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[1] His assertion that there should be deducted from the bank's claim the sum of

Huntington, W. Va., on the brief), for appellee.

Before WOODS, WADDILL, and ROSE, $4,984.52 rests on different grounds. That Circuit Judges.

ROSE, Circuit Judge. The appellant is the trustee in bankruptcy of the Star Car & Foundry Company, a West Virginia corporation. The appellee, the Ohio Valley

Bank, claims to be a creditor of the estate. The three will be severally designated as the trustee, the bankrupt, and the bank. The bankrupt had a life of a little less than 18 months. When it was formed, it took over the assets and assumed the liabilities of the previously existing Ohio Valley Mine Car & Manufacturing Company. At that time the bankrupt planned to acquire in addition all the capital stock of the Star Manufacturing Company, a corporation engaged in the same line of business at New Lexington, Ohio. The last mentioned will be herein referred to as the Ohio company. Its merger with the bankrupt did not become legally complete. The bankrupt, it is true, obtained upwards of 80 per cent. of the common as well as of the preferred stock of the Ohio concern, but it never secured all of either. Each of the companies, closely allied with the other as it was, maintained its separate existence to the end, and they were wound up in distinct proceedings by different courts of diverse jurisdictions. One Shirer was president of each, and they had several other officers and directors in

common.

The bank had been a creditor of the Ohio Mine Car & Manufacturing Company, whose debts the bankrupt assumed, and in consequence the bankrupt became its debtor. It claims to have made subsequent advances to the bankrupt, and it says at the time of the bankruptcy the bankrupt owed it upwards of $42,000, for which sum it filed its claim below, and to the allowance of which the trustee excepted.

Some of the exceptions at first interposed have since been abandoned, but the trustee still stands upon others. One of them alleges that the claim of the bank may not be allowed, unless and until it returns the sum of $2,611.58 which the trustee says it received from the bankrupt at a time and under circumstances which made it a voidable preference. It is sufficient to say that we agree with the referee and the court below in their holding that in this matter the trustee has not sustained the burden of proof the law imposes on him.

amount is itself the aggregate of three separate items, no part of any of which the trustee says the bank had any right to charge to the bankrupt. The three notes or trade acceptances making up the total of the Ohio company to the latter, and were nearly $5,000 were each given by debtors of

What

by it or by Shirer discounted at the bank, and by him placed to the credit of his personal account in the bank. The expert accountant, who made a careful examination of the books and accounts of the bankrupt, testified that no part of this money ever was received by the bankrupt, or was put to its use in any way. No attempt to contradict or explain this testimony has been made; nevertheless, when at maturity these obligations became in default, the bank charged them, not to Shirer, but to the bankrupt, because, as some of its officers testified, Shirer told them to do so. justification he had for giving any such instruction does not appear. When the testimony in this case was taken, he was alive and residing in Ohio, where it would have been easy for the bank to have proved by his deposition what right, if any, he had to tell the bank to charge what appeared to be his debt to the bankrupt, but it did not do so. It was for the bank to prove that he was authorized to give such direction, and no such proof is forthcoming. As the record stands, the bank has not shown that these items were properly charged to the bankrupt, and the learned court below erred in overruling the objection of the trustee to their allowance.

[2] The trustee furthermore claims that $7,300 paid by the bankrupt to the bank should be credited by the latter to the forSo far as the record discloses, the history of this payment may be briefly stat

mer.

