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testimony, blames the Stimson for failure to put her helm hard-astarboard. He appears to think that, if that had been done, the collision would not have happened. It is my understanding that a vessel cannot be made to change her position by use of her helm when she does not have steerageway, and the testimony of the captain does not directly controvert this principle of natural philosophy; nor does he assign any reasons for supposing that, if the Stimson's helm had been put hard-astarboard, it would have had any effect either to check or change the movements of the Rickmers. The argument in behalf of the respondent, based upon testimony of expert witnesses, assumes that it would have been possible for the Stimson to have used her sails in a manner to have forced her to swing on her cable inshore, so that the Rickmers might have passed without colliding. This, however, is only a suggestion of a mere possibility. To be fair, the Stimson cannot be convicted of a fault upon any theory which ignores the obvious hazard of any attempt to set her sails at a time when the wind was blowing with such force as to drive the Rickmers, without sails and against the resistance of her anchors. If the Stimson's sails had been set and filled for the purpose of changing her position while the gale continued, in which direction would she have moved, and where would she have fetched up? Unless an intelligent answer to this inquiry can be given, there can be no basis whatever for supposing that the Stimson could have changed her position without increasing, instead of diminishing, the danger to which she was exposed. In the argument, the action of the Corona is instanced, and it is said that equal vigilance and skill on board the Stimson would have kept her out of the path of the Rickmers. There are differences, however, which I am bound to notice; differences both in direction and velocity of the wind. The position of the Rickmers, when she commenced to drift, after dropping her anchor the first time, was southwest of the Corona, and the wind at that time was from the west or southwest, and its velocity was only 10 miles per hour. The Corona could very well, under those conditions, be moved a short distance without any imprudence. That event was at about 5 o'clock p. m. At 11 o'clock, when the Rickmers made trouble for the Stimson, the wind had increased to 35 miles per hour and was coming offshore from the southeast, the Rickmers had dragged her anchor westward one-fourth of a mile when she came into collision with the Mildred, and her position there was a little west of south from the Stimson, and, as I have before indicated, the distance was half a mile. If her movements could have been observed in the darkness, they indicated nothing as to her course, except that she was not under control. Therefore the Stimson could not execute any movement to get out of her way which would not be as likely to bring the two vessels into collision as to avoid a collision.
Recurring, now, to the main question in the case, which is whether the Rickmers was in fault, I will say, preliminarily, that the Stimson being entirely free from blame, and, the Rickmers being the aggressor, there is a natural and legal presumption that the damage which she caused was due to her fault, and to be entitled to exemption from lia
bility she must prove good seamanship in her management, and that her ground tackle was in condition fit for the service required, so that there was no imprudence in releasing the tug and trusting her anchors, in view of the existing conditions. The natural presumption is strengthened in this case by the indisputable fact that the other vessels exposed to the same force were held securely by their anchors, proving that, if the Rickmers had been equipped with suitable anchors for a vessel of her size, and with sound cables of sufficient strength, and if she had been carefully moored by placing her anchors properly, so as to have secured the advantage of their combined holding power, with sufficient length of chains and room to swing without coming in contact with the other vessels, she, too, would have withstood the storm without damage; but, instead of behaving as other vessels in the bay behaved, the Rickmers acted like an evil sprite, first making a hostile demonstration towards the Corona, which frightened that little craft into making extraordinary maneuvers, later striking out to the westward, breaking the Mildred's nose, and then rushing north to embrace the Stimson, and wildly dancing with her to the music of the hurricane for a distance of seven or eight miles. I can admire, though I cannot adopt, the ingenious theories of the expert witnesses by which they exculpate the Rickmers from all blame, and also condemn the Stimson for not being sufficiently alert and nimble to keep out of the reach of the impetuous stranger. The word "expert" appears to be peculiarly apt and appropriate for describing the testimony upon which the respondent relies. Considering the threatening weather when the Rickmers came into the bay, and the unbroken sweep of the wind, with the exception of the little protection afforded by Magnolia Bluff, a careful navigator would have chosen a position for anchorage which would have enabled his vessel to swing with ample scope of cable without danger of colliding with other vessels previously anchored in the bay. The excuse offered for not paying out more cable than 40 fathoms on the port anchor and 30 fathoms on the starboard anchor was that greater length of chain would have caused the Rickmers to swing dangerously near the Mildred and the Corona. This proves that an inexcusable error was committed in choosing the place for anchoring, and the captain of the Rickmers in his testimony claims that he was not satisfied with the location, but dropped anchor at the place indicated by the captain of the tug, who, it is insisted, must be held responsible as a local pilot. This, however, does not relieve the Rickmers from legal liability. She is answerable for damages caused by the inexcusable errors of whoever for the time being had control of her movements, whether in the capacity of master, chief mate, or local pilot. Homer Ramsdell Transportation Co. v. La Compagnie Generale Transatlantique, 182 U. S. 406, 21 Sup. Ct. 831, 45 L. Ed. 1155; The China v. Walsh, 7 Wall. 53, 19 L. Ed. 67; The Merrimac, 14 Wall. 199, 20 L. Ed. 873; Ralli v. Troop, 157 U. S. 386, 15 Sup. Ct. 657, 39 L. Ed. 742; The John G. Stevens, 170 U. S. 113, 18 Sup. Ct. 544, 42 L. Ed. 969; The Barnstable, 181 U. S. 464, 21 Sup. Ct. 684, 45 L. Ed. 954; Harrison v. Hughes, 125 Fed. 860, 60 C. C. A. 442.
