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 $1,219.59, the difference between $8,750.11 and $10,000. It is fair to the bankrupts, however, to say that the $8,750.41 allowed them only includes $800 for goo{ls 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 kind.

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, 110 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 thie 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, hy summary order, direct the delivery and turning over to the trustee by the bankrupt, or by any third person holding the same under liis 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 posspasion 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 property required by the order, then, confessedly, proceedings for contempt, by fine and imprisonment, would result in nothing; certainly not in a compliance with the order. The contempt in this case could only be purged by a reiteration of the physical impossibility to comply with the order whose disobedience is being thus punished. An order made under such circumstances would be as absurd as it is inconsistent with the principles of individual liberty."

In a proceeding of this sort, it should appear from the evidence, beyond a reasonable doubt, that the bankrupt has in his possession money and effects which should go into the hands of the trustee in bankruptcy. Judge Gray's language is that over the bankrupt's denial that he has such possession or control of the money or effects the evidence should "indisputably show” the contrary. This may be shown in the manner referred to above, or by the method followed in the Shachter Case, supra; but it should be shown clearly, satisfactorily, and beyond a reasonable doubt.

While the evidence in the case at bar shows very strong probability, and even more than a probability, that the bankrupts in this case have not dealt fairly with their creditors or with the trustee, it is not to my mind sufficiently definite and convincing to justify the conclusion that they are withholding any definite amount, or even an approximate amount, of money or goods from the trustee. Certainly it fails to show with any degree of satisfaction that they have withheld the amount found by the referee to be in their hands. If there was evidence in the record to show with some definiteness the amount of stock on hand in the bankrupts' stores on the 1st of June, 1903, and any evidence to show the amount of goods sold by them for cash which they did not deposit in bank; how much of this money was paid out, or, if not paid out, with some degree of certainty, how much was retained-data would then be had from which to make some fair calculation. But in the absence of this I do not think that any one can take this evidence, and this entire record, and say that the bankrupts have any amount of goods or money, fixing it even approximately, in their hands, which has not been turned over to the trustee.

This is a case which should have further investigation; and, while the finding of the referee cannot be approved, the contempt proceeding will be retained in court to hear additional evidence, if counsel for movant should desire to offer the same, in conformity and in line with what has been hereinbefore stated.

The order is that the finding of the referee be disapproved, but the contempt proceeding be retained for such further action as may be proper

In re TUCKER et al.

Ex parte NEW YORK COTTON EXCH.

(District Court, D. Massachusetts. July 22, 1904.)

No. 7,815.

1. BANKRUPTCY-LOAN BY WIFE-PROPERTY RECEIVED FROM HUSBAND AS GIFT.

A transfer of corporate stock by a husband to his wife as a gift by surrendering certificates owned by him and causing new ones to be issued in her name, was, in efíect, a direct transfer to her, and void under the law of Massachusetts, where the parties resided, and, the stock being in law his property, its retransfer to him by his wife as a loan affords no basis for a claim by her against his estate in bankruptcy.

In Bankruptcy. On review of decision of referee.
I. R. Clark, for Gertrude F. Tucker.
Robert K. Dickerman and John A. Curtin, for trustee.

