In re Baumhauer

• Decision Date: 03 June 1910
• Citation: 179 F. 966
• Parties: In re BAUMHAUER.
• Court: U.S. District Court — Southern District of Alabama

179 F. 966

In re BAUMHAUER.

United States District Court, S.D. Alabama.

June 3, 1910

Fitts &amp Leigh, for appellant.

R. H. &amp R. M. Smith, for objecting creditors.

TOULMIN District Judge.

It is the recognized rule of the courts of bankruptcy, that, on review of the decision of a referee based upon his conclusion on questions of fact, the court will not reverse his findings unless the same are so manifestly erroneous as to invoke the sense of justice of the court.

'He sees and hears the witnesses, and his vantage ground is much better than that of a court for determining the credibility of the witnesses and the weight of their testimony. ' In re Stout (D.C.) 109 F. 794.

In the case of Southern Pine Company v. Savannah Trust Company, the Circuit Court of Appeals of the Fifth Circuit said:

'The established rule seems to be that the findings of fact by a referee, who sees and hears the witnesses testify, have every reasonable presumption in their favor, and should not be set aside or modified unless it clearly appears that there was error or mistake.' 15 Am.Bankr.Rep. 618, 141 F. 802, 73 C.C.A. 60.

'The District Court will not interfere with the action of the referee in bankruptcy as to his findings on facts, unless the same are manifestly erroneous. ' In re Waxelbaum, 101 F. 228. See, also, In re Stout, 6 Am.Bankr.Rep. 505, 109 F. 794; In re Lafleche, 6 Am.Bankr.Rep. 483, 109 F. 307; In re Covington, 6 Am.Bankr.Rep. 373, 110 F. 143; In re James Nassau, 14 Am.Bankr.Rep. 828, 140 F. 912; In re Douglas C. Kenyon, 19 Am.Bankr.Rep. 194, 156 F. 863.

'A referee's finding of fact that depends upon the truthfulness, not merely the accuracy of oral testimony, should be upheld unless clearly wrong. ' In re John R. Shriver, 10 Am.Bankr.Rep. 746, 125 F. 511; In re Swift, 9 Am.Bankr.Rep. 237, 118 F. 348; In re West, 8 Am.Bankr.Rep. 564, 116 F. 767.

'The findings of fact of a referee as to the validity of a claim will not be overruled, except upon convincing proof that he was wrong in his conclusions. ' In re Hatem (D.C.) 20 Am.Bankr.Rep. 470, 161 F. 895.

The contention of the claimant is that he, having filed his claim properly verified, made out his case, and that he should have been allowed his entire claim.

It is true that the claimant filed a formal proof of claim against the bankrupt estate, and it is also true that this proof of claim is prima facie evidence that the allegations made therein are correct, and this prima facie evidence must prevail until it shall be properly and successfully attacked.

In Re Castle Braid Company (D.C.) 145 F. 228, the court said:

'The allegations of the proof of claim are to be taken as true. If they set forth all the necessary facts to establish the claim, and are not self-contradictory, prima facie, they establish the claim, * * * and the objector is then called upon to produce evidence and show facts tending to defeat the claim of probative force equal to that of the allegations of the proofs of claim. The burden of proof is always on the claimant; but, as probative force is given to the allegations of the proof of claim, * * * this must be met, overcome, or at least equalized, by the objecting party. ' Whitney v. Dresser, 200 U.S. 532, 26 Sup.Ct. 316, 50 L.Ed. 584.

If there be proof of facts sufficient to rebut the prima facie proof, the referee should disallow the claim unless the claimant produces further evidence sufficient to establish his claim.

The court in the case of In re Hatem, 161 F. 896, said:

'As to the findings of fact, the court would be loath to overrule the decision of a referee who has heard the witnesses testify, looked into their eyes, and observed their deportment on the stand, especially in a matter like this, largely local, and will not do so, except on convincing proof that the referee is wrong in his conclusions. * * * The bankrupt and claimant both testified as to this pretended indebtedness. They produced notes signed by the one and held by the other. * * * The referee did not believe either the bankrupt or claimant, and no evidence has been produced which tends to satisfy this court the referee was wrong in not believing them.'

In the case at bar the claimant, though present at the hearing, did not testify; but the bankrupt did testify in behalf of the claimant. The referee had the opportunity to see and hear him and observe his manner while testifying, which is an advantage of great value in cases of this character. This witness' testimony is in some material respects vague and uncertain, if not evasive. He stated that he borrowed $15,000 from the claimant at divers times and in divers amounts from January, 1907, to April, 1908, but that he did not remember the specific dates or months in which he obtained the money nor did he remember the specific amount ...