In re Cohan
| Decision Date | 18 June 1930 |
| Docket Number | No. 4317.,4317. |
| Citation | 41 F.2d 632 |
| Parties | In re COHAN. |
| Court | U.S. Court of Appeals — Third Circuit |
Mortimer C. Rhone, of Williamsport, Pa., and Samuel Gubin (of Cummings & Gubin), of Sunbury, Pa., for appellant.
A. R. Jackson, of Williamsport, Pa., for appellee.
Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
This appeal is from a decree of the District Court approving an order made by a referee commanding the bankrupt to turn over to his trustee "goods or merchandise consisting of shoes, overshoes, boots, socks, hose and other footwear to the value of $52,397.61, or the proceeds thereof, which came into his possession between January 1, 1928 and January 5, 1929 and which he had in his possession or under his control January 5, 1929 — the date he filed his petition — and which he concealed or otherwise failed to turn over to his trustee. * * *"
The main dispute in law arises on the bankrupt's assignment of error that the order is invalid because made in the alternative that he turn over goods or the proceeds of their sale, relying on In re Sax (D. C.) 141 F. 223, which we discussed and distinguished in Hirsch v. Schilling (C. C. A.) 28 F.(2d) 171, 172. The later decision rules this case.
As the basis of the turnover order is concealment of assets — whether goods or money — from the trustee, the fact of concealment must be proved. The appellant maintains that there is no evidence that sustains such a finding, and, going a point further, says that the referee himself admitted this lack of evidence and based his decision on a mere assumption, as shown by this statement in his report:
"As there is no specific proof of the hiding away of assets by the bankrupt, or removing them clandestinely from his stores, the Referee thinks the next alternative or assumption (that of concealing the proceeds of sales) the more probable one. Both processes might have been employed.
Notwithstanding this discursive remark, the referee did find that the bankrupt had concealed his property, so the question whether there is evidence that sustains his finding remains.
Undoubtedly, in a proceeding of this kind concealment must be proved. Concealment, however, is the ultimate and decisive fact which, in turn, can be proved in one of two ways: One, by a witness who actually saw the concealment made, which seldom happens; the other, by proving facts from which the fact of concealment may be inferred (which, evidently, is what the referee meant), especially where they suggest and sustain no other inference. For instance, if it is proved that a bankrupt has purchased large amounts of goods within a short period prior to his bankruptcy and has only a nominal amount in his possession at the time of bankruptcy and is unable or unwilling to explain what he has done with them, that is a fact from which it is permissible to infer that he has them in concealment. Or, if he explains the disappearance of the...
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