Sheinman v. Chalmers

• Decision Date: 25 June 1929
• Docket Number: No. 4014.,4014.
• Citation: 33 F.2d 902
• Parties: SHEINMAN v. CHALMERS.
• Court: U.S. Court of Appeals — Third Circuit

33 F.2d 902 (1929)

SHEINMAN v. CHALMERS.

No. 4014.

Circuit Court of Appeals, Third Circuit.

June 25, 1929.

Samuel J. Gottesfeld and Harry Shapiro, both of Philadelphia, Pa., for appellant.

J. Howard Reber, James McMullan, and Reber, Granger & Montgomery, all of Philadelphia, Pa., for appellee.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

WOOLLEY, Circuit Judge.

The trustee filed a petition with the referee averring that the bankrupt had concealed and withheld assets of the estate and praying that he be ordered to turn over to him cash in the amount of $54,328.21 and merchandise of the value of $64,251.29. The referee made an order directing the bankrupt to turn over $32,751.17 in cash and also merchandise worth $34,447.64. After the order had been reviewed and approved by the District Court the bankrupt came here on appeal with a record of but seven of the more than 600 pages of testimony that had been taken before the referee (on which, after the trustee had suggested a diminution of the record, he elected to stand) assigning error particularly with reference to the disallowance of two claimed credits, one of $3,825 and the other of $5,000, and error generally in a wrong principle of computation and faulty consideration of the testimony as disclosed by expressions in the referee's report and the judge's opinion which he says (and on which alone he relies) show their own error and contain their own refutation.

As it is impossible to look through and beyond the referee's report and the judge's opinion with reference to the two credits disallowed and discover precisely the evidence on which they based their discussions and grounded their decisions, we can only say that, reading the short record and accepting, as we must, the referee's story of the case as accurately reflecting the evidence, there is enough to sustain his finding and the court's decree on these two items within the rules of Oriel et al. v. Russell, 278 U. S. 358, 49 S. Ct. 173, 73 L. Ed. ___, which define the character of evidence and caution the conscience of the judge in proceedings of this kind.

In regard to the merchandise account, it should be observed that the bankrupt did not turn over to the trustee any inventory, nor could one be found among his very imperfectly kept books and papers. Suspecting that the bankrupt had made away with assets, the trustee employed an accountant to construct an inventory, if that were possible; but to make one as of the date of bankruptcy the accountant, very naturally, required a starting point sometime back, which the trustee supplied him in the form of a financial statement which the bankrupt had, on December 1, 1921, furnished one of his creditors as a basis of credit. This showed merchandise then on hand amounting to $67,038.09 as against merchandise on hand June 2, 1922, the date of bankruptcy, of $15,495.94. The accountant produced an inventory of merchandise which the bankrupt should have had on the date of bankruptcy by taking the bankrupt's own inventory figures in his financial statement of December 1, 1921 and adding purchases and subtracting sales down to the date of bankruptcy, all figured at cost. This showed merchandise which he should have had at bankruptcy of the value of $79,747.23, from which the accountant deducted $15,495.94, the value of merchandise actually on hand, thus disclosing a shortage of $64,251.29. Adopting the figures of the trustee's accountant, the referee then gave the bankrupt the benefit of all credits that his books showed and substantially all he claimed except in one particular. In order to supply the referee with all available data in arriving at a correct figure the trustee,...