In re Byrd Coal Co.
| Decision Date | 06 April 1936 |
| Docket Number | No. 310.,310. |
| Citation | 83 F.2d 190 |
| Parties | In re BYRD COAL CO. McCABE v. GLADSTONE. SAME v. MEYERSON. |
| Court | U.S. Court of Appeals — Second Circuit |
Herman G. Robbins, of Brooklyn, N. Y. (William Shapiro, of New York City, on the brief), for trustee.
David Haar, of New York City, for respondents.
Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
These are appeals from orders disposing of a petition by a trustee in bankruptcy to secure the possession of three loose leaf books with black covers, alleged to be the property of the bankrupt, and relevant in tracing its assets. The respondent Gladstone was the sole shareholder of the company, its president, and in entire control of it; Meyerson was his accountant; the business was selling coal. These "black books," as they were called, contained an account of gratuities or bribes paid by the bankrupt to agents — stationary engineers and the like — of its customers; since the transactions were considered discreditable, they were not entered in the ordinary books, where they appeared, lumped together, only as salesmen's expenses. As the books contained a list of all the bankrupt's customers and of the tonnage bought, because the bribe was calculated at so much a ton, they might be valuable as customers' lists, but in this aspect both the respondents minimize their importance, saying that they knew by heart all their customers. The books were certainly in the bankrupt's office as late as April eleventh, the day before petition filed; they were ordinarily kept in the desk of Gladstone, or in a safe or steel cabinet in the same room. The referee after hearing the proof at length, concluded that Meyerson, the accountant, had abstracted them on the morning of the twelfth, before the receiver appeared, and caused them to be taken to the office of the Gauley Coal Company, another coal dealer, operated by Gladstone's brother. He also found that Gladstone had directed Meyerson to take them and held him as having them in his control. On the first appeal to the District Court these orders were reversed, because the judge thought the findings not explicit enough, but upon a new hearing without further testimony the referee made express findings of possession or control, and entered a new order. On appeal from this the judge affirmed the order as to Meyerson, on the ground that the credibility of witnesses was not for him; but reversed it as to Gladstone, because he was not shown to have been in possession or control. The defeated party then appealed to this court in each case.
The trustee showed that on the evening of the eleventh Meyerson went to the office of another company just across the hall, then in charge of an aged watchman, apparently a disinterested witness, whom he asked if he might leave a package of books there over night; he did leave them there and took them back to the office of the bankrupt early next morning. Craig, an employee of the bankrupt, somewhat hostile to Gladstone but not otherwise discredited, testified that he came in on the morning of the twelfth and found Meyerson packing up some papers, among which he did not however identify the books; and that Meyerson told him that he was taking these away on Gladstone's orders. Gladstone was then eating breakfast at a nearby restaurant, where Craig went and berated him for taking away any papers at such a time, but got no definite answer. He went back and saw a bundle of papers in a car, driven by one, Turpin, a truck driver who had worked for Gladstone theretofore. The trustee's only other witness to the abstraction was Rosen, also an employee, who said that the evening of the eleventh he had visited Gladstone at his home, who told him to be in the office early the next morning to help Meyerson take away some books and papers. He did as instructed and saw Meyerson take out a bundle "with the books" and give them to Turpin who put them into the car. On the following Monday he saw Meyerson at the Gauley Coal Company's office, who told him that he was going out on the road and that he did not need a list of the bankrupt's customers which Rosen offered him, because he could get them from the "black books." Rosen had been once convicted for cheating, though his conviction was reversed; he was contradicted by Sillitto, an employee of the Gauley Coal Company and former employee of the bankrupt, who said that on the morning of the twelfth he had seen Rosen in Coney Island. His presence at the bankrupt's office that morning was also denied by the bankrupt's stenographer and by Turpin. The respondents admitted that the books had been in the office, but denied any share in their disappearance; they contradicted Rosen's testimony as to his talks with them and that he was there that morning at all. Gladstone's lawyer, Mandelbaum, had been at the restaurant when Craig appeared; he bore out Gladstone that Craig's anger had been only at not being told earlier of the bankruptcy, and that he had not complained about taking away the papers. Turpin agreed that he had taken a package from the office of the bankrupt to the Gauley Company on the morning of the twelfth, which he received from Meyerson, but Meyerson had told him that it was only his baby's picture; and he declared that the parcel contained no books, though it is hard to see how he could tell with any certainty. This was the substance of the evidence.
A trustee's petition to compel the bankrupt to surrender property...
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