In re Carley

106 F. 862, 1901 U.S. Dist. LEXIS 355
CourtDistrict Court, D. Kentucky
DecidedFebruary 23, 1901
StatusPublished
Cited by7 cases

This text of 106 F. 862 (In re Carley) is published on Counsel Stack Legal Research, covering District Court, D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Carley, 106 F. 862, 1901 U.S. Dist. LEXIS 355 (kyd 1901).

Opinion

EVANS, District Judge.

Some months ago Francis D. Carley was . adjudicated a bankrupt by the United States district court for the [863]*863disb-iot of New Jersey, and under section 21a of the bankrupt act certain of Ms creditors have obtained an order for the examination of William E. Chess in this district “concerning the acts, conduct or property of the bankrupt.” A commission for that purpose was in process of execution before the Honorable Emmet Field, judge of Cm Jefferson 'circuit court, in this district; and the clerk of this '■oad, pursuant to sections 8(58 and 869 of the Revised Statutes of the Coiicd States, had issued a subpoena requiring the attendance of the said Chess, and had, under the orders of the court, annexed thereto a, requirement that he bring with Mm certain papers. During his examination under Ms attendance thus required, the witness refused to answer certain questions, and was ruled by an order of this court to show cause why he refused to answer the same or to give the information required in response thereto; the language of the rule in this connection being that he should show cause why he refused to answer certain questions, to wit:

“Q. Bid you put in a single dollar into tlie firm then? And also: Q. As a matter of fact, you did not put in a single dollar then, did you? Also, in tlmt you refuse to produce certain documents, to wit, a certain certificate for 900 shares of the capital stock of the Francis I). Carley & Go., a certain power ol' attorney alleged to have been given to the bankrupt, and a certain agreement between himself and 31. G. C. Carley, the bankrupt’s wife, all of which more fully appears by the affidavit annexed hereto.”

To this rule the witness has filed a response showing cause, and the court is to consider whether the response is sufficient.

Speaking generally, I think the provisions of section 21a of the bankrupt act should be liberally construed, so as to enforce full and frank answers by witnesses who are being examined under its provisions as to the “acts, conduct or property of the bankrupt”; the object being to secure information on those subjects for use in the administra Í ion of the bankrupt’s estate. The statute was intended for beneficial purposes, and, in order to effect them, witnesses should fully disclose all their knowledge relative either to the acts, the conduct, or the property of the bankrupt. But the act does not demand such liberality of construction when it is sought to inquire into the acts, conduct, or property of any person other than the bankrupt himself. Indeed, the act does not authorize, in this mode of proceeding, any examination whalever into matters other than those specifically mentioned, which might, however, include cases where the acts, conduct, or property of the witness are so connected or interwoven witli those of the bankrupt as to make them virtually the same, by reason of community of interest. The court of bankruptcy itself would have no jurisdiction under this form of proceeding otherwise to inquire into the acts, conduct, or property of any other person except the bankrupt; and this court, which is merely acting in aid of the bankrupt court in which the proceeding is pending, can have no more jurisdiction than that court. Nor can the jurisdiction or power of this court be expanded or influenced by the suspicions or beliefs of any agent or attorney of the creditors of the bankrupt as to what the witness might prove, or what the facts might be in respect to outside matters. The inquiry addressed to the witness must relate to the [864]*864“acts, conduct or property of tlie bankrupt,” as I have explained, in order to give this court any jurisdiction to compel answers to inquiries made' of him. The trustee or creditors have the right, under the statute, by this inquisitorial proceeding, to acquire information as to the bankrupt’s affairs; but they have not, and should not have, any such right as to the affairs of outside persons.

With the expression of these general views, we come to consider whether this witness was required to answer the questions actually propounded to him. The first two are in these words: First, “Did you put in a single dollar into the firm then?” and the second, “As a matter of fact, you did not put in a single dollar then, did you?” It is entirely manifest from reading them that these two questions relate exclusively and altogether to acts, not of the bankrupt, but of the witness alone; and there is no reason why he should have answered either of them, unless he chose voluntarily to do so, and the court has no authority in this proceeding to compel him to answer either of those questions.

Tlie third clause of the rule required the witness to show cause why he refused to produce a certain certificate for 990 shares of the capital stock of the Francis D. Oarley Company. To this the respondent showed cause in these words:

to the certificate for 990 shares of capital stock of Francis D. Oarley & Company, incorporated, respondent says that there is such a certificate, though the same is not now in the possession of respondent, and he says that the bankrupt, Francis D. Oarley, owned no part of the capital stock of the corporation óf Francis D. Oarley & Company, and has no interest whatever in said certificate for 990 shares, which is respondent’s private property; and creditors of the bankrupt have no right to the possession thereof, or to inspect the same.”

Evidence upon this point may possibly refer to some act or conduct of the bankrupt, and, without knowing definitely what the issues are which are involved in the hearing before the court in which the bankruptcy proceedings are pending, I see no reason why ’the witness shall not make substantially the same statement in his deposition, and I think he should at least do that.

The fourth clause of the rule required the witness to show cause why he refused to produce certain powers of attorney alleged to have been given to the bankrupt. The witness, in his response, showed cause as to this in the following language:

“As to certain powers of attorney, or any powers of attorney, from respondent to tlie bankrupt, Francis D. Oarley, referred to in the rule herein and in the affidavit as a basis therefor, respondent says he has not in his possession or under his control any power of attorney ever given by him to the bankrupt, nor has he any copy of any power of attorney, except one authorizing the bankrupt to vote his (respondent’s) stock in the Francis D. Carley & Company corporation at a special meeting to be held in Jersey City, New Jersey, on September 1, 1900, for the purpose of electing officers.”

Possibly the testimony sought upon this proposition may relate to the acts of the bankrupt, and I see no reason why at least the statements made in the response may not be made by the witness in his examination; nor do I see any reason why a copy of the power of attorney authorizing the bankrupt to vote witness’ stock in the Francis [865]*865D. Carley Company at a special meeting to be held in Jersey City on September 1, 1900, for the purpose of electing officers, or a copy of that copy, may not be filed as a part of the deposition of the witness. As I have stated, this may relate to the acts or conduct of the bankrupt himself in some way, which, with the imperfect light before me, may have some bearing upon the issues in the bankruptcy proceedings in Kew Jersey.

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Bluebook (online)
106 F. 862, 1901 U.S. Dist. LEXIS 355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-carley-kyd-1901.