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IN RE GOPHRENER

October 4, 1937

In re GOPHRENER


The opinion of the court was delivered by: BYERS

BYERS, District Judge.

Motion to confirm report of referee recommending denial of discharge, and for an order directing the bankrupt's attorney to pay to the attorneys for the objecting creditor all monies received from the bankrupt pursuant to order of this court dated April 1, 1936.

The specifications of objection are four in number and questions arising under the first present the only important matters for consideration.

 That specification alleged that the bankrupt had committed an offense punishable by imprisonment according to section 29b of the Act, as amended by Act May 27, 1926, 11 U.S.C.A. § 52(b), in that between June 1, 1926, and April 5, 1928, he had conspired with others to conceal from, and did conceal from, the trustee in bankruptcy of another bankrupt certain property belonging to that bankrupt estate which was being administered in the Southern District of New York; and that during the month of April, 1928, this bankrupt with others was convicted of such offenses, in a criminal trial held in that Court, and this defendant was sentenced to serve two years in a Federal penitentiary in punishment thereof.

 On the argument of this motion, the bankrupt's attorney took the position that the fact of concealment and conspiracy had not been shown. The proof relied on before the referee consisted of certified copies of the records of the Southern District Court, namely: a certified copy of the order of the Court, dated April 30, 1928, containing the sentence; a certified list of docket entries in the action entitled the United States v. Biltmore Watch Case Company, Inc., a corporation, Abraham Bloom, Samuel Gophrener, and certified copy of the indictment.

 There being no question as to the identity of this bankrupt as one of the defendants in that case, he sought unsuccessfully to testify before the referee on this application, that he was not guilty of the concealment and conspiracy in question; it was argued on his behalf before the Court that he should have been permitted to do so.

 It may be conceded that the specification alleges facts, namely, the concealment and conviction of it, while the evidence in substantiation consists in proof of the indictment and conviction, rather than in proof of the conspiracy and concealment themselves, but it is not presently perceived that this is an important distinction.

 The language of the Supreme Court in the case of Southern Pacific R. Co. v. U.S., 168 U.S. 1, 18 S. Ct. 18, 27, 42 L. Ed. 355, seems to vindicate the ruling of the referee:

 "The general principle announced in numerous cases is that a right, question, or fact distinctly put in issue and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and, even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified."

 So long as the judgment of conviction remained unreversed, it established the facts of concealment and conspiracy, so far as the defendant Gophrener is concerned. He certainly was a party to that cause, and he is the only party seeking discharge in this proceeding.

 A contrary view would require the referee to conduct a new hearing of issues which were once determined beyond a reasonable doubt in the criminal cause. Plainly no such requirement is suggested by reason, and the bankrupt has not cited authority to sustain so tenuous an argument.

 The language used by Hough, J., in Re Seavey (D.C.) 195 F. 825, while it had to do with a civil litigation touching an assignment in fraud of creditors which had been determined in a State Court, is thought to be equally applicable to the situation here presented.

 This bankrupt is not entitled to a discharge which is a matter of favor, under the showing made by the opposing creditor. The fact that the concealment occurred in another bankruptcy proceeding does not ...


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