Document: 333 U.S. 56 68 S.Ct. 401 92 L.Ed. 476 MAGGIOv.ZEITZ. In re LUMA CAMERA SERVICE, Inc. No. 38. Submitted Oct. 13, 1947. Decided Feb. 9, 1948. [Syllabus from pages 56-58 intentionally omitted] Mr. Max Schwartz, of Brooklyn, N.Y., for petitioner. Joseph Glass, New York City, respondent. Justice JACKSON delivered the opinion Court. 1 Maggio, petitioner, was president and manager Luma Camera Service, Inc., which adjudged bankrupt on April 23, 1942. January 1943 trustee asked court to direct Maggio turn over a considerable amount merchandise alleged have been taken concern in 1941, still Maggio's possession or control. After hearing, referee found that 'the established by clear convincing evidence hereinafter described, belonging estate bankrupt, knowingly fraudulently concealed respondent (Maggio) herein said is now under control respondent.' A turnover order issued affirmed District Court then unanimously Circuit Appeals, Second Circuit, without other than citation its own prior cases. Zeitz v. 2 Cir., 145 F.2d 241. Petition certiorari denied this 324 841, 65 587, 89 1403. As failed property proceeds, Referee him contempt. ordered be jailed until he complied further court. Again Appeals affirmed. 157 951, 955. 3 But affirming said: 'Although we know cannot comply with order, must keep straight face pretend can, thus affirm orders first 'to do an impossibility, punish refusal perform it." Whether read literally as deliberate judgment law case something decoy intended attract our attention problem, declaration one Court, view supervisory power courts bankruptcy, ignore. Fraudulent bankruptcies probably present more difficulties they elsewhere. These conditions are reflected conflicting views within need not detail already set out books: Schoenberg, 70 321; Danish Sofranski, 93 424; Pinsky-Lapin & Co., 98 776; Seligson Goldsmith, 128 977; Rosenblum Marinello, 133 674; Robbins Gottbetter, 134 843; Cohen Jeskowitz, 144 39; 4 The problem illustrated case. below says proceedings it sufficiently that, towards end shortage occurred bankrupt's stock merchandise. It seems also regard proved personally took corporation's vanishing assets. abstraction several months before bankruptcy year applied for. only goods were proof his time supplemented 'presumption' absence credible explanation disposition goods, continues them their proceeds. Because felt constrained opinions adhere 'fiction' order. Now convinced reality did retain proceeds up unjust. considers res judicata injustice beyond reach review contempt 5 proceeding leads commitment consists two separate stages easily become out-of-joint because defense second often substance effort relitigate, perhaps another judge, issue supposed settle first, while burden rests trustee, frequently facts entirely i § adversary, who advantaged nondisclosure. these but interdependent procedures important successful administration, restate some principles applicable each, conscious however risk may stir new old controversies. I. 6 procedure expressly created regulated Bankruptcy Act. judicial innovation seeks efficiently expeditiously accomplish ends prescribed statute, which, however, left means largely ingenuity. 7 invested 'with such jurisdiction at equity will enable them' 'cause estates bankrupts collected, reduced money distributed, determine controversies relation thereto * *.' Title 11 U.S.C. 11(a)(7), U.S.C.A. 11, sub. a(7), function 'collect reduce estates' laid upon trustee. 75(a)(1), 75, a(1). correlative duty imposed fully effectually all interests, corporation officers, directors stockholders. 25, 25. 8 To compel persons discharge duty, statute imposes criminal sanctions. denounces comprehensive list frauds, concealments, falsifications, mutilation records acts would defeat obstruct collection assets estate, prescribes heavy penalties fine imprisonment both. 52(b), 52, b. confers arraign, try violations, 'in accordance laws procedure' regulating trials crimes. 11(a)(4), (4). And specifically provides jury trial offenses against 42(c), 42, c. Special provisions made induce vigilance prosecuting offenses. report any probable grounds believing offense has committed United States Attorney, thereupon required investigate referee. proper directed matter grand delay, if thinks Attorney General abide instructions. 