On February 10, 1921, Shirer as president of the Ohio company and in its name issued to himself in his individual capacity its demand promissory note for $11,300. He discounted it at the bank and had its proceeds there placed to his personal credit. Eleven days later $4,000 on account of this note was paid the bank. The balance remained unpaid for some months, and the bank became anxious enough about it to ask more than once for its repayment, and to reach an understanding with Shirer that, when the latter got some money he could spare, he would take it up. The active head

2 F.(2d) 53

Fergu

of the bank at this time was one Ferguson. the surplus of the company as regards credHe was its vice president, one of its direc-itors exceeded $1,300,000. It said that the tors, and on its discount committee. The bank did not know what the company owed, president of the bank was a practicing phy- but in comparison with its assets it was a sician, who could not give a great deal of comparatively small amount. It looked uphis time to it. Ferguson was one of the on the bankrupt's paper as a perfectly safe original incorporators and directors of the risk, not only because of the property ownbankrupt. On May 19, 1921, he was elected by it, but because the management was ed treasurer of the bankrupt, and continued to hold that office until it went into bankruptcy. He claims, however, to have known comparatively little about its affairs. The by-laws gave him the custody of all the funds and securities of the bankrupt, conferred upon him, when necessary or proper, authority to indorse on behalf of the company checks, notes, and other obligations and deposit the same to the credit of the bankrupt, and he or the assistant treasurer, jointly with such other officer as might be designated by the executive committee, might sign checks, drafts, and notes on behalf of the bankrupt. By virtue of his office as treasurer, he was also assistant secretary of the company.

Some time, apparently towards the end of May, 1921, Ferguson, as vice president of the bank and in its name, gave Shirer a letter of introduction to some banking people in Chicago, and Shirer went to Chicago for the purpose, it appears, of opening a line of credit with some Chicago banking institution. In consequence of this visit to Chicago, on June 1, 1921, the assistant cashier of Greenbaum Sons Bank & Trust Company, of Chicago, hereinafter referred to as Greenbaum, wrote to the bank, asking in confidence for any information that the bank might have regarding the character, financial responsibility, and general standing of the bankrupt. On the 6th of June, Ferguson in the name of the bank wired Greenbaum that the bankrupt was worth from $800,000 to $1,000,000, that it owned two plants, that both were unincumbered, and it was a safe risk, and on the same day wrote a letter stating that the bankrupt was organized in 1920, combining the two companies already referred to, that a statement of the company prepared by an accountant as of January 1, 1921, showed preferred stock, $419,700, which had been increased since that time by a comparatively small amount, 45,000 shares of common stock were outstanding, having no par value, and that the statement of assets and liabilities of the bankrupt showed this stock to be worth $20 per share.

in the hands of experienced men.
son signed this letter as vice president of
the bank, but he did not say or indicate that
he had any connection with the company.
He testified he did not, because he assumed
that everybody knew it. Subsequent to the
receipt by Greenbaum of this telegram and
this letter, it agreed to lend the bankrupt
$80,000, $60,000 of which was at once
placed to its credit. The first check drawn
by the bankrupt on Greenbaum was for
$7,300 to pay the balance of the note which
had been discounted by the bank for Shirer
personally. With reference to this check,
Ferguson says that, when he found that
Shirer had returned from Chicago, he (Fer-
guson), stopped at Shirer's office and asked
the clerk to prepare a check, which was
done, and Shirer, as president, and Fergu-
son, as treasurer, signed it. Ferguson was
asked whether he regarded this note for
$7,300, for which the check was given, as a
liability of the bankrupt. His only reply
was: "We understood they were going to
pay it." It does not appear that either the
bank or Ferguson made any inquiry as to
why the bankrupt undertook to answer for
what was Shirer's obligation. As the rec-
ord stands, the bankrupt's money was ap-
plied by the bank to the payment of a debt
due by Shirer to it, and there is no evidence
that anybody connected with the bankrupt,
other than Shirer himself and Ferguson,
knew of or consented to this application of
its funds.

