Opinion
No. 330.
April 6, 1936.
Appeal from the District Court of the United States for the Eastern District of New York.
In the matter of Byrd Coal Company, Incorporated, bankrupt. Peter A. McCabe as trustee, etc., filed a petition to punish Jacob M. Mandelbaum, the bankrupt's attorney, for contempt. From an order dismissing the petition, the petitioner appeals.
Order reversed.
Herman G. Robbins, of Brooklyn, N.Y., for appellant.
Jacob M. Mandelbaum, of New York City, for appellee.
Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
We agree with the judge that for failure to obey an order made under section 60d of the Bankruptcy Act, 11 U.S.C.A. § 96(d), the respondent cannot be imprisoned unless it is shown that he can comply. The trustee's attorney said at the argument before us that he conceded that the respondent could not now pay, and perhaps upon that we might affirm the order; but we are not content to adopt this course. The respondent's effort to purge himself is not explicit enough (see Cutting v. Van Fleet, 252 F. 100, 102 [C.C.A.9]); he must categorically and in detail swear to the extent of his present resources of all kinds, not merely from his profession, and particularly he must show what became of the money which he wrongfully took from the bankrupt. The trustee should search his conscience by the most unsparing pursuit. If it then appears that he has nothing with which to pay, he must be discharged upon this proceeding; but it by no means follows that the matter should end. It would seem imperative that some disciplinary inquiry as to his conduct should then follow; he exacted $5,400 from the prospective bankrupt and says that he used it up, though by his own confession he was entitled to only $1,400. An officer of the court at least owes it an explanation for such conduct. While this part of the matter is not strictly within our competence, we cannot forbear the hope that some such course will be followed.
Order reversed.