52(e), e. 9 Courts no authority compensate englect lack zeal applying sanctions perversion civil remedies punishment, judges suggest being done. 10 Unfortunately, prosecutions recover treasure. well commanded collect property. Act vests title including transferred fraud creditors, date filing petition 110, puts position pursue plenary summary obtain possession. entertain petitions vested 'jurisdiction equity' between trustees adverse claimants concerning acquired claimed 46, given wide discretionary Act, words 'make orders, process, enter judgments, addition those provided for, necessary enforcement title.' 11(a)(15), a(15). 12 grants power, hav fashioned administration. enables summarily retrieve diverted secreted books account withholding pending outcome suits, intolerably delay When supported 'clear evidence,' sustained appropriate step enforcing Oriel Russell, 278 358, 49 173, 73 419; Cooper Dasher, 290 106, 54 6, 78 203. See Farmers' Mechanics' National Bank Wilkinson, 266 503, 45 144, 69 408. 13 primarily get rather debtor. Without pushing analogy too far, theoretical basis remedy common actions possession—detinue unlawful detention chattels replevin taking—as distinguished trespass trover damages value Of course modern does exactly follow ancient overlapping procedures, object specific property—is same. extend disposed of, identified such. essentially restitution indemnification, characteristics rem; primary condition relief existing capable surrendered person so. sense based cause action tortious conduct embezzlement, misappropriation improvident dissipation 14 nature derivation make when satisfactorily establishes existence thereof defendant proceeding. While inquiry directed, consider resort particular if, instituted, dissipated, occurred. Conduct put limited crime, or, violates referee, contempt, acts, reprehensible, warrant issuance creates impossible performance, so punishment can follow. should necessry say flagrant abuse process exert pressure friends relatives ransom accused party jailed. II. 15 evident real concerns how meet it. This 174, 419, includes abstracted proceeded against. produce evidence, difficult task be. 16 usually show missing bankruptcy. bring past down involved proceedings, allowed benefit what called presumption possessor explains ceased. inference, might permissible cases, seem settled into rigid lower apply reasonableness 17 However, presumption, fiction, statute. None decision dealing procedure.1 Language course, gleaned pronouncements texts once presumed continue shown changed. generalizations, useful enough, perhaps, solving case, rules reason. 18 Since either law, conclusive disputable, forbid dispense consideration testimony, issued, approved appeal, merely party, unless element factors fair reasonable inference.2 Under circumstances permissible, resolving unknown known, conclusion previous Such sometimes characterized 'presumption fact,' is, nothing reasoning fact another, argument infers otherwise doubtful proved. 19 man had item circumstance weighed determining whether properly later date. inference yesterday's thing, twenty ago quite another. With kind deal? Was salable consumable? continued warranted consumable marketable, inappropriate same perishable demand. thing thrifty withdraws savings after accident, apparent purpose except tort creditor, see very different wares sold fast-living adventurer using difference income outgo. 20 Turnover thought arise isolated circumstances, possession, reviewing finds whole record unrealistic No rule requires fettered; nor ever prescribed. deference due court's findings fact, rules, even presupposes trier actually exercising judgment, law. event, inferences aid reason, override there appear reason allowing presumptio 21 We aware generalities little solve concrete issues. latter resolved sound good courts, mindful responsible final adjudication ability deliver, questionable experiment coercion recoil discredit proves abandon enforcement. III. 22 Unlike judicially developed disobedience lawful authorized distinct kinds. 