We think that the trustee rightfully insists that the bank must credit this $7,300 upon its claim against the bankrupt. In so holding we have not lost sight of the fact that in its brief the bank says that if Ferguson, to promote some private end of his own, conspired with Shirer to do an improper thing, the knowledge he acquired as such coconspirator could not be imputed to the bank. Sound as the proposition of law is, it has no relevancy to the facts disclosed by this record. There is nothing here shown to raise even a suspicion that Ferguson, in what he did in connection with this check, was seeking anything personal to himself. Obviously, if these statements were true, It is clear that in getting it he was acting

for the bank, and what he knew concerning it the bank must be held to have known; that is to say, when the bank received this $7,300 from the bankrupt, it knew that the check was in payment of the note which Shirer personally owed to it. It had no reason to believe that any officer of the bankrupt, except Shirer himself and Ferguson, who in this matter was acting for the bank, as he himself in fact testified, knew that its money was being used to pay its president's personal debts. If in point of fact the proceeds of this note had gone to the bankrupt, or if it had authorized the payment, the fact could have been shown but it was not. As the record stands, the bank must account to the trustee for the $7,300; that is to say, it must treat that sum as a credit on its claim against the bankrupt.

[3] Another of the trustee's exceptions goes to the entire claim of the bank. It al

From what has been said it follows that the exceptions of the trustee to $12,284.52 of the bankrupt's claim that is to say, to the two sums of $4,984.52 and $7,300, respectively-should have been sustained, and that there was no error in overruling his other exceptions. In short, the claim of the bank should have been allowed for $30,253.43, and not for $42,537.95. Modified.

MURBY v. UNITED STATES. (Circuit Court of Appeals, First Circuit. November 6, 1924.)

No. 1758.

1. Intoxicating liquors 249-Search warrant held not invalid, because not issued until 4 days after evidence was procured.

An affidavit that affiant purchased intoxicating liquor in a place conducted as a saloon 4 days previously held sufficient basis for issuance of a warrant to search the place for intoxicating liquor.

search warrant within 10 days held legal.

Execution of a search warrant to search

premises for intoxicating liquor within 10 days after issuance held legal.

3. Criminal law 1202 (3)-Evidence to prove charge of second offense held competent.

On the trial of defendant for unlawful possession of intoxicating liquor, charged as a secidentifying defendant as the person previously ond offense, testimony of the clerk of the court, convicted, held competent.

In Error to the District Court of the United States for the District of Rhode Island; Arthur L. Brown, Judge.

Criminal prosecution by the United States against Thomas Murby. Judgment of conviction, and defendant brings error. firmed.

Af

leges that the bank, for the purpose of get 2. Intoxicating liquors 249-Execution of ting undeserved credit for the bankrupt, knowingly made false statements as to the latter's financial condition, and that those to whom they were made acted upon them and suffered thereby. The trustee argues that in consequence the bank is not entitled to receive anything from the bankrupt estate until after its other creditors have been paid in full. To sustain this exception the trustee relies upon the telegram and the letter sent by the bank to Greenbaum, and as we understand the record upon them alone. If they made the bank liable to any one, as to which we intimate no opinion, it was to Greenbaum. If any one was deceived by them, it was Greenbaum, and it alone suffered from them. The money the bankrupt obtained from it went to swell the bankrupt's resources, and to a greater or less extent benefited the bankrupt's other creditors. As representing them, the trustee has not been hurt. Doubtless a case can be conceived in which a creditor of a debtor in failing circumstances may for its own purposes seek by knowingly false statements to obtain credit for the debtor from any or from all who may deal with the latter. Under such conditions it may be that the trustee, as representing the creditors generally, has the right to insist that, in the distribution of the bankrupt's estate, the improper action of the one creditor shall estop it from competing with its victims; but such rule of law, if it exists, has no application to the instant case. The learned court below was right in overruling this exception.

Max Winograd, of Providence, R. I. (James A. Lee, of Providence, R. I., on the brief), for plaintiff in error.

Harold A. Andrews, Sp. Asst. U. S. Atty., of Providence, R. I. (Norman S. Case, U. S. Atty., of Providence, R. I., on the brief), for the United States.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

BINGHAM, Circuit Judge. The defendant (plaintiff in error) was indicted on the 28th day of May, 1923, for unlawfully possessing certain intoxicating liquors containing one-half of 1 per cent. or more of alcohol by volume, second offense. He was found guilty and sentenced to pay a fine of $500, from which sentence this writ of error is prosecuted.

