In re Youroveta Home & Foreign Trade Co., Inc., 111.

• Decision Date: 29 January 1923
• Docket Number: 111.
• Citation: 288 F. 507
• Parties: In re YOUROVETA HOME & FOREIGN TRADE CO., Inc.
• Court: U.S. Court of Appeals — Second Circuit

288 F. 507

In re YOUROVETA HOME & FOREIGN TRADE CO., Inc.

No. 111.

United States Court of Appeals, Second Circuit.

January 29, 1923

Clark Prentice & Roulstone, of New York City (Ezra P. Prentice Maitland Dwight, and Gullie B. Goldin, all of New York City of counsel), for petitioner appellant.

David W. Kahn, of New York City (Edward S. Greenbaum, of New York City, of counsel), for respondent.

This is an appeal from and a petition to revise an order made by a District Judge on August 24, 1922, confirming certain orders and rulings of a referee in bankruptcy. The bankrupt company was adjudicated a bankrupt by the United States District Court for the Southern District of New York on April 13, 1921, and John N. Boyle, Esq., in due course, was appointed its trustee. The bankrupt company had been engaged in large export and import transactions and at the time of the bankruptcy proceedings possessed substantial assets, not only in the United States, but in foreign countries, and particularly in the Far East. Some time before the bankruptcy a large quantity of English woolens, the cost price of which was estimated to be $475,000, purchased by the bankrupt company in England, was shipped into Siberia, en route to Russia. On account of the disturbed military and political conditions then prevailing throughout all of Russia, these woolens could not be sent to their destination, and were placed in storage at some point in Siberia. Gen. Gregory Semenoff, the appellant, was commander of military forces operating in that region and in the progress of his operations, it is alleged, seized these woolens and confiscated the same making no payment of any character whatever to the bankrupt company. Representations with reference to this seizure were made by the State Department on behalf of the bankrupt company, which was an American concern; but these did not avail to bring about payment for the property seized. Thereafter the trustee in bankruptcy commenced a suit against the appellant in the courts of China, in which country the appellant then resided, for the conversion of this property, and in this suit the trustee attached certain property belonging to the appellant. This suit is still pending.

We understand that there is no denial of any of these facts, except the fact of the seizure of the property in question by the appellant or by troops operating under his command and upon his orders. Sometime during the month of April, 1922, it was announced, through the newspapers, that the appellant was on his way to this country and thereupon the trustee applied to the referee in bankruptcy for an order for the examination of the said appellant under section 21a of the Bankruptcy Act (Comp. St. Sec. 9605) with respect to the acts, conduct, and property of the bankrupt. This application was granted, and an order was made requiring him to appear before the referee and be examined with respect to the acts, conduct, and property of the bankrupt. A subpoena was issued pursuant to that order, and was served upon appellant after his arrival in New York City. The appellant appeared on April 7, 1922, the time designated in the subpoena, before the referee accompanied by counsel. He was duly sworn and by consent his examination was adjourned until the next day. In the meantime other witnesses were examined. On April 8, 1922, he again appeared, accompanied by counsel, and submitted to an examination. The examination was thereupon adjourned by consent until April 10th, at which time the witness appeared again with counsel and submitted to further examination. The matter was then adjourned by consent to April 13, 1922. Again the appellant appeared, this time accompanied by new counsel, who stated that they had been substituted in place of the former attorneys for the appellant, and who made a long statement upon the record with regard to the military activities in which the appellant was engaged at the time of the alleged seizure of the property in question.

Counsel then argued that the status of the appellant at the time he was engaged in these military activities entitled him to immunity against any examination, and an application was thereupon made upon these oral statements to vacate the order for the examination. The referee denied this application and directed the examination to proceed. Thereupon counsel for the trustee propounded a number of questions to the appellant. Objections were made to these questions by the appellant's counsel, but the same were overruled by the referee, who directed the witness to answer. The witness declined to answer upon advice of his counsel. Thereafter the appellant presented formal motion papers to the referee on an application to vacate the order for his examination, or in the alternative to limit the said examination. This motion was denied by the referee, with a memorandum. Thereupon the appellant filed a petition to review the said order of the referee. The referee duly filed his certificate upon this petition to review, and in due course a hearing upon this certificate came on before one of the District Judges. As already stated, he confirmed the orders and rulings of the referee. The petition to appeal and petition to revise were then filed by the appellant.