LOWELL, District Judge. Tracey Tucker, one of the bankrupt partners, before his bankruptcy, assigned to his wife a seat in the New York Cotton Exchange, standing in his name, as security for the redelivery of 25 shares of Amalgamated Copper stock and 40 shares of United States Steel stock, preferred, alleged to have been lent by her to him, or to the firm. If the shares thus lent were the separate property of the wife, she is entitled to reimbursement, according to the principles of equity which control the federal courts, whatever be the statutes and decisions of Massachusetts. James v. Gray (C. C. A., 1st Circuit, July 6, 1904) 131 Fed. 401. Counsel for the trustee in bankruptcy has contended that this stock did not belong to the bankrupt's wife, but to the bankrupt himself, or to his firm. It was not disputed at the argument, and I so find, that the certificates of stock in question, indorsed in blank, were in the possession of Tracey Tucker as his own property before his marriage; that the indorsements were filled out to Mrs. Tucker after the marriage, and the certificates were sent to the transfer agent, the intention being to give her the stock, and no consideration passing between the parties; that certificates in the name of Mrs. Tucker were duly issued and delivered to her, and that these certificates were by her indorsed in blank, and delivered for the benefit of the bankrupt firm. It was not disputed that the title to this stock, when represented by certificates so indorsed, passed by delivery to the holder. Under the statutes of Massachusetts, a gift from husband to wife is void unless it is made under conditions not here complied with. The gift by Tracey Tucker to his wife was, therefore, void, and the stock handed by Mrs. Tucker to the firm did not belong to her.

Some language in James v. Gray, above cited, may be taken to mean that a federal court like this, which does equity, will disregard the statutes of Massachusetts as interpreted by its courts, and will uphold transfers made directly from husband to wife; but this language, I think, was not intended by the Court of Appeals to apply to a transfer by way of pure gift, under the circumstances here presented. As this point was not argued before me—because James v. Gray had not then

overruled In re Talbot (D. C.) 110 Fed. 924-counsel may apply for a reargument on this point alone, if they wish to do so. See Wallingsford v. Allen, 10 Pet. 583, 594, 9 L. Ed. 542; Lucas v. Lucas, 1 Atk. 270. Some suggestion was made of an antenuptial agreement between Mr. and Mrs. Tucker, but counsel for Mrs. Tucker has called the attention of the court to no evidence establishing such an agreement. He argued chiefly that the corporation itself constituted such a conduit between Mr. and Mrs. Tucker as to validate his gift of the stock to her, in the same manner that a gift of real estate is validated by being passed through a third person. But the cases are not analogous. Here the corporation did not take the title to the stock, which passed directly from the transferror to the transferee.

Judgment of the referee affirmed.

HALL & BISHOP v. UNITED STATES.

事

(Circuit Court, S. D. New York. May 23, 1904.)

No. 3,306. 1 Customs DUTIES—CLASSIFICATION-DRESS Goods-EMBROIDERED WOOLEN

ARTICLES.

Held, that embroidered dress goods of wool are dutiable, under Tarifi Act July 24, 1897, c. 11, § 1, Schedule K, par. 369, 30 Stat. 184 (U. S. Comp. St. 1901, p. 1667), as "dress goods

of wool, and not specially provided for," rather than as "articles embroidered by hand or machinery,

made of wool,” under paragraph 371 of said act (30 Stat. 185 [U. S. Comp. St. 1901, p. 1667]). Appeal by the Importers from a Decision of the Board of United States General Appraisers.

On application for review of a decision of the Board of General Appraisers. The decision in question affirmed the assessment of duty by the collector of customs at the port of New York on merchandise imported by Hall & Bishop.

Frederick W. Brooks, for importers.
D. Frank Lloyd, Asst. U. S. Atty.

TOWNSEND, Circuit Judge. The merchandise in question was assessed for duty as "women's and children's dress goods, not specially provided for," under the provisions of paragraph 369 of the tariff act of July 24, 1897, c. 11, § 1, Schedule K, 30 Stat. 184 (U. S. Comp. St. 1901, p. 1667). The importers protested, claiming that the goods in question were dutiable under the provisions of paragraph 371 (30 Stat. 185 (U. S. Comp. St. 1901, p. 1667]), of said act, as "embroideries and articles embroidered by hand or machinery, made of wool, or of which wool is a component material.” The Board of General Appraisers has found that the articles in question are women's dress goods, and also that they are articles embroidered by hand or machinery.

The sole contention of the importers herein is that inasmuch as paragraph 371, under which they claim, is unqualified, while the provisions of paragraph 369 are qualified by the words "not specially provided for,"