During the night immediately following the filing of a bankruptcy petition, the president of a bankrupt corporation withdrew the bulk of the merchandise by stealth and lodged it in hiding places known only to himself. Part has been retrieved; part is still concealed. The District Court, confirming the report of a referee, made a turnover order for the return by the respondent of the property withheld. On the ground that the order was void for indefiniteness the Court of Appeals for the Fifth Circuit reversed it, except as to a few items no longer contested. 63 F.(2d) 749. A writ of certiorari, sued out by the trustee in bankruptcy, brings the case here.
The bankrupt corporation began the business of the sale of drugs on May 26, 1930, and was thrown into bankruptcy the following February. The respondent, Dasher, was its president, and he, his wife, and his infant son were the holders of the shares. The cost of all the merchandise owned by the bankrupt during the life of the business was $72,551.82; the sales, less the gross profts, were $23,056.01. There should have been on hand at the bankruptcy merchandise of the value at cost of $49,495.81. Only $29,754.16 in value has come into the possession of the trustee or the receiver. Much of this would have been lost to the creditors if it had not been unearthed from the hiding places where it had been concealed by the respondent. The value at cost of the undelivered residue is nearly $20,000. Of this residue a few items ($583.69) have identifying marks or labels. The propriety of a turnover order as to those is no longer disputed. There is left an ultimate residue ($19,157.66 in value) secreted by the respondent and still withheld from the estate.
The referee, after giving the respondent an opportunity to account for the disposition of the assets, has ordered the return of this undelivered residue. The findings describe it as the 'balance of merchandise in the hands of the said R. F. Dasher at the time of bankruptcy at a cost price value of $19,157.66, of a class of merchandise shown by the proofs of claim to have been purchased on the credit of the bankrupt corporation and delivered to it, and of such a class of merchandise as is usually carried and sold in a retail drug store, but which is not capable of a more specific description, such more specific description being known only to the respondent in this cause.' The description in the findings is repeated in the order with unimportant verbal changes.
The respondent has made away with goods belonging to the estate and defiantly withholds them. So the referee has found upon evidence not in the return and hence presumably sufficient. The process of computation and inference outlined in his report and leading up to his conclusion has support in many cases. See, e.g., In re H. Magen Co. (C.C.A.) 10 F.(2d) 91, 93, 94; In re Chavkin (C.C.A.) 249 F. 342; In re Stavrahn (C.C.A.) 174 F. 330, 20 Ann.Cas. 888; In re Levy & Co. (C.C.A.) 142 F. 442; Sheinman v. Chalmers (C.C.A.) 33 F.(2d) 902; In re Cohan (C.C.A.) 41 F.(2d) 632. The abstraction of the merchandise being evidenced by clear and convincing proof, there is no doubt about the jurisdiction of the court to direct a summary return. Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419. The respondent seeks to thwart the exercise of this conceded jurisdiction by the objection that the merchandise is not sufficiently described. He says that instead of the general description in the findings and the order there should be an inventory of items. The drugs, the perfumery, the surgical appliances, and the many miscellaneous articles that make up the stock in trade of a modern drug store should be set forth, the insists, in particular schedules. Only thus, we are told, will the respondent be in a position to understand the mandate to which obedience is due.