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in this case, to provide cars, unless such failure was shown to be due to the neglect or fault of the officer or agent.
 As to the last objection which the complainants make, it may be admitted that an order of the commission made without consideration or without any evidence at all or without a hearing, requiring the company to increase its equipment, might amount to a taking of its property without due process of law. But the parties have submitted to us the record before the commission which resulted in the order complained of. We have examined it, not for the purpose of seeing whether we agree with the conclusion reached, but to determine whether that conclusion was the result of a fair hearing upon proofs with a full opportunity to the companies to offer proofs, and we think it was. If the complainants thought, as they now contend, that other and different evidence should have been considered by the commission, it lay upon them to offer it at the hearing.
The prayer for an injunction pendente lite is denied.
In re WIBACK et al.
(District Court, D. Massachusetts. August 13, 1917.)
BANKRUPTCY 414(3)—PROCEEDINGS FOR DISCHARGE-WEIGHT AND SUFFICIENCY OF EVIDENCE.
When bankrupts first became embarrassed financially, an attachment was placed on their goods by a friendly creditor, under which business went on as usual, and a common-law assignment was made to such creditor, which, however, was never completed. Afterwards a hostile attachment was placed on the store. About this time witnesses noticed a great depletion in the stock, and a storage cellar was broken into. Though the bankrupts knew of this, and were active around the store, they made no complaint to the police, and took no steps to see whether goods had been stolen, or who had committed the break. The books of the firm showed a shortage in cash or merchandise of from $4,300 to $6,600. Held, that the facts showed that the bankrupts removed and concealed property belonging to the estate, justifying the denial of their applications for discharge.
In Bankruptcy. In the matter of Felix Wiback and others, bankrupts. On applications for a discharge. Applications refused.
Taylor & Taylor, of Worcester, Mass., for bankrupts.
MORTON, District Judge. The ground of objection to discharge, now principally relied upon, is that the bankrupts knowingly and intentionally concealed and removed assets belonging to the estate.
The bankrupts carried on a retail grocery and provision store, and in connection with it a bottling establishment and a steamship ticket agency. It was a business of substantial size, the gross income having apparently been upwards of $60,000 a year, the greater part of For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
which came from the groceries and provisions. Beneath the shop was a cellar, which was used for storage purposes and for the bottling business. Access to it was through the store; there were doors leading into it from other parts of the building, but they were permanently fastened.
The bankrupts' serious financial difficulties appear to have begun on May 3d, when an attachment was placed on the goods in the store, followed a few days later by another attachment in favor of Lundborg, who was a friendly creditor. Under his attachment, the prior one having been discharged, the bankrupts' bookkeeper, Honkenen, was appointed keeper, and business went on much as usual. Considerabie amounts of money were received by the bookkeeper from cash sales and from payments on outstanding accounts receivable. Substantial şums were handed to Wiback for the purpose of paying running expenses and buying new stock. A common-law assignment was made by the bankrupts to Lundborg; but it was not completed according to the requirements of Massachusetts law, and nothing was done under it. On May 15th another attachment was placed on the store, and the bookkeeper' was superseded as keeper by one Stockwell, who continued to act until the receiver in bankruptcy took possession on May 27th.
At the time when the attachments were first placed upon the store, it seems clear that there was a large and complete stock of goods in it and the cellar. Estimates as to the amount of stock vary; Wiback testifies that it was worth over $2,000; the objecting creditor, on incomplete data, figures the amount as over $4,300; Honkenen's estimate is rather indefinite, but falls between the two.
The operation of the store was continued under all the attachments, until bankruptcy proceedings were instituted; and goods were purchased and sold in the ordinary course of business. After Stockwell became keeper, team deliveries were suspended, and the purchases were more restricted.
The accounts from March 1st to May 16th are produced. They are apparently accurate, and appear substantially to balance. They show no depletion of stock. According to them, the stock should have increased in value in that interval about $2,800. The receiver in bankruptcy found only $500 or $600 worth of goods in the store and cellar. On the figures of the objecting creditor, about $6,600 in goods or cash is unaccounted for. Accepting Wiback's estimate of the stock on hand on March 1st ($2,000), and the expert bookkeeper's statement of the merchandise account after that date, the accuracy of which has not been seriously questioned, about $4,300 worth of goods disappeared.