From the evidence I find that the actual damages to the Stimson legitimately chargeable to the collision amount to the aggregate sum of $18,
680, for which amount, with interest and costs, a decree will be given in favor of the libelant. In this amount there is included $9,388 for expenses paid for repairs, and for unloading and reloading, and necessary expenses of the ship during 74 days of detention; $5,000 for estimated permanent damage by impairment of the salable value of the ship; and $1,292 for demurrage at the rate of $58 per day for 74 days.
In re GOLDFARB BROS.
(District Court, N. D. Georgia. May 16, 1904.)
1. BANKRUPTCY-CONTEMPT PROCEEDING FOR FAILURE TO SURRENDER PROPERTY-SUFFICIENCY OF EVIDENCE.
To justify an order requiring a bankrupt to turn over money or property to his trustee under penalty of imprisonment for contempt, it must be shown clearly, satisfactorily, and beyond a reasonable doubt that he has such money or property in his possession or under his control. Where the evidence establishes only a strong probability that he has some money or property which has not been accounted for, without furnishing any basis for a finding as to the amount, it is insufficient.
In Bankruptcy. On rule against bankrupts for contempt for failure to surrender property to the trustee.
Mayson, Hill & McGill, for trustee.
NEWMAN, District Judge. This is a proceeding as for contempt. against the bankrupts Herman and Max Goldfarb, trading under the firm name of Goldfarb Bros. The proceeding is based upon the allegation that the bankrupts have failed to turn over to the trustee in bankruptcy a considerable amount of merchandise, or the cash which should be the proceeds of the same. This petition was referred to the referee, and he has taken some evidence, and makes a report finding that the bankrupts "should be chargeable with the shortage in their goods and their money in the sum of $6,245.25." The referee reaches this conclusion by a calculation based on purchases made by the bankrupts in June, July, and August, 1903, and certain inferences from their bank account, and checks in evidence, and the amount of goods found in the stores when the receiver in the bankruptcy case took possession.
I have gone over the report of the referee and the evidence in this case several times, without being able to reach any satisfactory conclusion; and have within the last two days gone over all of it again, and am still uncertain as to what should be done in the case. The referee admitted in evidence before him a statement handed by one of the counsel for the bankrupts to counsel for certain creditors (now counsel for the trustee), which states their recent purchases at $12,701.83. As the basis of the whole proceeding was to show goods in the hands of the bankrupts recently purchased, I do not think this paper could properly be admitted in evidence; at least without being
supplemented by proof that the goods actually went into the possession of the bankrupts. There was an admission by one of the bankrupts that they had received goods in their store amounting to about $10,000, and this may perhaps be properly taken as a basis of calculation as to what they should have had on hand at the time the bankruptcy proceeding was instituted. If it be so taken, then, so far as I can ascertain from the statements made by the bankrupts, whose testimony was taken before the referee in this contempt proceeding, they would be entitled to a deduction from this sum of $8,750.41, and, in addition thereto, any amount for which they may have sold goods for cash, which cash was paid out by them to creditors or otherwise, and which is not now under their custody or control. It is utterly impossible to tell how much this is, and there is no satisfactory way of inferring, so far as inferences be permissible, from any other facts in the case. If this could be fairly ascertained, and the amount of stock on hand about the 1st of June, 1903, could also be ascertained, then the deduction of one from the other would seem to give the amount which the bankrupts ought to have in their possession, and which would appear to be unaccounted for; this, of course, depending upon whether or not such cash sales during the three months referred to would be as much in amount as the goods on hand on the 1st of June plus $1,249.59, the difference between $8,750.41 and $10,000. It is fair to the bankrupts, however, to say that the $8,750.41 allowed them only includes $800 for goods sold on credit, as this is the only amount given in the evidence. This is stated by the trustee, who testified, to be the amount of “good accounts." How many bad accounts there were, or how many he did not class as "good" accounts, is not stated. But whatever amount there was of these accounts for goods sold during the three months should also be allowed the bankrupts in this calculation. This is the only method that I see by which any satisfactory