'enforce obedience imprisonment, imprisonment.' 11(a)(13), a(13). coerce obedience, us. There provision whose penalize contumacy, 'punish contempts referees.' 11(a)(16), a(16). referees defined include resistance Judge who, 'is doing,' commit conditions. 69, 69. 23 us sought coercive sanction. 'until shall aforesaid order.' 'shall purged himself complying court.' Thus whatever disobedience, every penalty contingent failure obey. decisive characteristic truly purposes, said, leaves contemnor 'carry key prison pocket.' Penfield Co. Securities Exchange Commission, 330 585, 67 918. 363, 419. What say, therefore, designed solely vindication flouted authority, such, example, sentence destroying mutilating over. 24 question arises whether, proceeding, inquire justification itself. and, completed terminated becomes subject collateral attack proceedings. long think, rightly. 25 increasingly resorted to, especially statute,3 performance duties sanction disservice depart long-standing open reconsideration legal factual disobeyed retrial original controversy. enforce commanding forbidding act inconclusive foster experimentation disobedience. Every precaution issue, appears obd ience coerced final, justified re-trying issues place. Mine Workers America, 258, 259, 677; Counsel recognize rule, based. could learn going outside former available application earlier 26 therefore think right insofar concluded attack, infirmities relitigated corrected subsequent IV. 27 mean 'must it."? 28 statement knows record, stop inquire. regarded them, raising questions solved careful analysis expect take place courts. advantage having parties witnesses instead judging cold considerable. each circuit closer familiarity capabilities, tendencies, practices Judge. Both better fruits actual practice we. Consequently, loath venture where carries approval Appeals. 29 However relying finding raise wilful continuing commitment, though rejected judgment. protests continuance unrealistic, extending although persuaded overcome rebuttable. 30 begin acceptance makes whereabouts affirmed, declared possess. elapsed initiation He tender earnings November 1944; unemployment allegedly failing hel th; family obligations manner living during intervening period. sworn neither since possessed personal used satisfy trustee's demands. repeats denial possesses question. 31 attached significance gave indication incredible. cites Siegler, 972, reversed believed refused Siegler cases decided apparently led conclude 32 Nor reject view. Indeed considered inability relevance irrebuttable fact. stands indefinitely, permanently, affirmatively shows believe despite statements opinion, construed compelling affirmance decree. 33 'a motion obey receiver treated mere administer seizure distribution. punitive, punishment—they administrative coercive, compel, reluctance duty.' page 34 jail omitting powerless reverse principle purely describe charitably. At time, add estate. That contemplated result language borrowed pointing confinement 'Where failed, interval supplied defect certain before, namely always released, I hardly released soon obey.'4 Moreover, authorities relied Chief Taft's opinion5 contemplate incapacity comply.6 Indeed, quotation Epstein, cited supra (note 4) stated: 'In other, assertion event *'7 35 source successive points time. impeached, avoided attacked command. institutes commit, tenders tried just entitled relevant adjudges inquiry, cut off nonpossession time? Thus, admissible attempt lay detailed subject. They formulated aspects problem. 36 Oriel's '* happened showing newly arisen part offer affirmative tend indicate never hence contradict agree speaks. confronted establishing thereby prima facie successfully comply. challenge prevent offers mute, issue. denials incredible context.8 37 permitted deny give events corroborate him. credibility light circumstances. everywhere admitted committed, held forever His credit demonstration period goods. shadow gates coupled type evd ence mentioned above, convince yield coercion. 38 obliged weigh facts, obeyed, constitutes defiance term break. 