There is testimony from several witnesses that a great depletion of stock was noticed during the last two weeks in May; i. e., after the common-law assignment to Lundberg had failed, and a hostile attachment had been placed on the store, and it had become evident to the applicants that they must go through bankruptcy. Honkenen testifies that on May 1st the store had its full usual stock, and that “there was quite a remarkable depreciation” of it between May 16th and the bankruptcy on May 25th.
While the attachments were in force, Wiback said that the bankrupts expected Lundberg to buy the property, and that they were going to continue the business. After May 16th the storage cellar was broken into. That goods were taken is not explicitly stated in the evidence; but, of course, they were. The doors were not broken down for exercise or amusement. This phase of the case is left somewhat indefinite on account of Stockwell's death before testifying. When the attachments were made, and for some time after that, the cellar contained a substantial amount of stock; there was little or nothing in it when the receiver took possession. The break was called to the attention of the bankrupts; but, according to their own testimony, neither one of them made any complaint to the police about it, or took any steps to see whether goods had been stolen, or made any inquiries or investigations to determine who had committed the break.
There can be no doubt that, between the first attachment and the bankruptcy, a large amount, either of goods or of money received from the sale of goods, disappeared and is unaccounted for. The bankrupts were active around the store all this time. If they were honest, they would naturally be the first to notice such an occurrence and to call attention to it. They never did so. They testify, in effect, that they do not know what became of the goods, if any were taken; but they make no suggestion as to how the loss occurred. In my opinion, the bankrupts knew that the stock was disappearing and kept silent about it. Their conduct with reference to the break in the cellar strongly suggests collusion therein. Why did they display no interest in such an occurrence? Why did they not have the matter brought to the attention of the police? Why did they not endeavor to ascertain whether anything had been stolen? Their counsel suggests, because the store was under attachment and the keeper was responsible; but the bankrupts gave no such reason, and I do not regard the explanation as adequate, if they had offered it.
There is, it seems to me, but one reasonable explanation of the plain facts and of the bankrupts' conduct, viz. that the stock or its proceeds was being taken by them, or with their knowledge and approval.
The learned referee's findings on the fifth specification are set aside. I find that the bankrupts did remove and conceal property belonging to their estate.
Applications for discharge refused,
(District Court, E. D. New York. August 29, 1917.) ADMIRALTY C5JURISDICTION-PUBLIC VESSEL OF FOREIGN POWER.
A vessel regularly enrolled as a ship of the Argentine navy, and flying the naval ensign of that republic, whose officers and crew were officers and enlisted men of such navy, was not subject to a libel for damages for a collision, though at the time of the collision carrying a cargo of general merchandise belonging to private persons, especially where the
cargo was carried for the benefit of the government, and as an incident For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
to the vessel's voyage to this country to obtain coal and munitions for
the use of that government. In Admiralty. Libel by John B. Breymann and another, doing business as George H. Breymann & Bros., owners of the scow B. B. No. 19, against the Argentine steamship Pampa and her engines, boilers, tackle, etc. On order to show cause why the vessel should not be released from custody. Decree issued, releasing the vessel.
The Argentine naval transport Pampa was in collision with mud scow B. B. No. 19 on August 11, 1917, off Scotland Lightship. A libel has been filed in this court against the Pampa in rem, and the vessel has been attached by the marshal of this court, pursuant to the prayer of the libel. On August 27, 1917, upon motion of Messrs. Pavey, Wells & Gadrich, appearing specially for the motion, an order to show cause was granted, directing the libelants to show cause why the libel should not be dismissed for want of jurisdiction.
The Pampa is a vessel regularly enrolled as a ship of the Argentine navy, and flies the naval ensign of the Argentine Republic. Her officers all hold commissions from the Argentine government as otficers of the navy. Her crew are enlisted men of the Argentine navy. At the time of the collision she was carrying a cargo of general merchandise belonging to private persons. The orders issued to the commander of the Pampa were as follows: “Department of the Navy, Secretary's Office,
"Buenos Aires, July 14, 1917. "To the Commander of the Transport Pampa:
"The captain Ismael F. Galindez, Secretary General of the Department of the Navy, advises you that by order of the Secretary of the Navy you are to leave with the ship under your command on the 15th of July, going to New York, U. S. A., port of destination for your cargo, about which you will receive instructions from the Director General of the Administration Department.
