rupt. The fraudulent bankrupt gains nothing by being adjudged a bankrupt, but is punished criminally and denied a discharge. And his creditors lose none of their rights, for they may resort to all the remedies known to the law for the collection of their debts against the bankrupt, the same as though he had never been adjudged a bankrupt. There is therefore no occasion for the exercise by the court of bankruptcy of any doubtful power or jurisdiction, either for the purpose of punishing the bankrupt or protecting his creditors. If the court has reason to believe that the bankrupt has fraudulently concealed any property belonging to his estate in bankruptcy, or made a false oath in the proceedings in bankruptcy, it should require him to enter into recognizance to answer to any indictment the grand jury may present against him for these offenses. It is extremely plain the act contemplates that a fraudulent concealment of assets and false oaths by the bankrupt are to be punished as crimes in the mode provided by the act, which secures to the accused the right of trial by jury, and not as contempts of court. The failure of the bankrupt to pay through inability lacks the essential element of contempt. Inability to comply with the command of the court is always a complete defense to a charge of contempt. It cannot be imputed to any one that he is guilty of a contempt of court for neglecting or refusing to do what it appears is out of his power to do. An order of commitment in such case is void. Rap. Contempt, § 115, and cases cited. The ability of a bankrupt to comply with the order of the court must be made to appear, before he can be punished for contempt. And it must be made to appear by evidence which leaves no reasonable doubt in the mind of the court on that subject. Evidence which is merely persuasive will not suffice. He cannot be imprisoned for the purpose of exploitation. Torture as a means of extracting evidence or forcing a confession is no longer allowable either in civil or criminal proceedings. When imprisonment for debt was lawful, a creditor frequently imprisoned his debtor in the hope and expectation that his friends or relations would pay the money required to release him from an imprisonment which otherwise would apparently end only with his life. But no such practice is permissible under the bankrupt act. In the printed record before us, which is all we have to consider, there is no direct evidence to show that the bankrupt has the money, save two or three small items mentioned in the referee's order. The referee's conclusion seems to have been reached mainly, if not altogether, by "approximate" estimates, inferences, and conjectures, which, while they give rise to very strong suspicion, fall far short of direct and conclusive proofs. The sea of suspicion has no shore, and the court that embarks upon it is without rudder or compass. No man can be imprisoned for a constructive contempt on suspicion or conjectures, or upon inferences which may or may not be well founded. For this reason from the earliest times the doctrine has obtained that when one accused of a constructive contempt in a court of law denies positively and specifically the alleged contempt, under oath, the proceeding against him for contempt must be dismissed. In Rex v. Sims, 12 Mod. 511,-one of the earliest cases to be found in the books on the subject, this is the opinion: "Per Curiam. If one brought in, in contempt, deny all upon oath, he is, of course, discharged of the contempt; but, if he has forsworn himself, he may be prosecuted for perjury." Mr. Blackstone says: "If the party can clear himself upon oath, he is discharged, but, if perjured, may be prosecuted for the perjury." 4 Bl. Comm. 288. The doctrine thus laid down is still the rule followed by courts of common law; those courts uniformly holding that, if one accused of a constructive contempt fully answers all the charges on his oath, he must be discharged; the answer must, for the purposes of the contempt proceedings, be taken as true, and extrinsic evidence cannot be received to impeach it. And this is the doctrine in the federal courts. In the case of U. S. v. Dodge, 2 Gall. 313, Fed. Cas. No. 14,975, the court (Mr. Justice Story and District Judge Davis) said: "We cannot receive any collateral evidence as to the offense, but if the respondent, by his affidavit and answer on oath to interrogatories proposed by the district attorney, discharges himself of the contempt, no other proceedings can be had against him on the attachment. If from any collateral evidence it should appear that there is reason to believe the respondent has perjured himself, we will recognize him to answer at the next term of court to such matters as may be found against him." This case is cited approvingly by that eminent jurist, Judge Curtis, in Re Pitman, 1 Curt. 186, Fed. Cas. No. 11,184. In Burke v. State, 47 Ind. 528, the court, after a somewhat extended review of the authorities, say: "It is settled by the entire current and whole weight of authority that in cases of criminal constructive contempt the party should be discharged when he has purged himself of the contempt under oath, and the opinion in the above case [a case previously decided by that court] should be in that respect modified. This modification was prepared by, and meets the approval of, the writer of the opinion in the above case, who has become satisfied from an examination of the authorities that he was led into error by supposing that the rule in