Johnson v. Goldstein

MACK, Circuit Judge (after stating the facts as above). 1. Clearly on the basis of the second finding alone, that at all times on and after May 29,1924, the bankrupt was unable to comply with the order of that date, the rule was properly discharged. Petitioner’s contention, however, is that in the light of the first finding, that there was no change in bankrupt’s financial condition since May 29, 1924, the date of the turnover order, this second finding is necessarily contradictory to the first, and a legally erroneous attempt to nullify the effect of the turnover order affirmed, as is contended, by this court, and therefore, as well as by its final character, res adjudicata as to the bankrupt’s then ability to comply therewith. 2. The question presented on the former petition to revise, unlike that which an appeal in equity presents, was solely whether or not there was any substantial evidence to sustain the original turnover order, not whether the weight of the evidence justified it. We held that there was sufficient evidence ; we did not hold, as that question was not, and in that proceeding could not have been presented, that the evidence would not have justified a contrary finding by the referee and District Judge. Our decision is binding, therefore, only as to the question presented. It follows that if, but for the proceedings in this court, the District Court could have set aside its turnover order, or in the contempt proceedings have disregarded the findings on which the order was based, its power so to do remained unaffected by the petition to revise and our affirmance thereon. 3. The apparently contradictory findings can be explained on an interpretation that Judge Dawson disagreed with the referee and Judge Moorman. While the latter made no express findings of fact, in reducing the amount directed by the referee to be turned over he necessarily differed with the referee’s findings, and that, too, although he heard no additional testimony. We shall assume, however, that he found the bankrupt then to have the $8,000 in his possession or control. The turnover order, together with the findings on which it was based, was in no sense final; it was but an interlocutory step in the administration of the estate, and as such within the discretionary power of the court to rehear, reconsider, and change at any time while the bankruptcy proceedings were pending. In substance, though not in form, Judge Dawson granted such a rehearing, and on the same evidence, supplemented by other evidence, reached a conclusion contrary to that of Judge Moorman as to the bankrupt’s ability to pay over $8,000, or any part thereof. What this additional evidence was is not apparent from the record; we must therefore assume that, with the earlier testimony, it supported the second finding, for clearly, if a rehearing was proper, additional testimony could be taken thereon. But, even without it, we could not hold that there was no substantial evidence before the referee to sustain this new finding. The petition to revise must therefore be denied.