From ports of call you will get in communication with the Chief of the Argentine Naval Commission in the United States, whose cable address is 'Navalarg, Washington, announcing the date of your arrival. In arriving at New York (U. S. A.) you will request orders from said Chief, advising him that you are bringing a cargo, and you will receive from him orders as to the cargo you are to bring on your return trip. The cargo you are to bring on your return voyage will be about 4,500 tons of coal. To increase the transporting capacity of your ship, you will discharge all the water not needed for your return voyage. In the United States you will fill your bunkers, and on your return voyage you must call at Porto Rico to replenish coal, etc., etc.
There is special interest that the transports should make these voyages in the shortest time possible, and we recommend you to hasten the operations at port to comply with that purpose.
* * It is absolutely prohibited to take passengers on board, or persons not a part of the crew, without express orders of this Department. We enclose herewith copies of reports of former commanders, and also an abstract of an executive order of the Government of the United States as to the defensive maritime areas around its coast.
In the outward voyage and also in the homeward voyage you will hoist the national ensign of war.
"[Signed] 1. F. Galindez." After the arrival of the Pampa at New York, her commander received the following telegram: "Commander Transport Pampa, Cr Henry Kessel, 25 Pearl St., New York,
N. Y.: “By order ministerio de Marina you will take on Pampa naval material from Kessel in New York and four thousand tons of coal and artillery material from Bethlehem in Philadelphia commander Campos Urquiza president Argentine Naval Commission."
The coal and war material which the Pampa was to take on her return voyage had all been contracted for prior to the time when the cargo of general
merchant vessels, and the cargo discharged at New York. During the discharge, and while the commander of the Pampa was under orders to take on
placed on board the vessel at Buenos Aires. The vessel
board the war material above mentioned, the vessel was attached by the marshal. The ship's manifest shows that there were about 65 shipments made at the port of loading, and that there were about one-half that number of consiznees for the cargo at the port of New York. J. F. Whitney & Co., agents for the cargo at New York, have collected in the neighborhood of $60,000 freight on the cargo, which is ultimately to be turned over to the Argentine naval commission at Washington. The foregoing facts are stipulated by counsel.
Pavey, Wells & Gadrich, of New York City (F. D. Gadrich and T. Catesby Jones, both of New York City, of counsel), for the motion.
Kirlin, Woolsey & Hickox and R. S. Erskine, all of New York City, opposed
VEEDER, District Judge (after stating the facts as above). Upon the facts stipulated the uniform course of authority requires the release of this vessel. The Parlement Belge, 5 P. D. 197; The Constitution, 4 P. D. 39; The Exchange, 7 Cranch, 116, 3 L. Ed. 287; Workman v. New York City, 179 U. S. 552, 566-570, 21 Sup. Ct. 212, 45 L. Ed. 314; Tucker v. Alexandroff, 183 U. S. 424, 440-446, 22 Sup. Ct. 195, 46 L. Ed. 264. I adopt as a statement of the controlling principle what was said by the Circuit Court of Appeals for the Fourth Circuit in the recent case of The Attualita, 238 Fed. 909, 911, 152 C. C. A. 43, 45:
"For actions of the public armed ships of a sovereign, and of those, whether ærmed or not, which are in the actual possession, custody, and control of the nation itself. and are operated by it, the nation would be morally responsible, although without her consent not answerable legally in her own or other courts."
Moreover, it appears that, although this vessel was carrying a general cargo, the cargo was carried for the benefit of the Argentine Republic, and as an incident to her voyage to this country to obtain coal and munitions for the use of the Argentine Republic.
A decree will issue, releasing the vessel from arrest.
In re GOTTLIEB & CO.
(District Court, D. New Jersey. September 17, 1917.) 1. BANKRUPTCY Ow212-OBJECTIONS TO JURISDICTION-WAIVER.
The receiver in bankruptcy filed a petition, alleging that the bankrupt had transferred all outstanding book accounts then in existence, and those that might thereafter be created, to a creditor for debts due and to become due, and that the assignment was a preference. The referee made an order restraining the creditor from collecting the accounts, and requiring him to show cause why he should not turn over moneys already collected. The creditor and receiver then agreed that the creditor should collect the accounts without delay, that the proceeds should be deposited in the name of the receiver, pending determination as to who was For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes