Rachmil v. United States, 6039.

• Decision Date: 06 October 1930
• Docket Number: No. 6039.,6039.
• Parties: RACHMIL v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

43 F.2d 878 (1930)

RACHMIL v. UNITED STATES.

No. 6039.

Circuit Court of Appeals, Ninth Circuit.

October 6, 1930.

Sam L. Levinson, of Seattle, Wash., for appellant.

Anthony Savage, U. S. Atty., and Jeffrey Heiman and Cameron Sherwood, Asst. U. S. Attys., all of Seattle, Wash.

Before DIETRICH and WILBUR, Circuit Judges, and WEBSTER, District Judge.

The following opinion, prepared by DIETRICH, Circuit Judge, is adopted as the opinion of the court by WILBUR, Circuit Judge, and WEBSTER, District Judge:

PER CURIAM.

In the United States District Court for the District of Washington, Northern Division, appellant was adjudged guilty upon an indictment charging an offense under section 29b of the Bankruptcy Act as amended (11 USCA § 52(b). In substance, the indictment sets forth that on February 21, 1929, he was a dealer in furniture in the city of Seattle, under the name of Bell Town Furniture Company; that on that day an involuntary petition in bankruptcy was filed against him in the United States District Court for that district; that pursuant to the prayer of the petition he was, on March 25, 1929, duly adjudged a bankrupt, and that thereafter, on May 1, 1929, one J. L. McLean was appointed, and two days later he qualified, as trustee in bankruptcy; that beginning on January 25, 1929, and continuously henceforth up to the filing of the indictment, within the district and division aforesaid, appellant knowingly, willfully, and fraudulently concealed from said trustee in bankruptcy personal property belonging to the estate in bankruptcy, consisting of money and merchandise approximating the value of $10,000, the nature and description of which were to the grand jurors unknown. The pertinent part of the statute upon which the charge is predicated provides that: "A person shall be punished * * * upon conviction of the offense of having knowingly and fraudulently (1) concealed from the * * * trustee * * * any property belonging to the estate of a bankrupt." (11 USCA § 52b, 1930 Cumulative Part, page 32, 44 Stat. 665).

Manifestly, the indictment is highly artificial, if not false, upon its face. How appellant could conceal property "belonging to his estate in bankruptcy" "while a bankrupt" before he became a "bankrupt" or had any "estate in bankruptcy," or how he could conceal it from "his trustee" months before there was any such trustee, we are unable to comprehend. The power of Congress to declare the fraudulent concealment by a debtor of his property prior to the institution of bankruptcy proceedings, unless possibly in case he contemplated such proceedings, may be doubted, but that question we need not decide, for the act evinces no such intention. The statutory language above quoted clearly indicates that the term bankrupt is used in a technical sense. To constitute the offense, the concealment must be of "property belonging," not to the debtor, but to his "estate in bankruptcy," and must be made by him "while a bankrupt" or "after his discharge." If the broad construction for which the government contends was contemplated, the latter clause "or after his discharge" would be superfluous, for surely in a popular sense one is to say the least, as much a "bankrupt" after his discharge and while the administration of his estate is pending as he was before any proceeding in bankruptcy was instituted, and how can a person conceal "property belonging to his estate in bankruptcy" when he has not and never has had an "estate in bankruptcy." The pertinency of these comments will appear when the facts are disclosed.

On February 4, 1929, seventeen days prior to the institution of the involuntary proceeding, appellant went from Seattle to Vancouver, B. C., and from there to divers cities in Canada, but at no time thereafter was he in the United States until July of that year, when he was returned upon extradition proceedings. Constructive service only was made in the bankruptcy proceeding, and at no time prior to the return of the indictment was he served with any notice or did he make any appearance or take any steps therein. It is not even shown that he had any knowledge thereof, and indeed the court below held that "it was not necessary that he should actually know a trustee had been appointed for his estate in bankruptcy or that proceedings had been begun"; and, in substance, so advised the jury. The property referred to in the indictment consisted of money realized from the sales of personal assets before he departed and carried by him on his person into Canada. There was testimony given by numerous witnesses who knew him and had had business dealings with him, some of whom were creditors of his estate, that prior to his departure for Canada he had always borne a good reputation for honesty and fair dealing. He testified that he did not go to Canada to defraud or defeat his creditors. But considering the possible inferences to be drawn from the circumstances, it may be said that upon that point the evidence as a whole is conflicting. He further testified that while in Canada, in the latter part of May, he was violently assaulted and robbed of the money he had taken with him from the United States, and some testimony given by Canadian officers and certain circumstances in evidence tended to corroborate his contention in that respect.

Under the plain import of the statute, as we think, "concealment," however flagrant in respect of creditors, prior to the institution of bankruptcy proceedings and the...