235 F. 706 | 9th Cir. | 1916
(after stating the facts as above). The record discloses a careful analysis and review of the facts by the learned judge of the District Court. His findings were made upon evidence which he characterizes in his opinion as “clear and convincing,” and which satisfied him beyond all reasonable doubt that when the petition in bankruptcy was filed and at the time of his decision the bankrupts were in possession and control of the merchandise described in the order.
Petitioners’ principal point is that the court erred, in finding that the bankrupts had a present possession and a present ability to surrender and deliver to the trustee. The contention is that such a finding is not material or proper, and that the question of present ability becomes material only in a contempt proceeding arising after failure to obey the order to deliver. Petitioners urge the importance of the point because, in Power v. Fuhrman, 220 Fed. 787, 136 C. C. A. 393, which was a contempt proceeding, this court held that a judgment of the District Court, not appealed from, which ordered the bankrupt to turn over, and which was based upon a finding that there was a present ability to perform, established that at the date of entry of the order the money there in question was in the actual possession and under the control of the bankrupt, and was then being fraudulently con
Petitioners cite Schmid v. Rosenthal, 230 Fed. 818, — C. C. A. —, where the Court of Appeals of the Third Circuit had before it for review a finding made by the referee in the District Court that the bankrupt “had and now has in his possession,” and an order to pay over forthwith. The court distinguished that proceeding, which was one asking for an order requiring money alleged to be concealed to be turned over, from a proceeding to punish for contempt, and said:
“Nothing has been done thus far except to ascertain what sum of money the bankrupt should have accounted for at the time of the adjudication, and should have turned over to his trustee afterward. * * * The finding should have been restricted to the date of bankruptcy, and should therefore be modified by striking out the words, ‘And now has in his possession,’ and by substituting therefor the words ‘At the time the petition in bankruptcy was filed.’ ”
The court, approving Epstein v. Steinfeld, 210 Fed. 236, 127 C. C. A. 426, recognized two stages to a proceeding where a charge is that assets have not been accounted for: One as involving inquiry into what assets should have been in the bankrupt’s possession or control at the time of the bankruptcy; and the other involving a determination whether or^not the property required is still in the possession or control of the bankrupt, and whether he is physically able to deliver it to his trustee. ' We agree that the proceeding may have tire two stages, but if the two are covered by the one investigation and such inquiry has fairly responded to the averments of the petition by the trustee that there is a present possession and control, we see no valid reason for holding that as matter of law the findings and order responsive to the issues tried should be nullified. In re Rosser, 101 Fed. 562, 41 C. C. A. 497; In re Lans, 158 Fed. 610, 85 C. C. A. 432. It may be that inconvenience to the bankrupts will follow in the event of their failure to comply with the order, but we find no sufficient legal ground for disturbing the order in the respect complained of.
Petition dismissed.