conclusion in this case can be reached. I am unable to follow the referee in the calculation he makes, and from which he derives the result which has been stated. It is entirely clear, and counsel for the trustee so concedes, that the finding of the referee that the amount of difference between the checks returned by the Third National Bank to the bankrupts and the amount of checks found by the receiver in the store should be charged to the bankrupts upon the idea that they must have drawn out the money in their own name and appropriated it, would be a rather violent inference in any case, and certainly not justifiable in a quasi criminal proceeding such as this. The bankrupts emphatically deny that they have any money or effects in their possession. In their evidence they mention several ways by which they seem to think the property may have been lost to them and to their creditors. None of these, however, although possible, are satisfactory. It will not do, of course, to say that the mere denial of the bankrupt that he has any money or effects in his possession should be sufficient to exonerate him from a charge of this
I stated in the opinion filed in the contempt proceeding (In re Shachter [D. C.] 119 Fed. 1010-1015) that, if this were allowed, "the court
would be powerless, in the face of the bankrupt's oath, to require the production of property, however conclusive might be the evidence. that such property was in his possession or control." The case referred to (In re Shachter) was heard in the District Court without having been sent to the referee. That case was similar to the one now before the court as respects the manner in which the conclusion was reached, and the opinion shows that the goods were traced beyond question into the possession of the bankrupts, and not satisfactorily accounted for. I would be unwilling to depart from the rule which I followed in that case, and which has been adopted by a number of judges. Ripon Knitting Works et al. v. Schrieber (D. C.) 101 Fed. 810 (in which case the petition for revision was denied by the Circuit Court of Appeals for the Ninth Circuit-104 Fed. 1006, 43 C. C. A. 682); In re Gerstel (D. C.) 123 Fed. 166; In re Kane (D. C.) 125 Fed. 984. The same rule was laid down by Sanborn, Circuit Judge, in a concurring opinion in the case of Boyd v. Glucklich, 116 Fed. 131-142, 53 C. C. A. 451.
As was stated in the Shachter Case, I see nothing in the opinion of the majority of the court in this last case which denies the right of the bankrupt court "to proceed as for contempt against a bankrupt who wrongfully refuses to turn over assets to a receiver or to a trustee in bankruptcy."
The foregoing, however, should be taken in connection with another rule, which is that a bankrupt cannot be required, under a proceeding for contempt, to do that which it is out of his power to do. The evidence in such a proceeding should satisfy the court beyond a reasonable doubt that the bankrupt has the money or goods in his possession and control, and is able to turn them over when so ordered. If he has placed them out of his possession and control, no matter how foolishly or how wrongfully, he cannot be required by an order to turn them over to a receiver or to a trustee. In a recent case in the Circuit Court of Appeals for the Third Circuit (Trust Co. v. Wallis, 126 Fed. 464), in the opinion by Circuit Judge Gray it is said:
"The court may, by summary order, direct the delivery and turning over to the trustee by the bankrupt, or by any third person holding the same under his order and control, any property which, prior to the filing of the petition, the bankrupt could by any means have transferred, or which might have been levied upon and sold under judicial process against him. For disobedience of such order the court in bankruptcy undoubtedly has the power, by attachment for contempt, to enforce compliance with such order, and punish refusal to comply. This power, however, is far-reaching and drastic, and must be exercised with cautious discretion. If the bankrupt denies that he has possession or control of the property, or if a third person in possession thereof claims to hold it, not as the agent or representative of the bankrupt, but by title adverse to him, and there is no evidence to indisputably show that such denial or claim is false or fraudulent, and that the case is one of simple concealment or refusal on the part of the bankrupt, or the one in possession, to deliver up the property as ordered, it would be an unwarranted stretch of power on the part of the court to resort to a summary proceeding for contempt for the enforcement of its order. In the absence of fraud or concealment, the bankrupt court can only order the delivery of property to the trustee which the bankrupt is physically able to deliver up, having the same in his possession or control. If it shall appear that he is not physically able to deliver the