Samel v. Dodd

• Decision Date: 02 January 1906
• Docket Number: 1,465.
• Parties: SAMEL ET EL. V. DODD
• Court: U.S. Court of Appeals — Fifth Circuit

142 F. 68

SAMEL ET EL. V. DODD

No. 1,465.

United States Court of Appeals, Fifth Circuit.

January 2, 1906

On Rehearing, February 6, 1906.

Arthur Heyman and Victor L. Smith, for petitioners.

John M Slaton and Benj. Z. Phillips, for respondent.

Harry Dodd, receiver of Springer, Samel & Saul, bankrupts, a firm composed of I. Springer, A. Samel and S. Saul, filed a petition to require the bankrupts to show cause why they should not deliver goods, wares, and merchandise, or money in their possession, custody, or control, to the value of $40,000, and in default thereof why they should not be adjudged in contempt. The receiver was subsequently elected trustee, in whose name the proceeding was thereafter prosecuted. The petition was allowed by the court, the bankrupts duly answered, and a hearing was had, with the result that the referee found adversely to them. The matter then went to the judge for determination upon exceptions to the report of the referee. By an order, passed March 21, A.D. 1905, of which the following is a copy, the bankrupts were adjudged guilty of contempt and ordered to pay over to the trustee the sum of $2,417.83: 'The trustee in bankruptcy in the above-noted case having filed contempt proceedings against the said bankrupts, and the matter coming on for a hearing before the court on exceptions to the report of the referee to whom the matter had been referred, and the court having this day rendered his opinion upon said proceedings, therefore, in accordance with said opinion, it is adjudged by the court that the said I. Springer, A. Samel and S. Saul, constituting the firm of Springer, Samel & Saul as individuals and as partners, are guilty of contempt in failing and refusing to turn over to the trustee assets belonging to the bankrupt estate, in violation of the bankrupt law. And it is ordered and adjudged by the court that the said named parties pay over to Harry Dodd, the trustee in bankruptcy, the sum of twenty-four hundred, seventeen and 83-100 dollars ($2,417.83), and all costs of this proceeding to be taxed by the clerk, including the stenographer's bill, and upon failure to make such payment at the expiration of five (5) days from the date of this judgment they be committed to the Fulton county jail by the marshal of this district, there to remain until they shall have purged themselves of contempt, or until further order of this court. It is further ordered and adjudged that, in accordance with the opinion of the court this day filed, the contempt proceedings be retained and held open for any other and further action, as the court may be advised, and until the determination of any proceedings the trustee by advice of his counsel may desire to institute, looking to the ascertainment of the amount of goods which went into the possession of J. Saul & Co., and the character of their holding.'

This order was modified by the court on April 1, A.D. 1905, by an order of which the following is a copy: 'Upon considering the order passed in the above-stated matter on the 21st day of March, 1905, it is ordered that so much of said original order as requires the bankrupts, I. Springer, A. Samel, and S. Saul, to pay all the costs of the contempt proceedings to be taxed by the clerk including the stenographer's bill, within five days from said order, be stricken, and that said order be so changed as to require the bankrupts to pay to the trustee only the amount of said judgment, viz., $2,417.83, and that the time for the payment of said sum be extended to Saturday, April 1, 1905. It is further ordered that the clerk tax the costs in said case against the defendants, as in such cases provided by law.'

A motion for rehearing made by the bankrupts was overruled; and the following statement, referred to by counsel for the petitioners as a 'further decree' was filed by the court, April 10, A.D. 1905: 'The question having been raised by counsel as to how far the order made in this case on March 21, 1905, and renewed on the 7th day of April, 1905, shall be enforced: I do not believe this rule should be enforced against I. Springer. I am satisfied from Springer's evidence, and from the other evidence in the case, that it is not in his power to produce any of the property that is now being withheld from the trustee. I think the other two defendants, Samel and Saul, can do so. It may be that Springer was a party to this fraudulent withdrawal of goods but the other parties to the transaction have, as I believe, for reasons of their own, refused to allow Springer to participate further in the proceeds of this fraudulent transaction, and he has no further control of the goods so withdrawn.'

The bankrupts Samel and Saul thereupon filed their petition to revise, in matters of law, the orders and decrees of the District Court.

Before PARDEE and SHELBY, Circuit Judges, and MAXEY, District Judge.

MAXEY District Judge, having stating the facts, .