39 nowhere clearly expressed case:9 possibility, error hardship, conscience weighing perception consequences, together opportunity appeal review, taken, restrain recklessness rights hand flouting other. *' 40 balancing 'coercive methods foreshadowed.'10 Certainly considerations require conscientious stage, foreshadowed—it imminent. And, weighing, inevitable. V. 41 deal here wilful. appears, not, evaluate bound almost automatically precedents deliberately disobeying contention unable On jail. consistent immediate release. 42 misapprehension both adjudicate considering essential controlling vacate judgments remand Court's opinion. Manufacturers' Finance Company McKey, Trustee Bankruptcy, 294 442, 453, 55 444, 449, 79 982; Gerdes, Lustgarten, 321, 327, 107, 109, 309, cited.11 below. 43 Vacated remanded. 44 Separate BLACK, RUTLEDGE concurs. August 1943, petitioner (April 18, 1945) prove longer property, 46 Had charged embezzling doubtless argue doctrine barred introducing wrong, truth, on, 1945. One basic why embezzlement types proof' enough; second, 'proof doubt' required. heavier conviction embody not—it surrender similar delivery suit. 47 measurements cases; consequentially, identical. Fine, either. Here carried compelled remain convicted sentenced charge embezzlement. true correct (and it), keys pocket, freedom. crucial June 5, holding sufficient doubt 48 am unwilling results sending people measure substantially support rendition plaintiff promissory note, debt. All designated name, fine, sentences, both, my proof, roof doubt. Gompers States, 233 604, 610, 611, 693, 695, 58 1115; Michaelson 66, 67, 20, 162, A.L.R. 451; Pendergast 317 412, 417, 418, 63 268, 270, 87 368. foregoing written assumption turnover-contempt legal, accept. share unauthorized done here.1 flavors much discredited debts pay. For here, wrongfully dispose guilty ws liable sort action, basically obtained thrown effect pay debt embodied 50 Furthermore, rest evidential foundation firm enough shaky prison. Accepting finding, 1945 possible 1941 achieves procedural runs counter system laws. prosecution itself, relieve offering petitioner's guilt forfeiture liberty sought; threw proving innocence.2 51 reasons, among others, directions instituted 52 FRANKFURTER, dissenting. 53 rare find myself substantial agreement direction main conclusion. Too disentangle snarled skein thread principles. me snarl confusing involving litigants invited correction administration Circuit. review.1 precludes correction, whip devil round stump. precise simply stated. withheld cases,2 per curiam. case.3 three enforced day regardless elapsed. maintained them.4 Likewise, impotence change untenable Court.5 imprecating reversal invited.6 filed certiorari, denied.7 Then came us, sure, substantive implications. Reference e levant finality invested. unanimous bench, membership experience law,8 adjudicated relitigated. decide adjudicated—that over—is definitive starting point exact short, proceed go behind ignore Russell: 'Thereafter order.'9 today reaffirms Russell. inroad practical virtually identical record10 reverses Russell scope uncertain best understanding, undefined respect today's decision. 57 About ought dispute. agreed relitigate determination avoid 'can situation relieving compliance.'11 relieved obeying sustaining perform, questioning disputed. Again, rendered sent chooses command, kept keeping gives promise performance. pronounced.12 so, controverted adjudicated, reduces itself simple question: Where, justifiably disbelieve, met preclude contempt? 59 presented. else Frank's knew perform.13 'impossibility' derived derives familiar hostility deems unfairness ordering turnover.14 Frank like turned water dam utter contradictory things corners mouth. saying relitigated—that back over—but judicata. 