In re Plaza Shoe Co.

HAND, Circuit Judge (after stating the facts as above). We regard the referee’s first finding as equivalent to saying that the trustee had proved his ease by a preponderance of proof, the usual role in civil cases. It is impossible to know whether the District Court affirmed the referee’s order because it reversed the first finding, or because it affirmed the second finding and thought the first irrelevant. If the rule of proof in such proceedings is the same as in civil causes, as we believe, it would be error to affirm the referee’s order without reversing his first finding. We have, however, no jurisdiction to reverse or affirm any finding of the referee; nor can we pass upon the action of the District Court upon it, until it appears what that action has been. Hence we must dismiss the petition, without either affirming or reversing the order. The cause must be remanded, but we can probably terminate the controversy by instructions to the District Court to reverse or affirm the first finding, which alone is relevant. If it affirms, it should reverse the referee’s order and enter an order directing the respondent to surrender the property; if it reverses, it should affirm the order. If the defeated party persists, he can still invoke our extremely limited power of review by a new petition to revise, though the case would hardly seem to be one in which we could intervene upon the facts. The only question of law raised by the present record is as to what should be the rule of proof on petitions to compel a bankrupt or its officer to surrender property of the estate. We adopt the ruling in Free v. Shapiro, 5 F.(2d) 578 (C. C. A. 4). We said nothing in Re Magen, 10 F.(2d) 91, which suggested any other standard of proof, although the point was not specifically discussed. In speaking of the quantum bf proof, we distinguished between the summary proceeding and the contempt proeeeding in Re Chavkin, 249 F. 342, 161 C. C. A. 350. In re Stavrahn, 174 F. 330, 98 C. C. A. 202, 20 Ann. Cas. 888, and in Re Weber Co., 200 F. 404, 118 C. C. A. 556, we said only that, the order to surrender made out a prima facie case for the trustee upon the later contempt proceeding. Those decisions did not concern the degree of proof necessary in thq summary proceeding. In re D. Levy & Co., 142 F. 442, 73 C. C. A. 558 (C. C. A. 2) was a contempt proceeding; so also were In re Cole, 163 F. 180, 90 C. C. A. 50, 23 L. R. A. (N. S.) 255 (C. C. A. 1), Samel v. Dodd, 142 F. 68, 73 C. C. A. 254, and United States ex rel. Paleais v. Moore (C. C. A.) 294 F. 852 (C. C. A. 2). We know of no case which has held that the summary proceeding is not civil in all its incidents. It is quite true that the main purpose of the proceeding is to compel the respondent to surrender under the sanction of imprisonment. But, as Judge Woods observed in Free v. Shapiro, an order to surrender, if disobeyed, will bar a discharge, and to that [280] the trasteé is entitled, if he wishes. Moreover, even though it be true, which we do not now decide, that in the contempt proceeding the present ability of the respondent to comply must be proved beyond reasonable doubt, the order is not a nullity, nor need the trustee begin again ab ovo. As we have said, the order makes a prima facie case, and in the summary proceeding itself there is no objection to the added finding that the ease has or has not been proved beyond a reasonable doubt. That finding, once passed Upon by the District Court, while not strictly res judicata (Johnson v. Goldstein, 11 F. [2d] 702 [C. C. A. 6]), would in practice generally conclude the controversy, at least if the contempt proceeding were before the same judge. Any supposed inconveniences of having two rules of proof might, we think, be reduced to small compass by such procedural means. Moreover, the advantages, real or fancied, of making one bite to the cherry cannot' obscure the fact that the summary proceeding is civil, and should be controlled by the usual rales governing civil causes. Petition to revise dismissed; cause remanded, with instructions to proceed in conformity with the foregoing opinion.