2 F.(2d) 56

Prior to the trial he moved that the search warrant on which liquors were seized be quashed and the evidence obtained thereunder suppressed, assigning the same grounds therefor, with the exception of the seventh, as were assigned and considered by this court in Gandreau v. United States, 300 F. 21, as to which the decision was against the defendant's contention.

the court erred in refusing to strike out the testimony of Alice Peckham, clerk of the court, who was called as a witness by the government to identify the defendant as the person against whom a prior conviction had been had for the same offense. In giving her testimony she identified the defendant as such party, and stated that she had seen him in court at least six times before, and,

The seventh ground of the motion reads without objection, testified that on March as follows:

"That because an unreasonable length of time elapsed between the alleged violation constituting probable cause and the date of the search warrant, and the date of the search and seizure; the alleged violation being on the 23d day of October, 1922, and the date of the search warrant October 27, 1922, and the date of the search and seizure on October 31, 1922."

This branch of the motion presents two questions: (1) Whether on the facts presented in the affidavit the commissioner could find probable cause for issuing the warrant; and (2) whether the search and seizure was delayed an unreasonable length of time after the warrant issued.

[1] In the affidavit the applicant for the warrant stated that he had made a personal visit to the defendant's saloon on the ground floor of dwelling numbered 386 Mineral Spring avenue in the city of Pawtucket on October 23, 1922, when he purchased a drink of beer which contained more than one-half of 1 per cent. of alcohol for beverage purposes. And it appears that 4 days later (October 27) he applied to the commissioner for and obtained the warrant. As the affidavit discloses that the place where he purchased the liquor was a saloon, we think the commissioner could reasonably infer therefrom that the same line of business was being conducted there 4 days later, when the application for the warrant was made.

[2] We are also of the opinion that the warrant was seasonably served. Section 11 of the Espionage Act (40 Stat. 229 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 104964k]) limits the time to 10 days within which a search warrant must be executed and returned to the judge or commissioner who issued it, and, as this warrant was executed and returned within less than 10 days after its date, it was seasonably executed.

[3] The defendant also complains that

27, 1922, he had pleaded nolo to a criminal information charging him with the unlawful possession of intoxicating liquors, and paid a fine of $100.

As the defendant was being tried for a second offense it was incumbent upon the government to identify him as the person who had been previously convicted of a like offense. This it did through the witness Alice Peckham, who stated that she had seen him in court six times before. It was competent for her to state that she knew the man, and to give her reasons therefor.

At the conclusion of the government's evidence, and of all the evidence, the defend-. ant moved to dismiss the indictment on the ground that the government had not proved that the liquids seized contained at the time of the seizure one-half of 1 per cent. or more of alcohol by volume.

It appeared that certain liquids which were seized at the time the search was made were preserved as Exhibits Nos. 3, 4, and 5; that No. 3 was a quart bottle containing liquids that were taken from a tap in the saloon, and were poisoned, sealed, and labeled by the officers at the time, and that exhibits 4 and 5 were two pint bottles full of liquids taken from a case of bottles in the saloon, having upon them the original caps. The government's chemist testified that an analysis showed that the liquids of these exhibits contained over one-half of 1 per cent. of alcohol by volume; that there would be no fermentation after poisoning, and that fermentation would only be increased by exposure of the liquids to the air, and that it would not increase if the bottles containing the liquids were sealed. In view of this evidence the jury might reasonably have found that some or all of the liquids seized contained one-half of 1 per cent. or more of alcohol by volume.

The judgment of the District Court is affirmed.

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1. Bankruptcy 485-Trustee's demand on bankrupt not essential element of crime of concealment of assets.

Trustee's demand on bankrupt held not essential element of offense of fraudulent concealment from trustee of assets, under Bankruptcy Act, § 29b (Comp. St. § 9613); concealment constituting crime, regardless of whether preceded by demand.

