In re Tabak, 8073.
| Decision Date | 26 April 1928 |
| Docket Number | No. 8073.,8073. |
| Citation | 34 F.2d 209 |
| Parties | In re TABAK et al. |
| Court | U.S. District Court — Western District of Pennsylvania |
Harry Shapiro, of Philadelphia, Pa., for bankrupt.
Bertram K. Wolfe and Aarons, Weinstein & Goldman, all of Philadelphia, Pa., for trustee.
The bankrupts in this case are the two individual members of a firm and the partnership. The order of the referee under review is one in effect that the individual bankrupts deliver up to the trustee assets belonging to the firm which had been withheld from him. The referee has followed the usual mode of dealing with the subject, for following which there are well established precedents. A starting point is found in an inventory of merchandise stock on hand at a given date. This is expressed in terms of money either at cost price or at an inventory price. This gives a new starting point in a sum of money. To this is added other sums of money which represent the cost price of fresh merchandise bought after inventory taken. Whatever sales have been made are brought into the account by adding profits or subtracting losses, as the case may be, and a further usually liberal deduction is made for all expenditures. In this way a balance is struck. As a matter of accounting, this method is not open to criticism and presents no difficulties. As the basis, however, for an order upon an individual to surrender up property, the results of the accounting lack definiteness both in respect to the person who must obey the order and what property he is to give up. The real finding from the accounting is that the firm should have been in the possession of assets consisting of money and merchandise described and expressed in terms of money. As neither the money nor any merchandise came to the trustee and its whereabouts are unknown, the inference is drawn that it is being concealed and withheld.
As an answer to the petition for a discharge, the fact findings made are sufficient and satisfying. As a basis, however, for an order of commitment for contempt, they present this difficulty: The bankrupt asks to be relieved because he does not have the property which he has been commanded to surrender. The view must be taken either that he is concluded by the finding of the referee, or there must be a second inquiry into what he had. It is better that this inquiry when first made be made once and for all. Of course, it is true that the findings upon the first inquiry and the second differ. The first relates to one date and the second to another. The question on an application for relief is not whether the property ought to be at hand or at the time of bankruptcy was on hand, but whether at the time of application for relief was at hand. This distinction is clear enough, but the reason given for not delivering up the property is that the bankrupt does not have it, and he does not then have it because he never did have it. This is the very fact which has already been found as the basis for the order.
The situation presented then is that above mentioned. It must either be held that the bankrupt is concluded by the finding made or the inquiry originally made must be repeated. Neither course is wholly satisfactory. If in addition to the accounting fact result found the referee makes the further finding of the specific property, money, merchandise, or whatever it is which is being withheld and who is withholding it, all subsequent inquiry may be restricted to what has become of the property since the order was made. The additional fact finding suggested has a bearing upon the order to be made. It is futile to order that a person give up possession of that which he does not have, and it is more satisfactory to make the inquiry before the order is made than to make the same inquiry into the reason given for not obeying the order.
The cause is referred back to the referee for the purpose of making the additional finding of what property is being concealed and whether both or which one of the individual bankrupts have control of it, so...
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