60 reconcile yet meaning, namely, enumerated opinion15 introduced same, tht order.16 produced told over, unless, deemed infirmity seep, osmosis, entirety 61 acted impossibility notice imprisoning Appeal's denigrating order.17 declined became binding adjudication. Neither instant 972. surely reliance correctly If dicision preceded followed18 opinion.19 speculate propriety printed barren evidence. Presumably travel undisclosed private knowledge. recent years obvious observation animadversion Circuit's issuing orders. purport independent evaluation bearing large. Its justifiability 62 cure situation, regarding presumptions orders.20 dealt indirectly cost beclouding unhappy victim decisions appeals adjudications, ample remedies. futile, release through use habeas corpus, classic Holmes, 'cuts forms goes tissue structure. comes outside, subordination Mangum, 237 346, 582, 595, 969. hardship generating cloudiness indeterminate range social vital sturdy justice. How carry conveyed opinion? unquestioned respect, do, start able startingpoint again, found,21 presented exculpation disproves 1943. find, hold reasonably finding? Or infer got upset directly indulging benign winking verbally questioned, accept facts? drain significance, assert scratch? Why reaffirm order? confront district judge whom all, concerned States. 64 By abstaining expressing requisites disagree observations matter, future. From leaving day, occasion appropriate, explicitly govern courts.22 MAGGIO ZEITZ. APPENDIX TO OPINION OF J. 66 Comparison Zeutz Prela Hushman (companion Russell), 358 Indenties Differences Name bankrupt. Samuel (R. cover). Raymond Louis Hubshman 71 Type Photographic equipment Silk (R.1) 72 (R.2). Date proven Before Jan. 1, 1942 Nov. 74 (324 R.13). 75 Apr. 14, 22,1924 76 R. 4). 77 7, July 1925 (R.5) 8). Interval bank- 80 ruptcy Eight less. 81 82 Trustee's Examination Maffio's inven- manufacturedblouses 83 tories revealed discrepencies silk; blouse 1/2 84 sales yards examination 85 close last inventory Prela's 86 R.7). discrepency blouses manufactured silk 88 Bankrupt's reply 1. Inventory figures erroneous Assumption above proof. (unrecorded sales) erroneous-manufactured 90 5361),of 91 2. Denial (R.2,19). property.(Id. 62.) (Ibid.) 94 Assumptions 95 ruling correct. disbelieved. 96 841.111). (R.1,5.) 97 Aug. 9,1943 8, 1926(R.3) 99 dates less 100 101 Review Unanimously CCA opionion. 102 L. Hand, Swan, Clark, J.J., Hough, Mack L Cert. Feb.5, 103 1944 (145 241). J.J. Dec. 1926 1945,324 841. 104 (unreported)(R.15). 105 1944(R.3). Apr 22,1927(R.13) 106 forcon- 107 tempt citation. 108 order.2. Failure 109 (R.16.) (R.13,15.) 110 Did possessionon (a) Heart trouble Paralytic 111 Hasn't now. (R.15.) stroke (R.24). 112 3. Has physically incapacitated.(b) Wife sick, 113 (R.13,17.) (R.17.) too. (Ibid.,25.) 114 4. repeated Filed Affidavits 115 denial(R.13,17.) cutter, 116 salesman, 117 buyers 118 119 inques- 120 tion 121 122 (R.27,28,29). 123 District's 1.Trustee outprima non-compliance 124 2.Turnover collaterally providing 125 126 127 3.To inablilty 129 Bankrupt claim 130 131 (R.18,19) (R.48,52.) 132 5. Physical and/or wifeignored. 6. bare evi- tp turn- dence 135 disbelieved (R19). 136 137 138 139 140 excluded 141 stricken(R.33 142 -34,45-46,50,54). 143 April. 18,1945 Sept. 9,1927(R52) Certiorari 146 147 denied. sought. 148 Affirmed. L.Hand Manton Swan 149 F2d.951. F. 2d 413 J., (concurring 150 "With 1."A result). J.,dissenting 151 sustained, presents 152 necessarily followed." Citing faice contumacy 153 (at p. 954). punishment." 154 414). 155 Findings procedding 156 3."That say" Having 3(a). "Although "had true" 158 offender will- 159 full 160 "this fails order." (Ibid) 161 . showed can..." pp.954-5 162 aug. 163 deprived 164 way 165 166 order."(Ibid.) 167 4."As 4."No offered 168 169 170 entry bankrupt"(at 413). 171 172 wife 173 irrelevant. Supreme favor fictitious invoked. 954. Other circuits 'grows weaker passes, finally ceases exist' (C.C.A.8th Marin Ellis, 321) 'only strong permits' 'loses force intervenes proceeds' (C.C.A.4th Brune Fraidin, 325, 328. Comments U. Pa.L.Rev. 789 (1947) Ill.L.Rev. 396 (1947). examples statutory provisions, Interstate Commerce 12(3), 12(3); 1934, 78u(c), 78u(c); Public Utility Holding 1935, 79r(d), 79r(d); Communications 409(d), 409(d); Labor Relations 161(2), 161(2); Federal Trade Commission 49, 49; Administrative Procedure 1946, 1005(c), 1005(c); Atomic Energy 1816(d), 1816(d). 366, 175, quoting (cited Epstein Steinfeld), DC ., 206 568, 569. 