In re E. Dier & Co.

279 F. 274, 1922 U.S. Dist. LEXIS 870

• Court: District Court, S.D. New York
• Decided: February 27, 1922
• Status: Published

Opinion

EEARNED HAND, District Judge

(after stating the facts as ahove). It may be accepted that Judge Holt’s ruling in Re Harris (D. C.) 164 Fed. 293, had the approval of the Supreme Court in the appeal in that case. In re-Harris, 221 U. S. 274, 31 Sup. Ct. 557, 55 L. Ed. 752. There the alleged bankrupt resisted the surrender of . his books to the receiver and was eventually protected to the extent that, though he must surrender, it wa.s on condition that the books- should not be used by the receiver in aid of any criminal prosecution against him. Thus a compromise was effected betwe'en the right of his creditors to administer his assets and his own right not to produce evidence against himself.

In Johnson v. U. S., 228 U. S. 457, 33 Sup. Ct. 572, 57 L. Ed. 919, 47 L. R. A. (N. S.) 263, the bankrupt had without reservation surrendered his books to a trustee, and these were thereafter used against him in a criminal trial over his objection. The point involving his constitutional privilege went to the Supreme Court and was ruled against him. The theory of tlife case was that, once possession and title passed without protest from the bankrupt, his privilege ended. “A party is privileged from producing the evidence, but not from its production.” 228 U. S. 458, 33 Sup. Ct. 572, 57 L. Ed. 919, 47 L. R. A. (N. S.) 263. In the case at bar there is indeed no trustee, only a receiver, and a receiver has no title; but that, I conceive, makes no difference. The production depends as little upon compelling the incriminated person to produce evidence against himself, when the possessor has no title, as when he has. The possessor alone can produce, not the owner, and the privilege protects only against such compulsion. See, also, In re Tracy & Co. (D. C.) 177 Fed. 532, and In re Mandel (D. C.) 224 Fed. 642. The test I take is whether the surrender was resisted when the receiver demanded possession.

Cases like Boyd v. U. S., 116 U. S. 616, 6 Sup. Ct. 524, 29 L. Ed. 746, Weeks v. U. S., 232 U. S. 383, 34 Sup. Ct. 341, 58 L. Ed. 652, L. R. A. 1915B, 834, Ann. Cas. 1915C, 1177, and Silverthorne Lumber Co. v. U. S., 251 U. S. 385, 40 Sup. Ct. 182, 64 L. Ed. 319, are not in point. In each the possessor of the evidence was forced to produce by illegal means, and this was held to taint, as it were, the evidence, so that not even information might be used, which was derived during the unlawful possession. Gouled v. U. S., 255 U. S. 298, 41 Sup. Ct. 261, 65 L. Ed. 647, extended the rule to evidence procured by fraud. None of them touches the competency of proof which has been surrendered without claim of privilege, made at the time when the privilege could have been effectively asserted.

Nor is Arndstein v. McCarthy, 254 U. S. 71, 41 Sup. Ct. 26; 65 L. Ed. 138, nearer. That case decided that the declarations contained in schedules did not open the door to examination generally of the bankrupt’s assets. It would apply only in case the alleged bankrupts here were examined upon the transactions contained in the books and papers. No one suggested that the schedules themselves were privileged in favor of the bankrupts. Had that been the ruling, as, for example, it was before the repeal of R. S. § 860 (Johnson v. United States, 163 Fed. 30, 89 C. C. A. 508, 18 L. R. A._ [N. S.] 1194), something might be said in the case at bar for the privilege, not under the Constitution-, it is true, but under the statute. Nothing of the sort now stands in the way; certainly not Arndstein v. McCarthy, supra.

Rule discharged.