No. 24 | 2d Cir. | Nov 11, 1912
Max Weber was a director of the bankrupt corporation, and with two other members of his family, also directors, had the entire control of its affairs. On January 29, 1910, the trustee filed a petition, averring that a large amount of assets, which had been in the control of these directors, had disappeared, and was not accounted for by them. This petition prayed for an order directing the three Webers to deliver over to the trustee a “sum of upwards of $35,000 which may be found by this court to he held by the said directors and belonging to this estate in bankruptcy.” Hearings were had upon this petition before the referee, which Max Weber attended, and testimony was taken. The result was the making of an order by the referee on August 28, 1911. It recited the hearings and the filing of the petition, of affidavits, and of the testimony taken. Thereupon it found that Max Weber had concealed and was still concealing from the trustee the sum of $10,000, and ordered him to pay over that sum to the trustee within five days after service of the order upon him. This order was served on Max Weber on October 20, 1911. No attempt to review such order by application to the District Judge was ever made, nor was any extension of time to do so ever granted.
Application was therefore made to the court, upon a certificate of the referee that Weber had failed to obey the order of August 28, 1911, for an order adjudging him in contempt, and for such other and further relief as might to the court seem proper in the premises. The motion came duly on for hearing, was heard, decided adversely
We think the conclusion of the.District Judge was correct. It was in strict conformity with the opinion of this court in the Matter of Stavrahn, 174 Fed. 330, 98 C. C. A. 202, 20 Ann. Cas. 888. The petitioner had full opportunity before the referee to put in any proofs he might wish to as to whether or not he was then concealing the $10,000. Testimony was taken, and upon it the referee found that on August 28, 1911, he was concealing that sum. He made no opposition to this finding, did not seek to review it in any way, nor has he asked for a reopening on the strength of new evidence or for any other reason. Surely there was nothing for the District Judge to do, except to assume that such finding was correct. It established prima facie that Weber had at one time $10,000, which he was secreting from the estate; and his bare denial, without corroborative proof, was insufficient to overcome such prima facie case.
Upon the application to punish for contempt he made no explanation as to how or why it was that this particular sum had disappeared, merely denying that he ever had it. His statement that he had no money when the proceeding for contempt was instituted, without some such explanation, was insufficient, and the judge quite properly held him on contempt for not paying it over. To excuse disobedience of the order by such general denial would make it easy to evade the requirements of the bankrupt act.
If he has been misadvised, and finds himself for that reason in the position of being punished for not doing what it was impossible to do, presumably, upon an application to purge himself of the contempt, he would be allowed to submit evidence to show facts exonerating him, which he has heretofore failed to do.