In re Stavrahn

• Decision Date: 09 November 1909
• Docket Number: 42.
• Citation: 174 F. 330
• Parties: In re STAVRAHN.
• Court: U.S. Court of Appeals — Second Circuit

174 F. 330

In re STAVRAHN.

No. 42.

United States Court of Appeals, Second Circuit.

November 9, 1909

John C Tomlinson, Millard F. Tompkins, and John C. Tomlinson, Jr. for petitioner.

Clarence R. Freeman, for respondent.

Before LACOMBE, COXE, and WARD, Circuit Judges.

LACOMBE Circuit Judge.

In the petition it is alleged that the District Judge refused to read or consider two affidavits which the bankrupt submitted in opposition to the motion to punish him for contempt.

The record does not support any such contention. The order, on the contrary, recites the 'reading and filing' of the 'affidavits of H. T. Galpin and Bernard Stavrahn, each verified the 5th day of February, 1909, submitted in opposition to said motion.'

The proceedings in this case, as disclosed by the record, were as follows: Upon a voluntary petition Stavrahn was adjudged a bankrupt on September 15, 1906. Some time prior to August 5 1908-- exactly when does not appear-- the bankrupt applied for his discharge in bankruptcy. Specifications were filed in opposition, charging that he had 'intentionally and fraudulently concealed, while bankrupt, from his trustee, property belonging to his estate in bankruptcy, consisting of money, the proceeds of the sale of certain real estate situated in the borough of Manhattan, city of New York. ' Evidence offered by all parties was taken, the bankrupt himself testifying, and the referee reached the conclusion that:

'Amelia Stavrahn (the wife of bankrupt's brother) was a dummy in all these real estate transactions, and that the real owner of the property was the bankrupt, and that the bankrupt received the profits and has concealed them from the trustee.'

Upon the report of the referee the discharge of the bankrupt was denied by the District Court. From that denial he took no appeal, although the bankruptcy act expressly accords the right of appeal in such cases. Act July 1, 1898, c. 541, Sec. 25, 30 Stat. 553 (U.S. Comp. St. 1901, p. 3432).

Thereafter the trustee obtained an order to show cause why the bankrupt should not be required to turn over to his trustee the sum of $6,000, which it was alleged he had fraudulently concealed from said trustee. The matter was fully inquired into before the referee, who had before him, not only the testimony taken on the former hearing, but also several witnesses, including the bankrupt, who was examined at great length. The subject of investigation was the same real estate transaction in which his sister-in-law had participated. The referee found and reported that:

'The evidence and circumstances surrounding this case establish beyond a reasonable doubt the receipt by the bankrupt of the proceeds of the sale of said real estate in the sum of at least $5,000, and that he has concealed said money, to wit, said $5,000, and that such concealment was fraudulent on his part.'

The referee thereupon, August 5, 1908, made an order directing the bankrupt to pay over to his trustee, within 30 days from the service of the order upon him, the sum of $5,000 so fraudulently concealed. This order was served upon the bankrupt on August 7, 1908. The record does not show that the bankrupt sought to review this order of the referee by petition as provided for in general order 27 (89 F. xi, 32 C.C.A. xxvii).

On December 31, 1908, an order to show cause why the bankrupt should not be compelled forthwith to pay over the $5,000, or in case of failure so to do be adjudged in contempt and punished accordingly was served upon him. This was accompanied by the referee's certificate of disobedience of the order, and the record book, comprising the evidence, and all other papers, were handed up for the information of the judge.

Hearing thereon and on the two affidavits then submitted by the bankrupt was had on February 8, 1909, resulting in the entry of the order now sought to be reviewed.

On this review three contentions are made on behalf of the bankrupt (1) That the petition of the trustee is defective, in that it contains no allegation that the bankrupt was able to comply with the order of the referee after it was served upon him. (2) The court erred in holding that it was...