chancery was applicable to cases of criminal contempt." And see, to the same effect, Buck v. Buck, 60 Ill. 105; State v. Earl, 41 Ind. 464; Haskett v. State, 51 Ind. 176; Rap. Contempt, § 119. In the view we take of this case, it is not necessary for the court now to decide whether the doctrine of the cases we have cited is applicable to proceedings for contempt against a bankrupt for failing to comply with an order to pay to the trustee money supposed to be in his possession or within his control, for the reason, as we have pointed out, that the question as to whether the bankrupt had in his possession or under his control the items of money mentioned in the referee's order was not raised in a manner and at a time that gave to the bankrupt an opportunity of responding under oath to these specific claims. Most, if not all, of the testimony upon which the referee based his order was taken at a time when the bankrupt did not understand that it was elicited for the purpose of making an order upon him to turn over moneys alleged to be in his possession. Upon the whole, we think the ends of justice will probably be promoted by reversing both the order of the bankrupt court and of the referee, and remanding the case to the court of bankruptcy, with directions to permit the trustee, if he shall be so advised, to file a petition particularly specifying the sum or sums of money and property which he claims the bankrupt wrongfully withholds from him, and that reasonable notice be given to the bankrupt of the hearing on the petition, and that the bankrupt be permitted to answer the same under oath, and to submit to a further examination under oath if the court shall so direct, and that both parties have leave to introduce such further testimony as they may be advised. SANBORN, Circuit Judge. I concur in the order reversing the orders below because the evidence in the record satisfies my mind, beyond a reasonable doubt, that the bankrupt had in his possession or under his control at the time the order of the referee was made a much larger amount of property that belonged to his estate in bankruptcy than the amount which the court finally ordered him to surrender to the trustee. The rule by which this issue is to be determined is that the property of the bankrupt estate traced to the recent possession or control of the bankrupt is presumed to remain there until he satisfactorily accounts to the court for its disposition or disappearance. He cannot escape an order for its surrender by simply adding perjury to fraudulent concealment or misappropriation. It is still the duty of the referee and of the court, notwithstanding his oath and his testimony, if satisfied beyond a reasonable doubt that he has property of the estate in his possession or under his control, to order him to surrender it to the trustee, and to enforce that order by confinement as for contempt. These rules are established and illustrated by the following cases: In re Salkey, 21 Fed. Cas. 235, 238-240, Nos. 12,253 and 12,254; In re Schlesinger, 42 C. C. A. 207, 208, 102 Fed. 117; Id. (D. C.) 97 Fed. 930, 932; In re Deuell (D. C.) 100 Fed. 633, 634; In re Greenberg (D. C.) 106 Fed. 496; In re McCormick (D. C.) 97 Fed. 566, 567; In re Mayer (D. C.) 98 Fed. 839, 841. The foregoing authorities and those cited below also sustain the proposition that the rule that one charged with constructive contempt. may conclusively purge himself thereof by his own oath, which may prevail in cases at law in Indiana and in some other jurisdictions, has no application to cases involving a disobedience of an order of a court to pay money or surrender property, or to cases involving the disobedience of an order of a court of bankruptcy or of equity, or, in many of the code states, to cases involving the disobedience of an order of a state court. In all proceedings for contempt for the disobedience of orders in bankruptcy and in chancery, and in most of the code states in all cases of proceedings for contempt for disobedience of an order of a court, the sworn answers of the party charged with the contempt are evidence to purge him thereof, but they are not conclusive evidence. They may be contradicted and supported by other testimony, and the question whether or not the party charged has purged himself of the contempt is always to be decided upon a careful consideration of all the evidence produced for and against him. Moreover, an attachment for the disobedience of an order to pay money or to surrender property is considered rather as a civil execution for the benefit of the equitable owners of the fund or property than as a criminal proceeding, although it is in the form of a criminal process for a contempt of the authority of the court. Buck v. Buck, 60 Ill. 105, 106; Smith v. Smith, 14 Abb. Prac. 130, 132; 4 Bl. Comm. p. 288; Crook v. People, 16 Ill. 534, 537; In re Pitman, 19 Fed. Cas. pp. 727-729, No. 11,184; Rap. Contempt, § 120; Underwood's Case, 2 Humph. 46, 49; Rutherford v. Metcalf, 5 Hayw. 58, 60, 61; Magennis v. Parkhurst, 4 N. J. Eq. 433, 434; State v. Harper's Ferry Bridge Co., 16 W. Va. 864, 873; State v. Matthews, 37 N. H. 450, 455, 456; Henry v. Ellis, 49 Iowa, 205, 206; Crow v. State, 24 Tex. 12, 14. (116 Fed. 143.) BEACH et al. v. MACON GROCERY CO. et al. No. 1,135. 1. BANKRUPTCY-APPOINTMENT OF RECEIVER-ORDER TO SELL PROPERTY IN POSSESSION OF ADVERSE CLAIMANT. It is error for a court of bankruptcy to appoint a receiver to take possession of property, and to make a summary order for the sale of such property, without the consent of the adverse claimant, who is in actual possession of such property claiming it as owner. 