2. Bankruptcy 494-Variance between allegation as to demand for assets by trustee and proof showing demand as receiver held not fatal, in prosecution for concealment of assets.

In prosecution of bankrupts for concealment of assets from trustee, under Bankruptcy Act, $29b (Comp. St. § 9613), variance between allegation of demand on bankrupts by trustee after his appointment as such, and proof of demand while receiver, prior to appointment as trustee, held not fatal, under Comp. St. Ann. Supp. 1919, § 1246.

3. Bankruptcy485-Use of concealed assets for benefit of preferred creditor does not purge act of criminality.

That bankrupt, concealing property belong .ing to estate from trustee, uses concealed property wholly or partly for benefit of preferred creditor or some one else, does not purge act

of criminality.

In Error to the District Court of the United States for the Southern District of Georgia; William H. Barrett, Judge.

Louis Kalin and Louis Stein were convicted of fraudulently concealing assets from their trustee in bankruptcy, and they bring error. Affirmed.

L. W. Branch and Russell Snow, both of Quitman, Ga. (R. G. Dickerson, Jr., of Valdosta, Ga., and Branch & Snow, of Quitman, Ga., on the brief), for plaintiffs in error. B. S. Deaver, Asst. U. S. Atty., of Macon, Ga.

make demand upon the accused for all property belonging to said estate in bankruptcy. There was evidence tending to prove that H. C. Morgan, after he was appointed receiver of said estate, but prior to his appointment as trustee thereof, made such a demand as was alleged. The allegation as to the making of a demand was surplusage, as the concealment alleged constituted the offense denounced by the statute, whether it was or was not preceded by the making of a deWe are not of mand upon the accused. opinion that the allegation as to the making of a demand properly can be regarded as descriptive of the concealment charged. Averments of the count are to the effect that the concealment charged followed the making of the demand alleged.

Furthermore, the variance between the allegation of a demand by H. C. Morgan, as trustee of the estate in bankruptcy, and the proof that such demand was made by the same person as receiver of the same estate in bankruptcy, cannot well be regarded as a material one, especially where both the allegation and the proof were in regard to an immaterial matter. Under the circumstances disclosed, the accused could not have been misled by the allegation as to the making of a demand upon them prior to their alleged criminal misconduct, and none of their substantial rights could have been affected by the action of the court in submitting to the guilt of the accused of the offense charged, jury evidence which tended to prove the but which did not include proof supporting an allegation of the immaterial fact of the

making of a demand on the accused prior to their commission of such offense. If the ruling in question involved error, the error was not one warranting a reversal of the judgment, as it did not affect the substan

Before WALKER, BRYAN and KING, tial rights of the parties. 40 Stat. 1181 Circuit Judges.

WALKER, Circuit Judge. [1, 2] The plaintiffs in error were convicted under a count of the indictment charging that they did, while bankrupts, unlawfully, willfully, knowingly, and fraudulently conceal from H. C. Morgan, their trustee in bankruptcy, a stated sum of money belonging to their estate in bankruptcy. Bankruptcy Act, 8 29b (Comp. St. § 9613). The refusal of the court to direct a verdict of not guilty is complained of on the ground that there was an absence of evidence to sustain an averment of the count that H. C. Morgan, as trustee of said estate in bankruptcy, did

(Comp. St. Ann. Supp. 1919, § 1246).

[3] The following part of the court's charge to the jury is assigned as error: "Now, I charge you that, in order to constitute a fraudulent concealment, it is not necessary that the money should be retained for their own use for any indefinite or definite time, but if they knowingly and if they fraudulently kept away from their trustee in bankruptcy any of their assets and used it for the purpose of their own benefit or for the purpose of benefiting some other person, not merely paying a creditor as against another in anticipation of bankruptcy, but if they fraudulently concealed from the trustee in bankruptcy the fact of having

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