.
• Court: U.S. Court of Appeals — Third Circuit

249 F. 185

HORTON v. MENDELSOHN et al.

No. 2315.

United States Court of Appeals, Third Circuit.

April 3, 1918

Lee P Stark and George D. Taylor, both of Scranton, Pa., for appellant.

R. L Levy and H. W. Mumford, both of Scranton, Pa., and E. H Delaney, for appellees.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

WOOLLEY Circuit Judge.

On petition charging the bankrupts with concealing from the trustee property belonging to the bankrupt estate, the referee, after hearing, found that the bankrupts had retained and concealed $2,168.21, and, accordingly, entered an order directing them to turn over that sum to the trustee. Upon their failure to comply with the order, the trustee obtained a rule on the bankrupts to show cause why they should not be attached for contempt. The court, after hearing, discharged the rule. The trustee appealed.

The questions raised on appeal are in the main questions of fact as distinguished from matters of law. They arise from the fact that the bankrupts filed in the contempt proceeding the same answer in substance that they had filed in the turnover proceeding, and supported it in part by the same testimony. This was, that they had no money to conceal in the first instance, and, therefore, in the second instance, they had no money to turn over. The trustee maintains that while this defence was appropriate to the turnover proceeding, it was there adjudged against the bankrupts and finally disposed of and, therefore, it could not be employed as a defence in a contempt proceeding where the issue only concerned the bankrupts' present ability to pay the money which the court had previously decided the bankrupts had. Stated differently, the trustee maintains, that on authority of In re Epstein (D.C.) 206 F. 568, and 210 F. 236, 127 C.C.A. 54, the turnover order was a final adjudication that the bankrupts had money and had concealed it, and that that adjudication concluded the court as well as the bankrupts as to that fact. But the trustee complains, that the court did not so regard the turnover order, but, in effect, set it aside by considering again the defence there made and by accepting the evidence there produced as evidence of the bankrupts' present inability to comply with the turnover order.

The single question whether in the contempt proceeding the trial judge disregarded the legal force of the final order in the turnover proceeding by opening the question of the bankrupts' possession and concealment of property and applying the evidence on that issue to the issue in the contempt proceeding affecting the bankrupts' present ability to turn over the money ordered--contrary to the rule In re Epstein-- is a matter of law which the trustee might properly have raised by petition to review and revise (although it is perfectly clear from...