It may be mentioned that between the time of the last hearing before the referee, when the appellant declined to answer the questions which had been ruled proper, and the time of the hearing upon the petition to review the referee's order, the appellant, according to newspaper accounts, left the United States and sailed from some Canadian port for some point in the Far East, and that he has not since then been, and is not now, within the jurisdiction of this court. These facts appear in the papers filed in this court in connection with a motion made to dismiss the petition to appeal and petition to revise, and such facts are not denied.

The status of Gen. Semenoff, throughout the period respecting which the trustee asserts the right to question him about his acts, in the main is as follows: In 1917, Gen. Semenoff, while serving with his regiment against the German armies on the Galician front, was recalled to Petrograd by the provisional government, known as the Kerensky government, and directed to proceed to Siberia for the purpose of recruiting military detachments. Gen. Semenoff went to Siberia, but before he was able to complete the organization of such detachments and return to the Russo-German front, the provisional government under Kerensky was overthrown. He thereupon established military headquarters at Manchuria on the Russo-Manchurian border and commenced military operations against the German and Austrian prisoners, who were armed and commanded by Bolshevik agents, and who were attacking the Russian forces. In the fall of 1918, a Siberian provisional government was set up at Omsk, and Gen. Semenoff placed himself and his troops under the direction of that government, and was appointed commander of the Pri-Amur Army Corps. About May, 1919, Admiral Kolchak, who had been appointed by the Siberian provisional government supreme ruler of Russia, appointed Gen. Semenoff commander of the Sixth Army Corps of the Eastern Siberian army. About December, 1919, Admiral Kolchak appointed him commander of the Pri-Amur, Trans-Baikal, and Irkutsk military districts, and in January, 1920, Admiral Kolchak conferred upon him full military and civil power throughout Eastern Siberia.

Before ROGERS, HOUGH, and MAYER, Circuit Judges.

ROGERS Circuit Judge (after stating the facts as above).

As this proceeding comes into this court upon appeal and petition to revise, and as the two methods are mutually exclusive and not cumulative, and as we think the petition to revise is the appropriate method by which to have this court review the questions which are presented, we dismiss the appeal and entertain the petition to revise. Our jurisdiction rests upon section 24b of the Bankruptcy Act (Comp. St. Sec. 9608). The order appealed from was taken as an intermediate administrative step in a proceeding in bankruptcy.

The petitioner appellant, Gen. Semenoff, is a citizen and resident of Russia, and as he was passing through the United States and through the state of New York on his way to France, was subpoenaed to appear before a referee in bankruptcy that he might be examined concerning 'the acts, conduct and property' of the bankrupt, the Youroveta Home & Foreign Trade Co., Inc. The subpoena was issued upon the petition of the trustee of the bankrupt upon his representation that Semenoff had information concerning the acts, conduct, and property of the bankrupt which would be of benefit to the trustee in the administration of the estate.

The Bankruptcy Act, as amended in 1903, provides in section 21a as follows:

'A court of bankruptcy may, upon application of any officer, bankrupt, or creditor, by order require any designated person, including the bankrupt and his wife, to appear in court or before a referee or the judge of any state court, to be examined concerning the acts, conduct, or property of a bankrupt whose estate is in process of administration under this act. * * * ' 32 Stat.p. 798, c. 487.

Under the section quoted a court of bankruptcy may require 'any person,' who is within its jurisdiction and can be served, to appear and be examined 'concerning the acts conduct, or property' of the bankrupt. The 'any person' referred to need not be a citizen of the United States, or even a resident within the United States, if only he is at the time in this country and is properly served. The power to require 'any person' to attend and be examined is given generally, and we cannot write into the act exceptions and limitations which it does not contain. It is...