364, late following nearly view,' Toplitz Walser, 196, 197, 'The sole presently previously accordingly, *'; Steinfeld, 210 236, delineates states comply; Schmid Rosenthal, 230 818, citing supra; Frederick Silverman, 250 reciting necessity Reardon Pensoneau, 244, insufficient establish ex rel. Paleais Moore, 852, 856, stating satisfied Frankel, D.C., 184 539, Drakeford Adams, Ga. 722, S.E. 833, State requiring 'clearly established'; Collier, (Gilbert's ed., 1927) 652. cumulative standing alone satisfied, it, comply, effect. See, American Trust Wallis, 464; Samel et al. Dodd, 68, 201 646, 761, 903; Nisenson, 182 912; Holden, 203 229, 229 621, 1049, 1355; McNaught, 225 511; Dittmar Michelson, 281 116; Davison, 673; Marks, 176 1018; Elias, 240 448; Freed Central Illinois, 215 873; Nevin, 601; Johnson Goldstein, 702; Magen, 469; Id., 288; Walt, 588; Clark Milens, 457; Berkhower Mielzner, 65, 279 848, 345, 992; Tabak al., 209; Weisberger, 258. (14th ed.) pp. 244—249; id. 535—542; Remington, (4th 624—681; C.J.S., 210; Am.Jur. 369, 752—753. Similarly, alimony (278 365, 419) illustrating 'much bankruptcy': Smiley Smiley, Wash. 577, P. 962, affidavit undenied, hele erroneous; Barton Barton, Kan. 727, 179, 180, justify cannot, Von Gerzabek, Cal.App. 230, 208 318, most effectual answer' order; Hurd Hurd, Minn. 443, N.W. 728; Heflebower Heflebower, Ohio St. 674, N.E. 455, Fowler Fowler, Okla. 280, 227, L.R.A.1917C, 89, defendant's inu fficient prevented commitment. conclusions laying 'more view.' note supra. Chicago, P., M. O.R. 451, 368 Cooke 267 517, 390, 767, charges, contempts. text, U.S., 407, Cf. Kay 303 10, 468, 473, 607; Prairie Farmer Publishing Indiana Farmer's etc., 299 156, 159, 135, 136, 93; Buzynski Luckenbach S.S. 277 226, 228, 440, 441, 860. 'We via substituted deprive constitutional right, jury. too, consequence fiction respondet twice punished offense, since, indicted violation b, serve defense. Congress intimated intention authorize results, stem judge-made gloss statute.' 953, 'Respondent accounting oath.' fact: '4. respondent, wholly explain satisfaction comply.' 843, 39. 977. 977, 978, 979; 844; 39, Frank, J.). Presumably, avowed free reflection binds House Lords precedents. attributable six sit en banc presumably deem undesirable majority panel panel. 40, 41. seek Court; Jeskowitz hint, certiorari. 323 787, 278, 628. A. N. Hand's concurring, 845 pertinent: justices exceptionally alert guardians rights, Justices Brandeis Stone, members, concurred Taft Appendix, 420. , "I known brief promptly, justifying incredulity, fail. Where obey." McPherson's Re 570. 955 (italics supplied). addressing remarks dictum bagan sentence: 'Were impression validity reasoning.' 953. 'thus' indicates virus feels extract infects 'With followed.' Third 'It devolves (contempt) passed *. raised definitely her Though form permissible.'; delineated procedure, followed whereby entered, occurring (cf. Eisenberg, 160) (this distinction possession); 245, 246, Eighth 'They (turnover orders) referee's made. $6,900. Until intentional loss control, escape 'by denying oath it."; 857 corpus 'If, turn-over made, papers hands, accounted disappearance. them. them.'; Judge, judicata, rehearing himself, constituting indirec 542) 'Therefore, far (turnover) directs anyone anything, direction; determines direction, truth. depends indirect Therefore directing erroneous. account, concluded, granted shown. Quite reluctantly, wrong originally merits, commital issue.' alone, permit forty years, tenaciously abided sub silentio utilized (e.g., Schlesinger, 117, affirming, 930), Stavrahn 1909, 174 330, Ann.Cas. 888, impression, sired presumption. stated defend question, come forward 1912, reiterated Weber 200 404. presumpi somewhat inarticulately phrased commended aptly carrying mandate listed discussed length H. Magen 91, observed relating pretty circuit.' 93. supra, came: curiam 'Any respecting prevailed 358), 419 Russell) discussion subject.' 973. 325. dated 1945, court, that: (petitioner here) fourth follows: drawn efforts retry be, themselves, frittered away constant delays failures one.'

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