In re Sterling-Harris Ford, Inc.

Decision Date16 April 1963
Docket Number13871.,No. 13757-13758,13757-13758
Citation315 F.2d 277
PartiesIn the Matter of STERLING-HARRIS FORD, INC., Bankrupt. Leroy SILVERSTEIN and George Harris, Respondents-Appellants, v. Craig PHELPS, Petitioner-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Julius Lucius Echeles, Frank W. Oliver, Chicago, Ill., for respondents-appellants.

Burton E. Ericson, John H. Bishop, Chicago, Ill., for appellee.

Before SCHNACKENBERG, KNOCH and SWYGERT, Circuit Judges.

SWYGERT, Circuit Judge.

This appeal involves turnover orders against Leroy Silverstein and George Harris, respondents-appellants. The matter arises out of a bankruptcy proceeding against Sterling-Harris Ford, Inc.

The turnover petition, filed on May 11, 1961, alleged that Sterling-Harris Ford, Inc. was adjudged a bankrupt on March 15, 1961; that at the time the petition for bankruptcy was filed, March 13, 1961, the bankrupt had $25,000 in a commercial bank account, and on that date issued its check for this amount, payable to one Richard E. Korem, who then deposited the check in a bank account maintained by him and his wife; that thereafter on March 15, 1961, Korem delivered to Harris the sum of $7,500 by check, and a similar amount by check to Silverstein; and that the money was the property of the bankrupt estate.

Silverstein answered by admitting he had received the $7,500 check and that a substantial portion of the proceeds was used to redeem payroll checks previously issued to the bankrupt's employees. He refused, however, to testify at the turnover hearing on the basis that his testimony might tend to incriminate him. He further refused to introduce any evidence in response to the petition. Harris likewise refused to testify or to introduce any evidence. His only response to the petition was in the form of "a response" which stated that "if respondent could testify without waiving his right to invoke the protection of the Fifth Amendment to the Constitution" he would deny that he possessed the funds of the bankrupt estate.

In addition to the responses, Silverstein filed a motion for a change of venue from the referee, and Harris, in his response, suggested that the referee disqualify himself. The referee denied the motion and suggestion and on June 14, 1961, issued the turnover order as against Harris followed by a similar turnover order against Silverstein on August 9, 1961.

Respondents filed petitions for review and Judge Robson, in a memorandum opinion affirming the orders of the referee, said:

"This court concludes that there was clear and convincing evidence before the referee to show that the sums alleged were assets of the bankrupt when the bankruptcy petition was filed; that the instant petitioners acquired possession thereof, and that the brief interval of time since they acquired possession, and other evidence in the record, gave rise to the presumption that their possession continued down to the date of the turnover proceedings."

The referee and the district judge used the doctrine of "continued possession" in determining that respondents were yet in possession of the respective sums of money at the time of the turnover proceedings.

After notices of appeal from the orders of the District Court had been filed, the trustee moved for a referee's certificate that respondents had failed to obey the orders. The referee issued the certificate and on June 27, 1962, after each respondent had declined to offer any testimony on his behalf, the district judge entered orders holding both respondents in contempt.

Appeals from the initial turnover orders and the contempt orders were consolidated in this court.

We find no error in the record of the proceedings before the referee or the District Court.

Respondents contend that the referee should have disqualified himself because he had corresponded with agents of the Federal Bureau of Investigation and the United States Attorney in connection with possible...

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11 cases
  • In re Santaella
    • United States
    • U.S. Bankruptcy Court — Southern District of Florida
    • October 23, 2002
    ... ... See Leach v. Alley (In re Kirk Kabinets, Inc. ), 393 F.Supp. 798, 801 (M.D.Ga.1975). As described below, the Trustee has presented substantial ... See In re Sterling-Harris Ford, Inc., 315 F.2d 277, 279 (7th Cir.1963) (holding that turnover defendants are free to assert ... ...
  • National Acceptance Co. of America v. Bathalter
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • April 20, 1983
    ... ... Carton, supra (answers to deposition questions) and to the pleading stage, In Re Sterling Harris Ford, Inc., 315 F.2d 277, 279 (7th Cir.), cert. denied sub nom. Silverstein v. Phelps, 375 U.S ... ...
  • Gabriel v. Columbia Nat. Bank of Chicago as T/U/T 2292
    • United States
    • United States Appellate Court of Illinois
    • April 10, 1992
    ... ... In re Sterling-Harris" Ford, Inc. (1963), 315 F.2d 277, cert. denied 375 U.S. 814, 84 S.Ct. 46, 11 L.Ed.2d 50 ...    \xC2" ... ...
  • In re Salzman
    • United States
    • U.S. Bankruptcy Court — Southern District of New York
    • June 9, 1986
    ... ... Metro Corrugated Containers, Inc. v. Owens-Illinois Glass Co., 185 F.Supp. 359, 361 (E.D.N.Y.1960). Similarly, the guarantees would ...          Silverstein v. Phelps (In re Sterling-Harris Ford, Inc.), 315 F.2d 277, 279 (7th Cir. 1963), cert. denied sub nom. Silverstein v. Phelps, ... ...
  • Request a trial to view additional results
2 books & journal articles
  • Table of Cases
    • United States
    • ABA Antitrust Library Antitrust Evidence Handbook
    • January 1, 2016
    ...1993), 82, 117 Stelwagon Mfg. Co. v. Tarmac Roofing Sys., Inc., 63 F.3d 1267 (3d Cir. 1995), 25, 188 In re Sterling-Harris Ford, Inc., 315 F.2d 277 (7th Cir. 1963), 137 Sterling Merchandising, Inc. v. Nestle, SA, 656 F.3d 112 (1st Cir. 2011), 188 Sterling Sav. Bank v. Citadel Dev. Co., Inc.......
  • The Privilege Against Self-Incrimination
    • United States
    • ABA Antitrust Library Antitrust Evidence Handbook
    • January 1, 2016
    ...could invoke privilege); Coquina Investments v. TD Bank, N.A., 760 F.3d 1300 (11th Cir. 2014); In re Sterling-Harris Ford, Inc., 315 F.2d 277, 279 (7th Cir. 1963) (respondents in hearing arising out of bankruptcy proceeding could invoke privilege); Adelphia Recovery Trust v. Bank of Am., N.......

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