In re Fellerman

• Decision Date: 01 November 1906
• Parties: In re FELLERMAN et al.
• Court: U.S. District Court — Southern District of New York

149 F. 244

In re FELLERMAN et al.

United States District Court, S.D. New York.

November, 1906

Abram I. Elkus, James N. Rosenberg,and Robert P. Levis, for the motion.

Leonard Bronner and Roger Foster, opposed.

HOUGH District Judge.

In and prior to August, 1905, the persons proceeded against (who are father and son) were in business in this city under the firm name of A. Fellerman & Sons. In the month named, an involuntary petition in bankruptcy having been filed against them, a receiver was appointed and such proceedings were subsequently had as that on November 9, 1905, a trustee was appointed. Prior to the appointment of a trustee both the bankrupts were examined in this court under section 21a, c 541, Act July 1, 1898, 30 Stat. 552 (U.S. Comp. St. 1901, p 3430), and further testimony upon the same points was taken at the first meeting of creditors.

The trustee now moves to punish the bankrupts and each of them for contempt (1) because, although duly ordered so to do by the decree of adjudication, they have never filed schedules as required by the act, nor, indeed, any schedules at all (2) because they, and each of them, have failed to deliver either to their receiver or trustee the books of account of their joint business, and have failed to give any reasonable explanation for their failure so to do; (3) because in the progress of their several examinations they, and each of them, have testified with willful falsity; and (4) because they, and each of them, have repeatedly and continuously testified in their several examinations in a vague, unsatisfactory, ambiguous, and contradictory manner, with the intention of obstructing the administration of justice and preventing the collection and distribution of their property and the discovery of the whereabouts of the same or any considerable portion thereof.

These charges are embodied in an order to show cause based upon certain affidavits and fortified by the records of this court containing the alleged obnoxious testimony and the order of adjudication. The order has been served personally upon each of the bankrupts, and required their personal attendance in court. Upon the adjourned return day neither of the defendants appeared, but they interposed by their counsel a joint document called an 'answer,' which is verified by the statement that 'the same is true to the best of their knowledge, information, and belief,' which verification is signed by their cross-marks. Abraham Fellerman, although foreign born, has been in this country for 37 years, and the record of his testimony shows him to be ready in English speech and obviously of quick apprehension. It is asserted, however, that he cannot write in English or any other language. Isidor Fellerman is native born, and has, by his own evidence, sufficient education to act as a traveling salesman and conduct the correspondence of his late firm. The answer contains no new matter, and in respect of the alleged falsity, etc., of the testimony, merely denies such falsity, vagueness, ambiguity, or the like. As to the failure to file schedules, it denies that any order therefor was made, and as to the question of books denies that the same were 'in the bankrupts' premises upon the day of the filing of the petition,' a fact which is not alleged and is immaterial; the question being whether they were within the bankrupts' control on that day.

Upon the issues thus framed, without any personal appearance or request for further examination, the bankrupts have elected to rest; and their counsel now assert that the proceeding is defective, in that it proceeds jointly against these two men, declaring that each is entitled to a 'separate proceeding and separate petition,' and to a jury trial, and, further, that the answer is 'a complete justification of their conduct and shows that they have not been guilty of any intentional wrongdoing.'

The first branch of this contention depends upon the proposition that, inasmuch as contempt of court is a criminal offense (New Orleans v. Steamship Co., 20 Wall. 392, 22 L.Ed. 354; Ex parte Swan, 150 U.S. 652, 14 Sup.Ct. 225, 37 L.Ed. 1107), therefore the rules of criminal proceedings must apply, and that, inasmuch as the two Fellermans could not be indicted jointly for perjury, neither can they be proceeded against together for a contempt involving false swearing.

It is certainly clear that one accused of contempt is not entitled to a jury trial (In re Debs, 158 U.S. 594, 15 Sup.Ct. 900, 39 L.Ed. 1092), and, indeed, 'a contempt is sui generis. It may be considered as having the same meaning as a misdemeanor, but it differs from it, in this: that it is not indictable, but punishable summarily. No one has ever claimed that a party is entitled to a trial by jury in a proceeding for a contempt. It must, therefore, follow that the rules regarding indictments are not applicable to proceedings for contempt. ' In re Terry (C.C.) 37 F. 650.

The second branch of this argument-- i.e., the incontrovertible nature of the answer-- fails to recognize the fact that this proceeding is in a court of equity. It has been said that 'one proceeded against as for a contempt has the right to purge himself if he can by his own oath, and that the common law is so rigid in this matter that it does not allow the sworn answer of the respondent to be controverted as to matter of fact by any other evidence. ' In re Pitman, Fed. Cas. No. 11,184; U.S. v. Dodge, Fed. Cas. No. 14,975. But the procedure here taken is in entire conformity with the practice of courts in equity as carefully considered in United States v. Anonymous (C.C.) 21 F. 761. 'The court proceeds to investigate ex parte the alleged contempt, and being satisfied thereof directs that the guilty person stand committed, unless he shall, on the day assigned, show cause to the contrary. This order nisi being served, if no answer is made, the rule is made absolute, and the accused is then arrested and imprisoned according to its terms. If the accused appears, he is heard in any way that suits the convenience of the court, by an examination ore tenus, upon affidavits, or by propounding interrogatories. If he deny the contempt the court, either for itself or by reference to a master, ascertains the facts upon the proof, either party examining witnesses by affidavit or otherwise; but there never was in a court of equity as at common law any rule that the answer of the respondent to the interrogatories should be taken as true and he be discharged if he deny the contempt. ' Id., p. 767. See, also, U.S. v. Debs (C.C.) 64 F. 738.

These respondents have chosen to rest upon an answer which is in the main a mere statement of conclusions, which is, as to the order for schedules, false by the records of this court, and as to the nonsurrender of books of account attempts to make an issue not presented by the trustee's proceeding. And they have finally verified the whole in a method so unusual in this jurisdiction as to excite suspicion of the good faith of those who pursue it; for it cannot be suspected that they have not been ably advised.

Contempt of court involves two ideas-- disregard of the power of the court and disregard of its authority. Disregard of power, in that lawful orders have not been obeyed; and disregard of authority, in that its jurisdiction to declare the law and ascertain and adjudicate the rights of the parties is hindered, prevented, or set at naught. Such...