In re Chavkin

249 F. 342, 161 C.C.A. 350, 1918 U.S. App. LEXIS 2214

• Court: Court of Appeals for the Second Circuit
• Decided: January 16, 1918
• Docket: No. 93
• Status: Published

Opinion

HOUGH, Circuit Judge

(after stating the facts as above). This cause having been brought before us by petition to revise, our duties are limited to inquiring whether any error of law was committed below. There are but two points to be considered, viz. petitioner’s assertions (1) that it was error to admit in evidence the financial statement above referred to, and (2) that there was no evidence upon which the court could ground the order complained of.

[1] 1. That a statement of this kind is competent, and may be persuasive evidence, against a bankrupt in proceedings of this nature, was specifically held in Re Loeb, 232 Fed. 601, 146 C. C. A. 559. The use in what are commonly known as “turn-over proceedings” of these “financial statements” has long been common and well known. They are not conclusive, but it is difficult for us to understand how anything can be more persuasive, as against the person making it, than, a solemn statement of financial worth made to induce credit.

[2] 2. It seems to be thought by the petitioners that, because all the bankrupts, except Joseph Chavkin, swore that their business duties gave them no acquaintance ■ whatever with the firm’s financial condition, and Joseph himself, when called as a witness in this proceeding, refused to answer substantially every question put to him on the ground that such answer might incriminate or degrade him, therefore there was no evidence, other than said financial statement, upon which to ground the order complained of.

Without expressing any opinion on the probative value of the testimony or affidavits of a man who even declined to recognize his signature to the schedules in bankruptcy (on the ground above stated), we find in the record evidence obtained upon examination under section 21a and largely from the sister bookkeeper, of the substantial correctness of said financial statement. At all events there was certainly some evidence, and its comparative value is not for us to decide. There was jurisdiction in the court to make the order. In re Schlesinger, 102 Fed. 117, 42 C. C. A. 207. The trustee lays a foundation when he shows by any competent evidence, including the claims or assertions of the bankrupts themselves, that they had unscheduled property a reasonable time before petition filed; the bankrupt must then account for said property, or otherwise rebut Jhe trustee’s prima facie case by credible testimony. In re Weinreb, 146 Fed. 243, 76 C. C. A. 609; In re D. Levy & Co., 142 Fed. 442, 73 C. C. A. 558; In re Graning, 229 Fed. 370, 143 C. C. A. 490, Ann. Cas. 1917B, 1094.

[3] These bankrupts seem to have made no attempt to comply with this rule; but, assuming that there was conflicting evidence presented to the court, the question thereby presented was of fact, and not reviewable in a proceeding of this nature.

It may be added that petitioners seem to think that this is a contempt proceeding, because in the same order which directed the payment of money to the trustee the bankrupts were called on to show cause why they should not be punished for contempt, if they did not make the required payment. Such, however, is not the case. There has been no punishment for contempt, and no order adjudging contempt. We have nothing before us but the legal propriety of the “turn-over” order.

Order-affirmed, with costs.