2. SAME-APPOINTMENT OF RECEIVER-NECESSITY OF Bond. A court of bankruptcy is authorized to appoint a receiver to take possession of the property of one against whom a petition in involuntary bankruptcy has been filed and is pending only upon the giving of a bond by the petitioners therefor, as required by Bankr. Act, § 3e. 3. SAME-ADVERSE CLAIMANT OF PROPERTY-ANCILLARY PROCEEDING FOR INJUNCTION. On the filing of an ancillary bill in equity by creditors who have filed an involuntary petition in bankruptcy against their debtor, alleging that a third person claims possession and ownership of property which is in fact a part of the bankrupt's estate, and on proper notice, the court has power to issue an injunction restraining such person from selling or incumbering the property pending the hearing on the petition, and, in case an adjudication is made, until the trustee can proceed adversely against the claimant to determine the title to the property. In Bankruptcy. Petition to superintend and revise the action of the district court. Creditors filed a petition in involuntary bankruptcy against Asa N. Beach, and on the same day filed an ancillary bill in the district court, praying the appointment of a receiver to take charge of all of the property of the alleged bankrupt, including certain property described in the bill. The bill alleged that Julia M. Dixon claimed to be the owner and in possession of such property, but that such claim was fraudulent and unfounded, the property being in fact owned by the bankrupt and in his possession. An ex parte order was made appointing a receiver as prayed. Subsequently Beach answered the petition, denying the petition, denying the alleged acts of bankruptcy, and also answered to the bill during its allegation, and filed a motion for the discharge of the receiver. Miss Dixon also filed an answer to the bill denying its allegations with respect to the property claimed by her, and alleging that she was the owner and in possession of such property when the bill was filed, and that it was taken from her possession by the receiver. She also filed a motion for the discharge of the receiver so far as related to her property, which motion was denied, as was also that of Beach. On application of the receiver, and against the objections of Miss Dixon, he was 13. See Bankruptcy, vol. 6, Cent. Dig. §§ 156, 158. ordered to sell certain of the property, which he did, and the sale was confirmed. Beach and Miss Dixon joined in a petition to superintend and revise such proceedings. No bond was given by the petitioning creditors prior to the appointment of the receiver, but after the filing of the petition in the circuit court of appeals an order was made by the district court on their application permitting them to file such bond nunc pro tunc. John P. Ross, for petitioners. John I. Hall and Olin J. Wimberly, for respondents. Before PARDEE, McCORMICK, and SHELBY, Circuit Judges. PER CURIAM. After carefully considering the entire record in this case and the argument of counsel, we have reached the following conclusions: I. The order made appointing a receiver of the property shown by the ancillary bill to be held and claimed adversely by Julia M. Dixon should be reversed, and the receiver, Fred. R. Martin, directed to surrender to her all of said property, and all property taken from her possession by authority of said order. 2. The order, made without bond, so far as it appoints a receiver of the property held and claimed by the bankrupt, Asa N. Beach, individually or as a member of a firm, should be reversed, and all of said property held by the receiver should be surrendered by the receiver to said Beach. 3. The order directing a sale of parts of said property should be reversed. Where parts of said property claimed by Julia M. Dixon have been sold by the receiver, and purchased and paid for in cash by her, the receiver should be directed to return the money so paid to her, and she allowed to retain possession of the property as original claimant in adverse possession, and not as purchaser at the sale. 4. The sixty-ninth section of the bankrupt law provides a mode of protecting the alleged bankrupt's estate pending the adjudication of an involuntary bankrupt, and, upon a compliance with the provisions of that section, the bankruptcy court can deal with the property of said Asa N. Beach through seizure by the marshal; or, under the court's general equity powers, the court can otherwise protect the property by the appointment of a receiver, or through an injunction. 5. On the facts alleged in the ancillary bill, an order on motion and notice may be made by the bankruptcy court restraining and enjoining Julia M. Dixon from disposing of or removing or incumbering any of the property described in the ancillary bill until the trial of the issue joined on the petition in involuntary bankruptcy against Asa N. Beach, and, if said Asa N. Beach be adjudged a bankrupt, then until a trustee can be appointed and authorized to proceed adversely against the said Julia M. Dixon to recover all property of Asa N. Beach alleged to be fraudulently held by her. 6. The respondents herein, the Macon Grocery Company, Inman, Smith & Co., and J. Reginstein are taxed with the costs in this court, and with the costs of the proceedings on ancillary bill to appoint a receiver, and with the costs of the receivership, including the com |