United States v. Vanderberg, 15385.

• Decision Date: 07 March 1966
• Docket Number: No. 15385.,15385.
• Citation: 358 F.2d 6
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lester VANDERBERG, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

358 F.2d 6 (1966)

UNITED STATES of America, Plaintiff-Appellee, v. Lester VANDERBERG, Defendant-Appellant.

No. 15385.

United States Court of Appeals Seventh Circuit.

March 7, 1966.

E. Campion Kersten, Milwaukee, Wis., for appellant.

James B. Brennan, U. S. Atty., Thomas R. Jones, Asst. U. S. Atty., Milwaukee, Wis., William M. Coffey, Asst. U. S. Atty., Milwaukee, Wis., for appellee.

Before SCHNACKENBERG, CASTLE and SWYGERT, Circuit Judges.

CASTLE, Circuit Judge.

Lester Vanderberg, defendant-appellant, was tried to the court without a jury on an indictment charging him with violating 18 U.S.C.A. § 152. He was convicted on a count charging him with knowingly and fraudulently concealing an account receivable in the amount of $152.50, from the receiver, the trustee, and the creditors in the bankruptcy proceeding he initiated by filing a voluntary petition. Defendant was sentenced to 60 days imprisonment and fined $1000.

Defendant seeks reversal of his conviction on the basis of contentions that (1) absence of verification under oath from his voluntary bankruptcy petition is such a jurisdictional defect in his adjudication as a bankrupt as precludes his conviction for concealment of assets in a bankruptcy proceeding; (2) the evidence is insufficient to support the conviction; and (3) the indictment is invalid for failure to specify the manner of the alleged concealment. In the alternative the defendant urges that the sentence be reduced as excessive.

Bankruptcy petitions are required to be verified under oath. Section 18(c) of the Bankruptcy Act (11 U.S.C.A. § 41(c)). And, by virtue of subsection (f) of the same section, the filing of a voluntary petition operates as an adjudication of bankruptcy.

The defendant filed an original and an amended voluntary petition. Each petition on its face purported to be verified by him under oath but the notary who executed the jurats testified that in neither instance was the defendant put under oath. It appears from the notary's testimony that on both occasions the defendant was asked to read the petition and sign it if correct. Defendant acknowledged his signature before the notary but no oath was administered and he did not swear to or affirm the contents of the petitions.

The defendant asserts that under the provisions of Section 18(f) a voluntary petition verified under oath is necessary to effect the adjudication of bankruptcy and that an adjudication is a prerequisite element of the offense defined in 18 U.S.C.A. § 152, with which the defendant was charged and stands convicted. But verification of a bankruptcy petition is not jurisdictional in the strict sense. This was recognized in In re Royal Circle of Friends Bldg. Corporation, 7 Cir., 159 F.2d 539, 541, which involved a direct attack upon an order approving a Chapter X (11 U.S.C.A. § 501 et seq.) petition, and in which it was held that absence of verification is a defect which is subject to waiver by the party for whose benefit the verification is required, or to being cured by amendment. And it is the non-jurisdictional character of the defect of lack of verification which precludes it from affording a basis for a collateral attack on the adjudication of bankruptcy in a criminal prosecution for the concealment of assets. Gilbertson v. United States, 7 Cir., 168 F. 672, 674; United States v. Kramer, 3 Cir., 279 F.2d 754, 757, 83 A.L.R.2d 698.

Gilbertson was a prosecution for concealing assets from the trustee in a voluntary bankruptcy proceeding. On appeal from the conviction it was contended that the order of adjudication was invalid because of a defect in the order referring the petition to the referee for adjudication, a procedure for adjudication under the then existing law. This Court recognized that without an adjudication of bankruptcy the conviction could not be upheld but went on to state (168 F. 672, 674) that:

"We are of opinion that such adjudication in bankruptcy is not open to this collateral attack to impeach its validity. The jurisdiction of the District Court, under the bankruptcy act, is completely established in voluntary cases, when the prescribed `debtor\'s petition\' is filed stating cause for adjudication within the act. * * *

So the District Court acquired jurisdiction of person and subject-matter for all the proceedings in evidence, on the filing of the petition by the plaintiff in error. Having such cognizance for all purposes of adjudication, the subsequent proceedings were clearly within the bankruptcy jurisdiction of that court. * * * Hence the reference to and adjudication by the referee in the case at bar, however erroneous and avoidable on review, are neither void, nor subject to collateral attack, for contradiction or impeachment of the record."

Kramer was a prosecution for concealing assets of a bankrupt estate from the receiver in an involuntary bankruptcy proceeding. The defendant was convicted and on appeal contended that the conviction should be reversed because although the petition on its face purported to be verified before a notary public the petitioning creditors had not, in fact, subscribed to the petition before the notary. The Court, in affirming the conviction, held (279 F.2d 754, 757):

"In making this contention Kramer attempts a collateral attack on the jurisdiction of the bankruptcy court over the subject matter of the suit. The decisions hold unequivocally that such an attack may not be countenanced in any case against the bankrupt, even in a criminal proceeding, where the indictment has charged the bankrupt with a violation of the Bankruptcy Act. Fairbanks Steam Shovel Co. v. Wills, 1916, 240 U.S. 642, 649, 36 S.Ct. 466, 60 L.Ed. 841; Cajiafas v. United States, 6 Cir., 1930, 38 F.2d 3; Edelstein v. United States, 8 Cir., 1906, 149 F. 636, 9 L.R.A.,N.S., 236; and United States v. Freed, C.C.S.D.N.Y. 1910, 179 F. 236."

In our opinion an adjudication in bankruptcy is presumed to be regular and valid (Edelstein v. United States, 8 Cir., 149 F. 636, 9 L.R.A.,N.S., 236) and, although it may be shown to be invalid in a direct proceeding for that purpose, it may not be attacked collaterally in a criminal proceeding where, as here, the record of adjudication shows upon its face a duly executed, verified, and filed voluntary petition.

It is the non-jurisdictional nature of the defect here involved which precludes its successful assertion by way of collateral attack on the adjudication of bankruptcy with a resultant bar to or upsetting of a conviction for concealment of assets. It is not, as defendant urges, an invocation of the doctrine of "waiver" (which...