The following propositions seem to be settled law: (1) In proceedings like the present the Court of Appeals may superintend and revise the action of the District Court only in matters of law Bankr. Act July 1, 1898, c. 541, Sec. 24b, 30 Stat. 553 (U.S. Comp. St. 1901, p. 3432); Bank v. Title & Trust Co., 198 U.S. 280, 25 Sup.Ct. 693, 49 L.Ed. 1051; Mueller v. Nugent, 184 U.S. 1, 22 Sup.Ct. 269, 46 L.Ed. 405; In re Purvine (5th Circuit) 96 F. 192, 37 C.C.A. 446; In re Rosser (8th Circuit) 101 F. 562, 41 C.C.A. 497; Printing Company v. Brewing Company (6th Circuit) 101 F. 699, 41 C.C.A. 614; In re Richards (7th Circuit) 96 F. 935, 37 C.C.A. 634; In re Taft (6th Circuit) 133 F. 511, 66 C.C.A. 385; In re Pettingill & Co. (C.C.A. 1st Circuit) 137 F. 840; In re O'Connell (C.C.A. 1st Circuit) 137 F. 838. It was further held, in the case of In re Pettingill & Co., supra, that the opinion of the trial court may be looked to for the purpose of determining in a general way the propositions on which the case has been disposed of, and especially the questions of law which were passed on. (2) Jurisdiction exists in courts of bankruptcy to require, in a summary manner, the bankrupt to pay over money, or to surrender other property in his possession and under his control belonging to his estate. And for disobedience of such order the court has the power, by attachment for contempt, to enforce compliance. Mueller v. Nugent, supra; Trust Co. v. Wallis (3d Circuit) 126 F. 464, 61 C.C.A. 342; In re Purvine, supra; Boyd v. Glucklich (8th Circuit) 116 F. 131, 53 C.C.A. 451; In re Rosser, supra. (3) The order to pay over money, or to surrender other property as the case may be, in the possession of the bankrupt and forming part of his estate, is not an order for the payment of a debt, but an order for the surrender of assets of the bankrupt placed in custodia legis by the adjudication; and his commitment upon refusing to comply with the order is not imprisonment for debt. Mueller v. Nugent, supra; In re Purvine, supra; In re Rosser, supra.

Tested by the principles of law above announced, and taking the facts as they are embodied in the opinion of the trial court, the question arises: Was the order, requiring the petitioners to pay over to the trustee the sum of $2,417.83 a valid order? The trial court found, as matters of fact, that a large amount of goods, not specifically described, was withdrawn by the bankrupts from their stock; that such goods were held by them in some way in fraud of their creditors; and that it was within the power of the bankrupts to produce the same and turn them over to the trustee. The bankrupts, by the terms of the order, were adjudged guilty of contempt 'in failing and refusing to turn over to the trustee assets belonging to the bankrupts' estate, in violation of law. ' And it was further ordered and adjudged, following the language of the order, 'that said named parties pay over to Harry Dodd, the trustee in bankruptcy, the sum of $2,417.83,' and upon failure to make such payment they were ordered committed to jail. It is thus observed that the court found goods, wares, and merchandise to be in possession of the bankrupts, and, in effect, rendered judgment for their value, and ordered the commitment of the bankrupts until the amount should be paid. We are of the opinion that the order cannot be sustained. If the bankrupts had in their possession merchandise, which should have been delivered to the trustee, the appropriate order would have been for the delivery of merchandise. If they had money, which formed part of their estate, they should have been required to pay over money.

It should be borne in mind that the proceeding before us is not a plenary suit in equity, in which the court 'may adapt its decrees to all the varieties of circumstances which may arise, and may vary, qualify, restrain, and model the remedy so as to suit it to mutual and adverse claims, controlling equities, and the real and substantial rights of all the parties.' 5 Enc.Pl.& Pr. 958. Nor is it such a suit at law in which the parties may, by appropriate action, recover specific property or its value. But the present proceeding is one of a summary nature, and is invoked for the purpose of bringing within the reach and control of the bankruptcy court specific property found to be in the possession of the bankrupt and by him unlawfully withheld. The order should describe the property with reasonable certainty in order to assure its identity, and the command of the court to the bankrupt should be to surrender the very property sought to be recovered. In such cases the order to delivery should be based upon clear and convincing proof that the party charged has possession and...